MultiChoice Reports $217m Annual Loss as Nigerian Subscribers Drop to 8.1m

MultiChoice, the parent company of popular pay-TV platform DStv, has reported a substantial annual loss of $217m, according to a report published by Space in Africa. The loss represents a significant downturn from the previous year, when the company recorded a profit of $180m.

Nigerian Subscriber Decline

A major contributing factor to the financial loss was a decline in MultiChoice’s Nigerian subscriber base. In the past year, the number of active subscribers in Nigeria has dropped from 9.9m to 8.1m, representing a loss of over 1.8m subscribers. The decline has been attributed to a combination of factors, including: * Economic challenges and rising inflation in Nigeria * Competition from other streaming services and free-to-air platforms * A lack of compelling content on DStv

Other Challenges

In addition to the subscriber loss in Nigeria, MultiChoice has also faced challenges in other markets, including South Africa, where a lack of live sports content due to COVID-19 restrictions has impacted revenue. The company has also been affected by currency fluctuations, with the devaluation of the South African Rand and Nigerian Naira reducing the value of its earnings in foreign currency.

Cost-Cutting Measures

To address the financial challenges, MultiChoice has implemented cost-cutting measures, including: * Layoffs and staff reductions * Reduced marketing expenses * Renegotiation of contracts with content providers Despite the losses, MultiChoice remains a dominant player in the African pay-TV market. The company is exploring new revenue streams, such as mobile streaming and online video content, to diversify its business and mitigate the impact of subscriber declines.Financial Losses and Challenges for MultiChoice

Financial Losses and Challenges for MultiChoice

MultiChoice, a South African pay-TV group, has reported a significant annual loss of $217 million (ZAR 4 billion) on revenue of $3 billion (ZAR 56 billion). The loss has primarily been attributed to macroeconomic challenges, which have impacted consumer spending and reduced the company’s active subscriber base.

Impact of Devaluation and Inflation

In markets like Nigeria and Ghana, devaluation and inflation have diminished the purchasing power of consumers, leading to a decrease in active subscribers. In Nigeria, for instance, active subscribers declined by 1.2 million to 8.1 million, resulting in a drop in the country’s revenue contribution to MultiChoice’s Rest of Africa segment from 44% to 35%. The group also faced remittance losses of $59 million from Nigeria due to foreign exchange market volatility.

Fiscal 2024 Challenges

Fiscal year 2024 (FY24) has presented significant challenges for MultiChoice’s Rest of Africa segment. The company encountered its most challenging macroeconomic conditions since 2016. Even in its home market, South Africa, active customers decreased by 5%, ending the year with 7.6 million active subscribers.

Load Shedding and Consumer Hesitation

Scheduled power outages (load shedding) in South Africa have deterred customers without backup power from subscribing to MultiChoice services due to the uncertainty of being able to watch television. Additionally, premium and mass market customer tiers have experienced declines across all markets.

Cost-Saving Measures and Investor Concerns

Despite implementing cost-saving measures, MultiChoice has been unable to fully offset the impact of economic realities on its operations. Shareholders are unlikely to be impressed by these results, which highlight the challenging operating environment for the company.MultiChoice Group, the parent company of DStv and GOtv, has reported a $217 million loss in its annual financial results for the year ended 31 March 2023. The loss was attributed to a decline in subscriber numbers in Nigeria, which is its largest market. According to the company’s financial statement, the number of subscribers in Nigeria dropped from 11.4 million to 8.1 million over the past year, a loss of 28%. The company stated that the decline was due to a combination of factors, including the economic downturn, increased competition, and the rise of streaming services. In South Africa, MultiChoice’s subscriber numbers remained relatively stable, with a slight increase of 1% to 8.2 million. However, the company’s revenue from South Africa declined by 2% due to a decrease in advertising spend and the impact of load shedding. Overall, MultiChoice’s revenue for the year increased by 3% to $5.7 billion, driven by growth in its other African markets. The company’s operating profit declined by 11% to $1.2 billion, and its net profit dropped by 35% to $613 million. In addition to the subscriber losses, MultiChoice also faced challenges with currency fluctuations and rising input costs. The company stated that it is taking steps to mitigate these challenges, including cost-cutting measures and increasing investment in streaming services. Despite the challenges, MultiChoice remains the dominant pay-TV provider in Africa. The company is well-positioned to benefit from the growing demand for video content on the continent.