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MultiChoice Records Third Consecutive Semi-Annual Loss Amid Forex and Power Challenges

MultiChoice, Africa’s leading pay-TV provider, has reported a third consecutive semi-annual loss, citing challenges stemming from foreign exchange difficulties in Nigeria and persistent power outages in South Africa. The company disclosed a net loss of 1.32 billion rand ($72.4 million) for the six months ending September 30.

The financial challenges were attributed 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. MultiChoice also pointed to inflationary pressures in key markets like Nigeria and typical trends following a FIFA World Cup or Northern Hemisphere football off-season as contributing factors.

Despite the financial setbacks, MultiChoice reported the addition of 0.1 million subscribers, bringing the total to 13.0 million 90-day active subscribers. The active subscriber base remained stable at 8.9 million subscribers, and subscription revenues saw a 14% organic growth.

The company’s revenue of ZAR10.5 billion was flat but showed a 13% organic growth, with the weaker South African rand against the USD offsetting the impact of weaker local currencies relative to the USD.

The Return on Assets (RoA) segment delivered a trading profit of ZAR330 million, a ZAR2.2 billion year-on-year increase on an organic basis. This improvement was attributed to specific cost interventions around decoder subsidies and content costs.

However, weaker currencies remained a significant obstacle to profitability improvement, with average first-half exchanges sharply falling against the dollar. The sharp fall of the naira resulted in a substantial proportion of previously recognized losses incurred on cash remittances being recorded in trading profit, leading to a negative ZAR1.6 billion impact on the segment’s trading profit for the period, according to MultiChoice.

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