Multichoice loses $72m on naira devaluation

MultiChoice, Africa’s leading pay-TV provider, reported a third consecutive semi-annual loss, attributing its financial challenges to foreign exchange difficulties in Nigeria and persistent power outages in South Africa.

In a filing on Wednesday, Africa’s largest pay-tv company disclosed a net loss of 1.32 billion rand ($72.4m) for the six months ending September 30.

The loss was linked to the Nigerian naira’s weak performance against the US dollar; following a 40 per cent devaluation after Nigeria allowed the naira to trade more freely in mid-June.

The firm said it was influenced by inflationary pressures in key markets like Nigeria and typical trends following a FIFA World Cup or Northern Hemisphere football off-season.

 “A total of 0.1m subscribers were added to end the period at 13.0m 90-day active subscribers. The active subscriber base was broadly stable at 8.9 million subscribers and subscription revenues grew 14 per cent organically.

 “Revenue of ZAR10.5bn was flat (+13 per cent organic) with a weaker ZAR against the USD on conversion, offsetting the impact of weaker local currencies relative to the USD.

 “The RoA (return on assets) segment delivered a trading profit of ZAR330m (+ZAR2.2bn YoY on an organic basis) which was underpinned by specific cost interventions around decoder subsidies and content costs.”

According to the firm, weaker currencies remained a significant impediment to improvements in profitability, with average first-half exchanges falling sharply against the dollar.

 “The sharp fall of the naira resulted in a large proportion of the previously recognised losses incurred on cash remittances now being recorded in trading profit.

 “The net effect of these forex movements was a negative ZAR1.6bn impact on the segment’s trading profit for the period,” it stated.

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