MultiChoice, which is the leading pay-TV provider in Africa, reported a third consecutive semi-annual loss. The company attributed its financial challenges to foreign exchange difficulties in Nigeria and persistent power outages in South Africa.
In a filing on Wednesday, Africa’s largest pay-TV company disclosed a net loss of 1.32 billion rand ($72.4m) for the six months ending September 30.
The loss was linked to the weak 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.
The company said that it was also influenced by inflationary pressures in key markets like Nigeria, as well as typical trends following a FIFA World Cup or Northern Hemisphere football off-season.
During the period, a total of 0.1 million subscribers were added, bringing the active subscriber base to 13.0 million 90-day active subscribers. The active subscriber base was broadly stable at 8.9 million subscribers, and subscription revenues grew 14% organically.
Revenue of ZAR10.5bn was flat (+13% organic), with a weaker ZAR against the USD on conversion offsetting the impact of weaker local currencies relative to the USD.
The RoA (return on assets) segment delivered a trading profit of ZAR330m (+ZAR2.2bn YoY on an organic basis), which was underpinned by specific cost interventions around decoder subsidies and content costs.
According to the company, weaker currencies remained a significant impediment to improvements in profitability, with average first-half exchanges falling sharply against the dollar.
The sharp fall of the naira resulted in a large proportion of the previously recognised losses incurred on cash remittances now being recorded in trading profit.
“The net effect of these forex movements was a negative ZAR1.6bn impact on the segment’s trading profit for the period,” it stated.
