MultiChoice upbeat about future prospects

MultiChoice CEO Calvo Mawela said they are making good progress to strengthen their balance sheet and make Showmax profitable.

Mawela’s comments came after MultiChoice released its consolidated interim financial statements for the period ending 30 September 2024.

The group experienced a challenging six months, with declining revenue, lower operating profit, and a larger loss.

Subscribers declined from 16.7 million to 14.9 million over the last year, including a 5% reduction in South Africa and a 15% decline in the Rest of Africa.

MultiChoice explained that unprecedented foreign exchange volatility severely impacted its interim financial results.

It added that ongoing macroeconomic challenges weighed on customer growth and moderated overall performance.

Despite these challenges, MultiChoice remains upbeat about its prospects, saying it maintained strategic momentum despite the macroeconomic challenges.

The company said it has created a solid financial foundation, with targeted investments and disciplined cost management to drive future growth.

MultiChoice said cost-cutting measures delivered R1.3 billion in permanent savings and is on track to reach the full-year target of R2.5 billion.

Showmax’s customer base, which is seen as the company’s future, grew 50% year-on-year. This is set to accelerate with a big drive in this segment.

This year, Showmax is focused on enhancing its content lineup, bedding down distribution partnerships, expanding payment channel integrations, and refining its go-to-market strategy.

MultiChoice’s subsidiary Irdeto, the world leader in digital platform cybersecurity, has also performed well.

It delivered encouraging revenue growth after securing a major customer in Asia and expanding managed services with a key customer in Australasia.

MultiChoice’s fintech division, Moment, is now live in 40 African countries and has shown rapid growth since its launch last year. Total payment volumes grew to R4.4 billion.

Other business units, including DStv Steam, DStv Internet, DStv Insurance, and KingMakers, have also shown strong revenue growth.

Another positive development is that MultiChoice is on track to strengthen its balance sheet and resolve its negative equity position this month.

MultiChoice CEO’s comments

MultiChoice CEO Calvo Mawela said they are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year.

“We expect to return to a positive net equity position by the end of November this year, supported by several developments and initiatives,” he said.

“The group’s liquidity position remains strong, with over R10 billion in total available funds.”

He added that MultiChoice is adjusting well to global pay-TV challenges as streaming services, social media, and changing consumer preferences impact the traditional broadcast business.

Showmax, which reported strong subscriber growth in its paying customer base, strategically positions the business to actively participate in the streaming revolution.

“To create sufficient capacity and drive growth, the group stepped up its investment in this business by an incremental R1.6 billion during the interim period,” he said.

He added that they have successfully implemented their strategy over the past few years, including:

• The investment in sports betting platform KingMakers.
• Returning the Rest of African business to profitability in the 2023 and 2024 financial years.
• Concluding the Showmax partnership with Comcast and launching Showmax 2.0.
• Investing in the fintech platform Moment.

“Our focus extends beyond cost efficiency. We are equally committed to grow the business,” Mawela said.

“We remain committed to driving new revenue streams and see significant medium to long-term opportunities in video entertainment and in our adjacent new businesses.”