South African pay-TV group, MultiChoice, reported total annual losses of R4 billion ($217 million) on revenues of R56 billion, driven by macroeconomic challenges. These challenges might lead shareholders to consider if ownership by Canal+ could offer some relief.
In markets like Nigeria and Ghana, devaluation and inflation have reduced consumer spending power, resulting in a decline in active subscribers. In Nigeria, the number of active subscribers dropped to 8.1 million, a decline of 1.2 million, decreasing the country’s revenue contribution to the Rest of Africa segment from 44% to 35%.
In its executive summary announcing the results, MultiChoice stated that mass-market customers in countries like Nigeria had to prioritize basic necessities over entertainment. The company noted that FY24 presented the toughest set of macro-economic conditions for the Rest of Africa (all markets outside South Africa) business since 2016.
The South African business, showing more resilience with only a 5% decline in active customers (7.6 million active subscribers at year-end), also faced challenges. MultiChoice highlighted that consistent loadshedding through FY24 created an environment where customers without backup power were reluctant to subscribe due to the uncertainty of whether they would be able to watch.
Across all markets, the number of premium customers, including those on the Premium and Compact Plus bouquets, declined by 8%, while the mass market tier saw a 2% decline.
These annual results, which are unlikely to impress investors, come amid a backdrop of cost-cutting measures by the pay-TV group. The group reduced subsidies on decoders, achieving cost savings of R1.9 billion. However, it could not avoid the market realities in which it operates.
For example, the group incurred remittance losses of $59 million during the year from Nigeria, as FX market volatility caused prices to fluctuate sharply. In FY 2023, this figure was $132 million.
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