South African pay-TV company MultiChoice reported a significant annual loss of R4 billion ($217 million) from revenues of R56 billion due to tough economic conditions. This loss may prompt shareholders to consider whether Canal+ ownership could provide relief.
Economic issues in Nigeria and Ghana, such as devaluation and inflation, lowered consumer spending power and reduced the number of active subscribers. In Nigeria, active subscribers dropped by 1.2 million to 8.1 million, decreasing the country’s revenue contribution to the Rest of Africa segment from 44% to 35%. MultiChoice stated, “Mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment,”.
The fiscal year 2024 was particularly challenging for MultiChoice’s operations outside South Africa, marking the toughest conditions since 2016. Even in South Africa, which fared better, the company saw a 5% drop in active subscribers, ending the year with 7.6 million. The ongoing issue of power outages made customers without backup power hesitant to subscribe.
Overall, premium customers (including Premium and Compact Plus packages) fell by 8%, and the mass-market tier saw a 2% decline.
Despite these results, which are likely to disappoint investors, MultiChoice implemented cost-cutting measures, reducing decoder subsidies and saving R1.9 billion.
However, market realities still posed challenges. For instance, the company faced $59 million in remittance losses in Nigeria due to volatile foreign exchange markets, a decrease from $132 million in FY 2023.
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