DStv owner ready for a comeback

MultiChoice chief financial officer Tim Jacobs believes that volatile external economic factors that negatively impacted the entertainment giant’s business in the past two years are stabilising.

In an interview with MyBroadband about the company’s 2025 financial year results, Jacobs explained the DStv owner had to contend with various issues in some of its key markets.

These included high interest rates and surging inflation, frequent and severe power cuts, and fuel shortages.

In South Africa, the main problem was a highly indebted middle class. In Nigeria, the power grid failed 12 times in the year, interest rates were around 25%, and inflation at roughly 35%.

In addition, the Nigerian government is removing fuel subsidy levies, which Jacobs explained had a particularly heavy impact on discretionary spending.

Another large DStv market — Zambia — has frequently experienced power cuts of more than 20 hours per day over the past year.

“We’ve lost another 38% of the Zambia customer base, over and above the big loss that we had last year,” Jacobs explained.

In addition to these issues, foreign exchange instability in many of MultiChoice’s markets — including Nigeria — also resulted in a R3-billion loss during the year.

However, Jacobs said MultiChoice believed there was good news on the horizon as there were early signs that the next year could be a period of stability.

“For example, the Naira has been really consistent for the last six months and has been moving in a band of 20 cents,” Jacobs said.

Jacobs said if Nigerians’ income streams started to align with the higher inflation levels, people would recalibrate and again be able to splurge more on discretionary spending.

“We are not saying that the weakness is gone, but we are starting to see some level of stability that we probably haven’t seen in two years,” Jacobs said.

“If we look at our overall subscriber numbers in the Rest of Africa (RoA), we were on 7.5 million subscribers at the half-year, down 7%, and we kept them up to the end of the year,”

Positive swing despite challenges

One of the ways that MultiChoice has started dealing with volatile currencies in Africa is by using a dual-hedging strategy.

“We are utilising the opportunities as the currency moves. When the rand strengthens, we hedge our South Africa cost exposures,” Jacobs explained.

“When the rand weakens, we have started to hedge the RoA payments to the group in rand,” Jacobs said.

Despite a decline in revenue and trading profit, MultiChoice managed to swing from a R2.52-billion loss in 2024 to a R2.02-billion profit in 2025.

This was primarily attributed to the company’s sale of a majority stake in the NMSIS Insurance business to Sanlam, which netted MultiChoice R1.2 billion in after-tax proceeds.

This decision is noteworthy as MultiChoice’s prospective new owner, Canal+, has expressed its intention to refocus the company on its core entertainment offerings.

The broadcaster also undertook a substantial cost-cutting exercise. “We were able to deliver R3.7 billion of recurring savings by the end of the last year,” Jacobs told MyBroadband.

When excluding the impact of MultiChoice’s Showmax investment and forex losses, Jacobs said that organic improvement in revenue was around 20%.

MultiChoice also exited technical insolvency after reducing its lease liabilities, long-term loans, and tax liabilities.