Supersport and DStv owner, MultiChoice, which is being acquired by global broadcaster Canal+, more than doubled its losses in 2024.
This was after its subscriber numbers fell, substantial currency headwinds and an increase in investment spending such as for the launch of Showmax.
The headline loss per share slid to 718 cents for the year from the 301c loss at the same time a year before. No dividend was declared in lieu of the Canal+ offer.
As of March 31 its total assets stood at R43.85 billion, down from R47.6bn in 2023, while its liabilities are at R43.8bn, less than R47.6bn.
CFO Tim Jacobs said such were the currency headwinds that while the group reported some R4.3 billion of foreign exchange losses in the period from its listing in 2019 to 2023, in the past year it had to deal with R4.5bn of African foreign exchange losses in one year.
He said while the balance showed a negative equity position, or insolvency, this did not take into account that equity comprised three non-cash items, and that the group had remained soundly liquid, and with strong cash resources and generation capability.
The group held R7.3bn in cash and its equivalents at March 31, and retained access to R4.1bn in undrawn group borrowing facilities. The group's lenders were also comfortable with the solvency and liquidity position, said Jacobs.
Adjusted core headline earnings, its board's measure of the performance, fell 20% to R1.3 billion - higher realised hedging gains and a narrower gap between the official and parallel naira rates in Nigeria, were more than offset by weaker trading profitability.
The increased cash flow investment in Showmax involved R1.4bn in additional trading losses and R1.7bn in platform technology advances. This, and the impact of weaker currencies on profitability, resulted in free cash flow declining by 79% to R589 million.
Directors said in the results the year had seen the culmination of four years of strategic planning, with MultiChoice now fully operational in three core segments, video entertainment, interactive entertainment and fintech.
Showmax, SuperSportBet and Moment were all launched in the year and had showed strong initial user traction, they said. Moment, in its first year as an operational fintech, was already dealing with 30% of the payments to MultiChoice in South Africa, said Jacobs.
On the back of inflationary pricing and in a year that included the premiere of Shaka Ilembe and four World Cup events, the group grew revenue by 3%.
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Cost optimisation realised R1.9bn in savings against an initial target of R800m, while set-top subsidies were reduced by R1.5bn year-on-year.
Segmental profitability was in line with the group's guidance, with margins in South Africa in the mid-twenties, Rest of Africa increasing trading profit to R1.3bn from 48% growth, Showmax posting R2.6bn trading losses, below the R3bn-4bn guided loss range, and Irdeto delivering a trading margin of 23%.
A 9% decline in active subscribers was ascribed to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment - the South African business showed a 5% decline in subscribers.
Showmax, which relaunched in February, was showing early traction - it delivered record single-month growth in March 2024, with the paying subscriber base growing 16% from the migrated base at relaunch to year-end.
The combination of foreign exchange headwinds and a lower subscriber base resulted in 5% lower revenues to R56bn.
Weaker subscriber trends and foreign exchange pressures flowed through to group trading profit which was down 21% to R7.9bn. Excluding the foreign exchange losses, organic growth was 24%, said Jacobs. The start of the Showmax investment cycle reduced the group's trading profit by R1.4bn.
Looking ahead, Jacobs said they would continue to drive growth in certain areas - Showmax, Moment, SuperSportBet, DStv Insurance, DStv Internet and DStv Stream - while supporting its DStv and GOtv customers and support their activity rates.
