…the decline in subscribers had a significant impact on MultiChoice’s revenue.
The iNews Times reports that MultiChoice, the parent company of popular satellite television providers DStv and GOtv, has revealed a significant loss of subscribers due to economic challenges and industry changes.
According to the company’s financial results for the year ended March 31 (FY25), released to the Johannesburg Stock Exchange (JSE) in South Africa, MultiChoice lost approximately 2.8 million active linear subscribers over the past two financial years.
The company attributed the decline to challenging macroeconomic factors, including currency depreciation and inflation, which have affected economies, corporates, and consumers across sub-Saharan Africa.
Additionally, structural industry changes in video entertainment, such as the rise of piracy, streaming services, and social media, have also contributed to the decline in subscribers.
For the period under review, MultiChoice reported that linear subscribers were down 1.2 million or eight percent year-on-year to 14.5 million active subscribers.
The loss was evenly split between South Africa and the rest of Africa, indicating ongoing broad-based pressure across the company’s entire customer base.
The decline in subscribers had a significant impact on MultiChoice’s revenue, which dropped by R5.2 billion or nine percent year-on-year to R50.8 billion.
The company attributed the decline to an 11 percent decrease in subscription revenues, caused by foreign currency and subscriber volume headwinds, as well as the deconsolidation of the NMSIS insurance business from December 2024.
Despite the challenges, MultiChoice achieved R3.7 billion in cost savings, exceeding initial targets.
The company’s trading profit, however, declined by R3.8 billion or 49 percent year-on-year to R4 billion, largely due to a R2.3 billion organic increase in trading losses in Showmax and R5.2 billion in foreign currency revenue losses.
MultiChoice’s adjusted core headline earnings, a measure of the company’s underlying performance, shifted to a loss of R800 million from earnings of R1.3 billion in the previous year.
The company incurred a free cash outflow of R500 million in FY25, impacted by lower profitability and higher lease repayments.
Despite the challenges, MultiChoice’s management acted decisively to ensure the company’s resilience. The company focused on key areas within its control, including cost management and investment in new long-term growth opportunities.
MultiChoice Group CEO, Calvo Mawela, expressed optimism about the company’s future, stating that the company’s disciplined execution and cost management position it well for the future.
“We remain focused on being Africa’s entertainment platform of choice,” Mawela said.
“Our strategy is shaped by developments in our industry, such as changes in technology driving shifts in consumer behavior, as well as the impact of the rise in piracy, streaming services, and social media.”
At the end of the financial year, MultiChoice held R5.1 billion in cash and cash equivalents and retained access to R3 billion in undrawn general borrowing facilities.
The company also repaid a part of its R12 billion term loan using the R900 million upfront proceeds from the NMSIS transaction.
Despite the significant challenges, MultiChoice remains committed to its strategy of delivering entertainment to African households.
The company’s focus on cost management, investment in new growth opportunities, and resilience in the face of economic headwinds position it for potential future growth, iNews Times reports.
