South Africa’s television giant MultiChoice reported a pretax loss of 706 million rand ($38 million) for the fiscal year ending in March. This downturn was attributed to weak local currencies and a decline in subscriber numbers.
The company is currently the target of a takeover bid by France’s Canal+, which already owns more than 35 percent of MultiChoice’s shares.
“Volatile and weaker local currencies, power challenges in markets like South Africa, and a weak consumer environment due to rising inflation and high interest rates have created an extremely challenging environment,” MultiChoice stated.
This loss contrasts with a pretax profit of 921 million rand that the company reported the previous year. A significant factor in the loss was a nine percent drop in subscriptions.
MultiChoice’s operations in South Africa were particularly hard-hit, facing 275 days of rolling power cuts, which deterred potential subscribers who lacked backup power solutions.
Group revenue also declined by five percent to 56 billion rand. However, the company noted that, excluding the impact of currency fluctuations, revenue would have increased by three percent.
As Africa’s largest pay TV enterprise, MultiChoice plans to accelerate a cost-saving program, focus on retaining customers, leverage sports renewals, and further develop local content.
MultiChoice’s Showmax video streaming service, which relaunched in February, showed “encouraging early traction” with a 16 percent growth in its paying subscriber base, according to the company.
In April, Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, made a firm offer to acquire all remaining MultiChoice shares it does not already own. This bid, priced at 125 rand per share, was deemed “fair and reasonable” by an independent board appointed by the South African company.
Canal+ operates in 25 African countries through 16 subsidiaries and has eight million subscribers, according to the French group. Its investment in MultiChoice has enabled it to expand its presence in English-speaking and Portuguese-speaking countries across the continent.
Credit: AFP
