MultiChoice ekes out subscriber growth as SA underperforms

MultiChoice Group, the parent of brands such as DStv and SuperSport, has eked out a 5% improvement in subscribers from a year ago, with most of that growth coming from outside South Africa. The figure for South Africa was just 2%.

The JSE-listed broadcaster, which published its interim results for the six months to end-September on Thursday, said it added a million 90-day active subscribers to close the reporting period on 21.1 million.

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“The business in the rest of Africa (RoA) experienced accelerated growth primarily on the back of major sporting events and successful local content productions, while growth rates in South Africa were subdued by rising consumer pressure and tough ‘comparables’ given the boost in the prior year numbers triggered by strict lockdown restrictions at the time,” it said.

MultiChoice now has 12.2 million 90-day active households in RoA and 8.9 million in South Africa.

The group’s streaming platform Showmax had a rollicking time, by contrast, with subscribers increasing by 42% year on year.

Group core headline earnings, the group’s board considers a measure of sustainable business performance, were down 26% on the prior period to R2 billion.

“This reduction in earnings was attributable to higher realised foreign exchange losses caused by the stronger rand relative to the hedged rates of the group’s forward exchange contracts in the South African business during this period,” MultiChoice said. Despite this, the group said the hedging strategy makes sense as it protects it against currency fluctuations over time.

Group trading profit increased by 5% to R6 billion (6% organic), benefiting from 7% growth in South Africa, with RoA losses remaining largely in line with the prior period.

Cost containment

A cost-containment programme delivered R500 million in savings in the period, with the group renegotiating contracts for sports rights and general entertainment content.

Revenue increased by 3% (10% organic) to R26.8 billion, with a stronger rand reducing the revenue contribution on translation of the RoA and technology segments.

Subscription revenues came to R22.1 billion – organic growth of 7%. Advertising revenues, which were impacted by Covid-19 in the prior period, rebounded strongly, growing 77% year on year (84% organic), driven by the return of live sport, local content and a focus on digital advertising.

No interim dividend was declared.

Duncan McLeod is Editor of TechCentral, on which this article was first published here.

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