MultiChoice results in a nutshell

MultiChoice has released its half-year results for the period ended 30 September 2024, which indicate that revenue and trading profit for its South African operations have levelled off and recorded a slight increase.

The DStv owner reported revenue of R16.8 billion in South Africa for the six months between April and September, up just over 1% from R16.5 billion during the same period last year.

Trading profit for South Africa was flat at R5.2 billion.

The average Revenue Per User (ARPU) in South Africa improved by over 3% from R280 to R289.

MultiChoice said several factors had improved sentiment and conditions in its core South African market.

These include six months of no load-shedding, inflation declining by 90 basis points year-to-date, an initial 25 basis point rate cut by the Reserve Bank in September, a stronger rand, and optimistic expectations around the South African Government of National Unity.

“Against this backdrop, the mature South African business remains focused on driving subscriber retention and reconnections and identifying pockets of growth while optimising business processes and systems for improved customer experience and operating efficiencies,” the company said.

“Although the direction of travel is encouraging for the business, improving underlying trends will take time to play through in the segment’s results,” MultiChoice acknowledged.

“For example, while the South African business delivered a sequential improvement in subscriber decline, losing 184k subscribers in 1H FY25 vs. 215k in 2H FY24, the Compact base remains under significant economic pressure, which will take time to resolve.”

Additionally, although the return of the English Premier League helped trends from August, the start of the Premier Soccer League season in South Africa was delayed until mid-September.

MultiChoice said this has slowed growth during the first six months but is likely to support improved trends into the second half of the financial year.

In contrast, MultiChoice said its Premium subscriber base (excluding Compact Plus) was trading broadly in line with expectations.

“The Access base has seen improved activity and reconnection rates, coinciding with the elimination of load-shedding and aided by additional sporting content such as La Liga and popular programming such as Sibongile & the Dlaminis,” it said.

MultiChoice said it received the dividend from the South African business in September, with R1.375 billion paid out to Phuthuma Nathi shareholders, which is in line with the prior year.

Looking beyond South Africa to the entire MultiChoice Group, revenue declined by 11% from R27.9 billion to R24.8 billion.

MultiChoice’s overall subscriber numbers declined by 10.6% from 16,703,000 to 14,935,000.

The company’s net after-tax loss also worsened from R911 million to R1.8 billion.

MultiChoice said unprecedented foreign exchange pressures and economic challenges in key African markets impacted earnings and dampened subscriber growth.

However, the company assured it was on track to right-size its cost base and grow new revenue streams to drive future growth as streaming gains traction at the expense of traditional pay TV.

The company said cost-cutting measures delivered R1.3 billion in permanent savings and was on track to reach its increased full-year target of R2.5 billion.

“These savings, in conjunction with improving sentiment in the group’s core South African market, should support the South African business in delivering a trading profit margin in the targeted mid-twenties range,” MultiChoice said.

MultiChoice reported that its paying Showmax customer base grew 30% year-on-year, although revenues declined by 40% from R555 million to R334 million.

The company also reported strong revenue growth in new products: DStv Steam +71%, DStv Internet +85%, DStv Insurance +31%, and KingMakers +53%.

MultiChoice also reported that it was on track to resolve its negative equity position in November 2024.

“The aim remains to minimise the US dollar funding requirement of the Rest of Africa business, despite the macro, currency and power-related headwinds in key African markets,” said MultiChoice.

“Given the weaker exchange rates in the 2H FY24 comparative period, the YoY trend should improve for the full FY25 compared to 1H FY25.”

The table below summarises MultiChoice’s interim results for the six months ended 30 September 2024.