MultiChoice expects improved earnings despite tough trading conditions

MultiChoice, South Africa’s leading pay-TV operator, has warned shareholders of a significant shift in its financial performance for the fiscal year ended March 31, 2025, driven by challenging macro-economic conditions and structural changes in the video entertainment industry across sub-Saharan Africa.

It said, "The current period has seen the continuation of unprecedented financial disruption for economies, corporates and consumers across sub-Saharan Africa due to several macro-economic factors, including weaker average exchange rates, elevated inflation and interest rates, and power supply challenges.

"Combined with the impact of structural industry changes in video entertainment, such as the rise of piracy, streaming services and social media, as well as the cost of investing in Showmax, this has materially affected the performance of the MultiChoice Group. The group has acted decisively to counter these headwinds by, focusing on key areas within its control such as maintaining inflationary pricing discipline, growing new revenue streams and driving further efficiencies to manage costs and cash flows," the group said.

In a trading statement released on Thursday, MultiChoice projected a recovery in earnings per share (EPS), forecasting an increase of 128% to 132% compared to a loss of 935 cents per share in the prior year  This translates to an expected EPS range of R12.62 - R12.94 per share. 

The group said it expects to report positive earnings per share due to the recognition of a profit on the sale of a 60% shareholding in NMS Insurance Services (NMSIS) to Sanlam Life Insurance Limited in November 2024, and a downward adjustment to the Showmax put option liability.

Similarly, the group expects the headline loss per share (which excludes the profit on the sale of NMSIS) to narrow year-on-year. Headline earnings per share are expected to rise between 62% to 66%, in a range of between R4.43 - R4.72 per share, compared to a loss of 715c per share the prior year. Trading profit (reported) from R7.9 billion is likely to fall between 47% to 51%.

MultiChoice said, "The ongoing investment in the Showmax streaming business, which remains at an early stage of development and has yet to scale into its cost base, is expected to result in the group reporting a lower trading profit. On an organic basis (excluding the effects of foreign currency and group composition changes), the decline in trading profit is expected to be much smaller." Trading profit (reported) was expected to fall by between 47% to 51% from R7.9 billion. 

BUSINESS REPORT