Adedapo Adesanya
By Adedapo Adesanya
MultiChoice Group, owner of DSTv and GOTv, saw its subscription revenue grow by 2 per cent on an organic basis but on a reported basis, subscription revenue declined by 7 per cent due to a weaker Nigerian Naira, which affected the disposable incomes of consumers.
In a statement shared on Wednesday, the South African firm delivered a 26 per cent trading profit margin in its home country, while increasing trading profit in the Rest of Africa by 4 per cent, despite very challenging macro-economic conditions.
The active subscriber base for the company declined to 8.1 million, but it claimed effective retention efforts contributed to an improved subscriber mix.
The firm said overall active subscribers declined by 9 per cent, mainly due to a 13 per cent decline in the Rest of Africa business, with Nigeria, Angola and Zambia most affected, while the South African business was more resilient, declining by only 5 per cent.
Given the challenging consumer environment, Multichoice Group’s revenue increased by 3 per cent on an organic basis. However, due to weaker local currencies and consumer pressure, reported group revenue declined by 5 per cent to 56.0 billion Rand (ZAR)
The group’s trading profit across its verticals increased 24 per cent on an organic basis, despite the additional 1.4 billion Rand investment in Showmax to drive future growth.
“After factoring in the ZAR4.5bn impact related to foreign exchange weakness, reported trading profit declined by 21% to ZAR7.9bn,” the company said.
The company said its business in the Rest of the African market faced the toughest macro-economic conditions in its core markets with high, double-digit inflation and extreme depreciation of local currencies, (especially in Nigeria, Angola, Kenya and Zambia) which impacted Dollar revenues by 32 per cent.
In January this year, its fintech arm, Moment, began processing payments for DSTv, reaching a milestone of processing $85 million in payments in early March 2024.
So far, Moment has processed local and cross-border card payments in 44 Showmax markets and is already accounting for more than 20 per cent of Group’s payment volumes. It also joined real-time payment networks in 18 countries, including South Africa, and is currently piloting instant payment and account activation for DSTv.
The business raised an additional $22 million of funding, with MultiChoice contributing $8 million. As a result, Moment is now valued at $82 million and MultiChoice owns a 26 per cent stake.
The linear video entertainment business remains the mainstay of the group’s operations and provides a valuable base from which to expand its service offerings.
The group’s new streaming, interactive entertainment, fintech and connectivity services are having a positive impact on the business, and more importantly, on the lives of its customers.
“Going forward, the group will focus its efforts on scaling Showmax, Moment, and SuperSportBet, as well as on driving growth in insurance (NMSIS), DStv Internet and DStv Stream,” the statement added.
Speaking on the result, Mr Calvo Mawela, MultiChoice Group CEO said, “Four years after setting out a clear strategy of building Africa’s entertainment platform of choice and investing in services to support a broader ecosystem, our three core segments are now fully operational: video entertainment, interactive entertainment and fintech.
“Our focus now shifts to building on these solid foundations to drive growth in these new areas, and on further enhancing business efficiency across our operations.”
“While we are not alone in feeling the challenges of a weak consumer environment, I am proud of the speed and effectiveness of the team in implementing strategic actions to retain customers, safeguard cash generation and drive cost savings which surpassed our targets,” he added.
