MultiChoice\u2019s equity decreased by 33.8% from R8.07 billion at the end of the previous financial year to R5.34 billion at the end of March 2023.<\/p>\n
This was revealed in the company\u2019s results for the financial year ending 31 March 2023.<\/p>\n
MultiChoice reported a loss of R2.9 billion for the 2022\/23 financial year, which drove a substantial decline in equity.<\/p>\n
The R3.9 billion payout in dividends for the previous financial year, on top of the loss, caused the large decline.<\/p>\n
MultiChoice reported comprehensive income of R966 million for the year. However, this was only due to favourable exchange rate movements during the financial year.<\/p>\n
MultiChoice continued to pay out a R3.9 billion dividend in the 2022 financial year, which could not be financed at the low-profit level.<\/p>\n
The dividend, therefore, had to be financed through MultiChoice\u2019s retained earnings causing the equity level to plummet, an indication that the dividend level is unsustainable.<\/p>\n
The company did not declare a dividend for the year ending 31 March 2023 due to a substantial decline in free cash flow.<\/p>\n
Consolidated free cash flow was down 48% year-on-year to R2.9 billion. This was despite group revenue increasing by 7% to R59.1 billion.<\/p>\n
Group trading profit decreased by 3% to R10 billion. MultiChoice attributes this to weaker earnings in its most developed market in South Africa and foreign exchange losses from its Rest of Africa operations.<\/p>\n
The lower earnings in South Africa were due to working capital investment, especially around prepayments for sports rights renewals and the timing of payments due to a financial system upgrade.<\/p>\n
The impact of South African macro challenges and the group\u2019s increased investment in Showmax caused SA margins to contract to 24% from 31% in the prior year.<\/p>\n
MultiChoice also warned investors that sustained high levels of load-shedding significantly impacted the activity levels of the DStv customer base.<\/p>\n
This has exacerbated the company\u2019s declining average revenue per user (ARPU) due to Premium subscribers either ending their subscriptions entirely or downgrading to a cheaper package.<\/p>\n
The Rest of Africa business returned to profitability and delivered a trading profit of R900 million, a R2.8 billion improvement from the prior year.<\/p>\n
This article was first published by Daily Investor<\/a><\/strong> and is republished with permission.<\/em><\/p>\n MultiChoice reported a loss of R2.9 billion for the 2022\/23 financial year, which drove a substantial decline in equity.\u00a0<\/p>\n","protected":false},"author":341119,"featured_media":441746,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[80335],"tags":[85,35,475],"class_list":["post-496703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-dstv","tag-headline","tag-multichoice"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/496703"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341119"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=496703"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/496703\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/441746"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=496703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=496703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=496703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Now read:\u00a0MultiChoice swings from R2.8 billion profit to R2.9 billion loss<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"