MultiChoice warns of 'most challenging' period in group's history

MultiChoice Group has warned it will deliver another set of financial results stained in red ink when it reports its half-year numbers next week.

In a trading statement on Thursday, the broadcaster — which owns DStv, SuperSport and Showmax, among other assets — said that in the six months to end-September 2024, it expects to report an adjusted core headline loss of as much as R3.60/share, down from a profit of R3.56/share a year ago.

The first half of the 2025 financial year was “negatively impacted by severe pressure in the macroeconomic, foreign exchange rate and consumer environment in key markets, most notably Nigeria and Zambia”.

The group expects reported trading profit to decline year on year and be close to flat on an organic basis

“As guided in the group’s full-year results for the year ended 31 March 2024, MultiChoice is pursuing an inflationary pricing strategy and targeting R2-billion in cost savings in the group’s full-year results ending 31 March 2025 in order to offset weaker subscriber activity and foreign exchange pressures,” it said.

It described the operating environment as “the most challenging” in the group’s history. Adding to the financial pressures is the huge investment the group has made – and continues to make – in Showmax, its streaming competitor to the likes of Netflix and Prime Video.

“MultiChoice has entered the peak investment cycle of Showmax and expects losses and headline losses per share to increase as a result of the early life cycle of the Showmax business,” it said.

Showmax billions

It also expects to report a further R2.1-billion in forex “movements” through its income statement on “non-quasi equity intergroup loans in the current period”.

“The group expects reported trading profit to decline year on year and be close to flat on an organic basis. However, excluding R2.3-billion in forex losses in the group’s rest of Africa business and a R1.6-billion incremental investment in the group’s Showmax business, group trading profit is expected to increase by over 30% year on year due to inflation-led pricing and cost optimisation processes.”