MultiChoice Group (MCG) maintained focus on key strategies and grew new revenue streams in the first half of FY25, despite significant foreign exchange challenges and economic pressures impacting subscriber growth.
Key Highlights
- Foreign Exchange Impact: MCG reported that currency volatility reduced profits by nearly ZAR7 billion over 18 months, due to weak African currencies against the Rand. To mitigate, the Group accelerated its cost-saving program, achieving ZAR1.3 billion in savings over the past six months and setting a ZAR2.5 billion target for the year.
- Progress on Financial Health: CEO Calvo Mawela noted progress in addressing technical insolvency from non-cash accounting entries last year. He anticipates a positive equity position by the end of November, supported by over ZAR10 billion in available funds.
- Strategic Streaming Focus: MCG boosted investment in Showmax by ZAR1.6 billion, positioning the platform to leverage Africa’s streaming growth. Showmax’s customer base grew by 50% YoY.
- Subscriber Trends: MCG’s traditional pay-TV subscriber base saw a 5% sequential decline, a slower decrease than prior periods. On a YoY basis, the base dropped by 11%, reaching 14.9 million active subscribers, reflecting the ongoing economic impact on discretionary spending.
Financial Overview
- Revenue Growth: Group revenues rose 4% YoY to ZAR25.4 billion, driven by disciplined pricing and the growth of new products. However, currency pressures caused a 10% revenue decline on a reported basis.
- Profit and Cash Flow: Cost optimization efforts increased trading profit by 33% before Showmax costs. After additional Showmax investments, trading profit declined by 1% YoY to ZAR5 billion. Free cash flow remained positive at ZAR0.6 billion.
New Business Growth
- Digital Services: DStv Stream, DStv Internet, and DStv Insurance saw robust YoY growth, with KingMakers expanding by 27% in monthly active users in Nigeria and reporting a 53% revenue increase in local currency.
- SuperSport’s Success: With extensive live coverage of global sports events, SuperSport continues to attract audiences, achieving a 22% increase in live coverage hours YoY.
Looking Ahead
MultiChoice will focus on:
- Enhancing profitability and cash flow in South Africa.
- Streamlining operations in the Rest of Africa.
- Strengthening Showmax to lead Africa’s streaming market.
- Scaling KingMakers, Moment, and DStv Insurance for new revenue.
