MultiChoice's net asset position, also called shareholders' fund, turned negative at ZAR1.1 billion after its liabilities exceeded its assets at the end of the financial year.
South African-based satellite television service provider, MultiChoice, reported loss-making for the year ended 31 March 2024 after incurring a net loss of 4.1 billion rand, ($225.8 million at current exchange rate).
The company recorded loss for the second year running, its audited accounts released on Wednesday showed.
Shares in the company dropped by 0.25 per cent on the Johannesburg Stock Exchange following the news.
The latest loss compares to a loss after tax of 2.9 billion rands recorded in the corresponding period 2023 and was driven by net foreign exchange translation losses of 6 billion rands.
The substantial net foreign exchange translation losses resulted from losses on "USD-denominated non-quasi equity loans between MultiChoice Africa Holdings B.V. and MultiChoice Nigeria Limited," the company said.
"This follows the depreciation of the NGN against the USD from a closing rate of NGN464.50 in FY23 to NGN1 308.00 in FY24," it added.
According to the income statement, revenue dropped 5.9 per cent to 55 billion rands due to a slide in subscription fees, MultiChoice's primary income source.
"The combination of foreign exchange headwinds and a lower subscriber base resulted in a net decline in group revenues of 5% to ZAR56.0bn," MultiChoice said elsewhere in the financial report.
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General and administrative expenses jumped to 18.4 billion rands from 16.6 billion rands a year earlier after surges in employee costs and software license expenses, weakening operating profit.
"While we are not alone in feeling the challenges of a weak consumer environment, I am proud of the speed and effectiveness of the team in implementing strategic actions to retain customers, safeguard cash generation and drive cost savings which surpassed our targets," CEO Calvo Mawela said in a statement.
"It is the strength of this team, the quality of the underlying business, and the clarity of our strategy that underpins my confidence in delivering on our potential," he added.
The subscriber base fell by 9 per cent owing to a 13 per cent drop in subscription rate outside its base in South Africa, a business unit the company often refers to as "Rest of Africa."
MultiChoice noted that Nigeria, Zambia, and Angola were the most affected, while South African businesses were more resilient, posting a 5 per cent decline.
Loss before taxation stood at 706 million rands compared to a pre-tax profit of 921 million rands a year earlier.
