DStv owner MultiChoice has informed shareholders that it expects to report a trading profit growth of between 0% and 3% for the year ended 31 March 2022 — around R300 million.
Last year, MultiChoice gave shareholders much better news at results-time, promising a trading profit increase of between 25% (R2.0 billion) and 30% (R2.4 billion).
MultiChoice attributed the low growth to unrealised foreign exchange gains and an increase in foreign exchange losses.
The unrealised foreign exchange gains stem from the translation of transponder lease liabilities as the rand weakened against the US dollar.
Its foreign exchange losses were associated with the repatriation of cash from Nigeria.
“The financial performance for FY22 benefited from sustained subscriber growth, the recovery in advertising revenue and a continued focus on cost control across the business,” MultiChoice said in an announcement on the JSE’s news service.
“This was negated by the increase in content costs,” the company said.
MultiChoice said its content costs were driven primarily by the R1.1-billion deferral in costs from the previous financial year as the sporting calendar normalised.
Local production activity also accelerated as Covid–19 restrictions eased.
“The board considers trading profit and core headline earnings per share as the two most appropriate indicators of the operating performance of the group, as they adjust for non-recurring and non-operational items,” MultiChoice stated.
It expects core headline earnings per share to be between 5% (R0.38) and 8% (R0.61) higher than last year’s R7.67.
MultiChoice’s share price dropped by over 3% following the news. It started the day at R132.50 per share and was trading at R128 at the time of publication.