Good and bad for DStv owner MultiChoice

MultiChoice has released an interim trading statement for the six months ended 30 September 2024, which revealed a mixed bag of results.

MultiChoice said its financial performance has been negatively impacted by severe pressure in the macroeconomic, foreign exchange rate and consumer environment in key markets.

To offset weaker subscriber activity and foreign exchange pressures, it is pursuing an inflationary pricing strategy and targeting R2.0 billion in cost savings.

“The group has made strong progress against these objectives on a year-to-date basis,” MultiChoice said in its trading update.

Organic trading profit is expected to be flat, while organic trading profit excluding Showmax is expected to increase between 30% and 35%.

MultiChoice’s loss per share is expected to increase between 34% and 38%, and headline loss per share by between 44% and 48%.

Adjusted core headline earnings per share are expected to decrease by between 97% and 101% for the reporting period.

It informed shareholders that its board considers trading profit and adjusted core headline earnings per share to be two appropriate indicators of the operating performance.

MultiChoice favours these indicators because they adjust for non-recurring and non-operational items.

Adjusted core headline earnings include the impact of losses incurred on cash remittances from the Rest of African markets, net of tax and non-controlling interest.

“Organic trading profit and adjusted core headline earnings per share are considered to be non-IFRS measures,” MultiChoice said.

Organic trading profit is calculated by excluding foreign currency movements and changes in the group’s composition.

Adjusted core headline earnings are calculated by adjusting headline earnings for the following items, net of tax and non-controlling interests.

• Amortisation of intangible assets arising from business combinations;
• Accounting adjustments related to IFRS 3: Business Combinations;
• Equity-settled share-based payment compensation;
• Unrealised and non-recurring foreign currency gains/losses;
• Certain fair-value adjustments under IFRS;
• Nonrecurring current and deferred taxation impacts;
• Non-recurring empowerment transactions;
• Acquisition-related costs and once-off contractual settlements;
• Non-recurring, non-routine impairments of certain assets; and
• Losses on cash remittances, mainly in Nigeria, net of tax and the non-controlling interest.

The table below summarises the group’s estimated changes in loss and headline loss per share, trading profit, and adjusted core headline earnings per share.

It further compares the six months ended 30 September 2024 with the six months ended 30 September 2023.