MultiChoice, South Africa’s leading TV giant, reported a pretax loss of 706 million rand ($38 million) for the fiscal year ending in March, attributing the downturn to weak local currencies and a decline in subscriber numbers.
Facing a takeover bid from France’s Canal+, which already owns more than 35 percent of its shares, MultiChoice cited several challenges. “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 comes after a pretax profit of 921 million rand in the previous year, exacerbated by a nine percent drop in subscriptions. South African operations were particularly hard-hit, enduring 275 days of rolling power cuts, which deterred potential subscribers lacking backup power solutions.
Group revenue fell five percent to 56 billion rand, though the company noted that, excluding currency fluctuations, revenue would have risen by three percent.
MultiChoice, Africa’s largest pay TV provider, plans to accelerate cost-saving measures, focus on retaining customers, leverage sports renewals, and expand its local content offerings. The company also highlighted the positive early performance of its re-launched Showmax streaming service, which saw a 16 percent growth in its paying subscriber base since February.
In April, Canal+, part of the Vivendi group owned by billionaire Vincent Bollore, made a firm offer to acquire all remaining MultiChoice shares, upping an earlier bid to 125 rand per share. This offer was deemed “fair and reasonable” by an independent board appointed by MultiChoice.
Canal+ operates in 25 African countries through 16 subsidiaries and has a subscriber base of eight million. Its significant stake in MultiChoice has bolstered its presence in English-speaking and Portuguese-speaking regions across the continent.
