Africa's biggest pay-television company Multichoice Group has reported a 99 percent dip in half-year profits on the back of subscriber decline and foreign exchange volatility in the operating environment.
The company which owns DStv and operates in 50 sub-Saharan Africa countries said overall subscription dropped by 11 percent in the six months ended September 2024.
The decline in subscriber base by 1.8 million to 14.9 million has been attributed to the challenging macroeconomic conditions that negatively impacted consumers' disposable income.
"The Group is implementing several initiatives to support improved financials, including price adjustments to counter the impact of inflation, renegotiating content deals where feasible, restructuring select packages to enhance ARPU, optimising the DTT network, and intensifying anti-piracy initiatives," said Multichoice in a statement.
The company noted that although operating across Africa typically subjects the group to currency moves, abnormal currency weakness over the past 18 months have reduced its profits by close to R7 billion (Ksh50.31 billion).
In 2023, the Kenya Shilling took a major hit against the US Dollar , reaching a record low of 160.75 by the end of January this year.
Multichoice in 2023 adjusted prices upwards twice -in April and August-- to counter forex exchange and growth pressure.
Some of its users in markets out of South Africa have since discontinued their subscriptions owing to inflationary challenges.
"On a reported basis, revenues declined by 10 percent, impacted by foreign exchange pressures on the Rest of Africa business and a stronger Rand against the US Dollar," Multichoice said.
The company embarked on a cost saving initiative which it noted had resulted in permanent savings of R1.3bn in over the past six months and an increased target of ZAR2.5bn for the full year.
"We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives. The Group's liquidity position remains strong, with over ZAR10bn in total available funds," says Calvo Mawela, MultiChoice Group CEO.
