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MultiChoice Records $72 Million Loss Due To Naira Devaluation



MultiChoice Rolls Back Price Increases Following Court Ruling, Customer Backlash

Africa’s leading pay-TV provider, MultiChoice, has revealed a third consecutive semi-annual loss, citing foreign exchange difficulties in Nigeria and persistent power outages in South Africa as major contributors.

In a filing on Wednesday, News About Nigeria gathered that the company disclosed a net loss of 1.32 billion rand ($72.4 million) for the six months ending September 30.

The financial challenges were linked to the weakening performance of the Nigerian naira against the US dollar, following a 40% devaluation after Nigeria allowed the naira to trade more freely in mid-June.

MultiChoice also noted the impact of inflationary pressures in key markets, such as Nigeria, and typical trends following a FIFA World Cup or Northern Hemisphere football off-season.

During the reporting period, MultiChoice added 0.1 million subscribers, bringing the total to 13.0 million 90-day active subscribers.

The active subscriber base remained stable at 8.9 million, and subscription revenues experienced a 14% organic growth.

However, the overall revenue of ZAR 10.5 billion was flat, with a 13% organic growth, as the weaker ZAR against the USD on conversion offset the impact of weaker local currencies relative to the USD.

MultiChoice’s RoA (return on assets) segment delivered a trading profit of ZAR 330 million, a ZAR 2.2 billion increase YoY on an organic basis.

This growth was underpinned by specific cost interventions around decoder subsidies and content costs.

The company highlighted that weaker currencies continued to impede improvements in profitability, with average first-half exchanges experiencing a sharp decline against the dollar.

The sharp fall of the naira resulted in a significant negative impact of ZAR 1.6 billion on the segment’s trading profit for the period. The financial challenges underscore the complexities faced by companies operating in African markets amid currency fluctuations and economic uncertainties.