South Africa’s television giant MultiChoice reported a pretax loss of 706 million rand ($38 million) for the fiscal year ending in March. The company attributed this downturn to weak local currencies and a significant drop in subscriber numbers.
MultiChoice is currently the subject of a takeover bid by France’s Canal+, which already owns more than 35 percent of MultiChoice’s shares.
“Volatile and weaker local currencies, power challenges in markets like South Africa, and a weak consumer environment due to rising inflation and high interest rates have created an extremely challenging environment,”
the company stated.
This loss is a stark contrast to the 921 million rand profit before taxes reported in the previous year. The situation was exacerbated by a nine percent decline in subscriptions.
In South Africa, the business faced 275 days of rolling power cuts, which deterred potential subscribers who lacked backup power solutions.
Group revenue also dropped by five percent to 56 billion rand. However, the company noted that without the impact of currency fluctuations, revenue would have increased by three percent.
MultiChoice, Africa’s largest pay TV enterprise, announced plans to accelerate its cost-saving programme, prioritize customer retention, leverage sports renewals, and further develop local content.
The company’s Showmax video streaming service, which was re-launched in February, has shown “encouraging early traction” with a 16 percent increase in its paying subscriber base, according to the company.
In April, Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, made a firm offer to acquire all MultiChoice shares it does not already own.
The offer, which increased from an earlier bid that was rejected, stands at 125 rand per share. This amount has been deemed
“fair and reasonable”
by an independent board appointed by the South African firm.
Canal+ operates in 25 African countries through 16 subsidiaries and has eight million subscribers, according to the French group. Its stake in MultiChoice has allowed it to establish a presence in English-speaking and Portuguese-speaking nations across the continent.
