MultiChoice loses 2.8 million subscribers

 

MultiChioce, owners of DStv and GOtv, has lost about 2.8 million subscribers as economic challenges continue to take a toll on households across its markets.

This was revealed in its financial results for the year ended March 31 (FY25), released to the Johannesburg Stock Exchange (JSE), South Africa.

The firm explained that the past two financial years have been a period of significant financial disruption for economies, corporates and consumers across sub-Saharan Africa (SSA) due to challenging macro-economic factors.

It noted that combined with the impact of structural industry changes in video entertainment such as the rise of piracy, streaming services and social media, this has materially affected the overall performance of the MultiChoice Group.

MultiChoice said over this period, the group lost 2.8 million active linear subscribers and had to absorb a R10.2 billion negative impact on its topline due to local currency depreciation against the dollar.

For the period under review, the company revealed that linear subscribers were down 1.2 million or eight per cent year-on-year (YoY) to 14.5 million active subscribers, with the loss evenly split between South Africa and the rest of Africa.

Although reflecting an improvement in FY24 trends, MultiChoice said this indicated ongoing broad-based pressure across the group’s entire customer base.

The report revealed that the Group revenue declined by R5.2 billion or nine per cent YoY to R50.8 billion, mainly due to an 11 per cent decline in subscription revenues (-1 per cent organic) caused by foreign currency and subscriber volume headwinds and the deconsolidation of the NMSIS insurance business from December 2024.

According to the firm, this was partially offset by inflationary pricing and new product growth (DStv Internet, DStv Stream and Extra Stream).

Trading profit, which declined by R3.8 billion or 49 per cent YoY to R4 billion, was materially affected by the R2.3 billion organic increase in trading losses in Showmax and the R5.2 billion in foreign currency revenue losses, partially offset by a significant outperformance in delivering total cost savings of R3.7 billion.

Adjusted core headline earnings, the board’s revised measure of the underlying performance of the business, shifted to a loss of R800 million (FY24: earnings of R1.3 billion) due to lower trading profit and hedging losses in FY25 (compared to gains in FY24), partially offset by smaller losses on cash remittances from Nigeria.

The group incurred a free cash outflow of R500 million in FY25 (FY24: inflow of R600 million), impacted by lower profitability, higher lease repayments due to timing and partially offset by improved working capital management as well as a 29 per cent YoY decline in CaPEX.

At year-end, the group held R5.1 billion in cash and cash equivalents and retained access to R3 billion in undrawn general borrowing facilities.

The company said a part of the R12 billion term loan was repaid early by using the R900 million upfront proceeds from the NMSIS transaction (ie R1.2 billion, net of tax).

Amid the challenges, MultiChoice states that management acted decisively to ensure that the group could withstand these headwinds, focusing on key areas within its control.

Adjusted core headline earnings, the board’s revised measure of the underlying performance of the business, shifted to a loss of R800 million (FY24: earnings of R1.3 billion) due to lower trading profit and hedging losses in FY25 (compared to gains in FY24), partially offset by smaller losses on cash remittances from Nigeria.

The group incurred a free cash outflow of R500 million in FY25 (FY24: inflow of R600 million), impacted by lower profitability, higher lease repayments due to timing and partially offset by improved working capital management as well as a 29 per cent YoY decline in CaPEX.

At year-end, the group held R5.1 billion in cash and cash equivalents and retained access to R3 billion in undrawn general borrowing facilities.

The company said a part of the R12 billion term loan was repaid early by using the R900 million upfront proceeds from the NMSIS transaction (ie R1.2 billion, net of tax).

Amid the challenges, MultiChoice states that management acted decisively to ensure that the group could withstand these headwinds, focusing on key areas within its control.