MultiChoice has reported an after-tax loss of R911 million for the six months between 1 April and 30 September 2023.
This is a significant swing from the R55 million after-tax profit it posted over the same period last year.
It also reported a 1% decline in revenue from R28.7 billion to R28.3 billion, while operating profit declined 22% from R6.2 billion to R4.8 billion.
MultiChoice’s free cash flow stood at R1.07 billion — down 40% from R1.8 billion last year.
Looking at its 90-day active subscribers, MultiChoice reported a 70,000 increase in DStv subscribers in its Rest-of-Africa segment.
However, in South Africa, it lost 486,000 subscribers. This resulted in a net loss across the group of 416,000 90-day active subscribers.
It is the first time DStv’s overall subscriber numbers have declined according to this metric.
MultiChoice South Africa’s external revenue decreased by 3% from R17.05 billion to R16.54 billion, with trading profit decreasing over 17% from R6.3 billion to R5.2 billion.
Showmax’s external revenue increased 46% from R381 million to R555 million.
However, its trading losses also increased from R279 million to R799 million.
MultiChoice blamed power interruptions, cost of living pressures, and sharp depreciation in local currencies against the US dollar for the decline in profitability.
“The impact was mitigated by a change in focus towards subscriber retention, an improved customer mix, as well as ongoing annual pricing and cost-saving disciplines,” the company stated.
“As a result, the group was able to maintain a positive trading profit in the Rest of Africa (a ZAR2.2bn organic improvement YoY) and delivered a 31% trading margin in South Africa.”
It also said it came off a high-growth period linked to the FIFA World Cup in the previous six months.
The Rugby World Cup kicked off towards the end of the reporting period, at the beginning of September.
“The South African business had to contend with the effects of ongoing high levels of load-shedding as 43% of the days in the reporting period were impacted by stage 4–6 load-shedding,” MultiChoice stated.
“Subscriber growth was also affected by a decision to remove 311k non-revenue generating customers (linked to special load-shedding campaigns) from the base.”
MultiChoice reported that its premium customer base posted an encouraging 5% growth, reflecting a positive trend for the first time in many years.
“Total content costs were up 4% in organic terms (+10% reported), driven by the ongoing investment in local content, which increased 16% YoY,” it stated.
MultiChoice highlighted Shaka iLembe as a notable local content investment. The show began airing in June.
It also invested in several World Cups hosted in the first half of the year, such as the Netball, Women’s football, and half of the Rugby World Cup tournament.
“These increases were managed through ongoing optimisation of the international content portfolio,” MultiChoice said.
“In the current environment of heightened operational risk caused by volatile currencies and consumer pressure, and considering the medium-term investment cycle for Showmax, the group remains focused on cash generation and protecting the balance sheet.”