MultiChoice Group, which is in the process of becoming part of the France-based global broadcast group Canal+, said yesterday that it anticipated resolving its negative equity position by the end of this month.
The results for the six months to September 30, released yesterday, showed that trading profit fell by 46% due to foreign exchange headwinds in the Rest of Africa business (R2.3 billion) and investment in Showmax (R1.6bn).
MultiChoice chief financial officer Tim Jacob said in an interview that the group has faced unprecedented external headwinds in the past year, the most notable being currency depreciation that has reduced trading profit by close to R7bn over 18 months.
Falling subscriber numbers were also problematic in Nigeria and Zambia, in particular, due to the weak consumer environments particularly in Nigeria, and load shedding currently reaching up to 20 hours a day in Zambia, he said.
Adjusted interim core headline earnings, the board’s measure of the performance of the business, fell to R7 million from R1.5bn.
The pressure on trading performance, combined with non-cash foreign exchange losses on the translation of inter-group loans of R2.1bn, resulted in a negative equity position of R2.7bn at the end of the period.
However, Jacob sale that the sale of the group insurance business to Sanlam was likely to realise around R3bn. There would also likely be a more moderate foreign exchange loss impact in the second half, and there were potentially smaller losses in Nigeria, he said.
He said management was happy with the operational performance but “a little disappointed” in the subscriber losses.
Notwithstanding this, there were “green shoots” as the rate of falling subscriber numbers had slowed, with the decline in the premium bouquet materially lower than in the second half of last year, he said.
Jacobs said that the negative equity position did not impact the group liquidity position, given the non-cash nature of the adjustments that had resulted in negative equity.
The liquidity position was strong, with R10.1bn in available funds.
Operationally, a step-up in cost optimisation supported a 1% decline in trading profit on an organic basis. Stripping out Showmax, trading profit would have increased by 28% on an organic basis.
Better cost management had resulted in R1.3bn in savings, and the full-year target increased to R2.5bn from R2bn set at the beginning of the year.
The subscriber attrition rate slowed in both South Africa and the Rest of Africa. Showmax’s paying subscriber base increased by 50%, excluding discontinued services.
Positive momentum was maintained in the DStv Stream and Extra Stream, DStv Internet, DStv Insurance, and the sports betting and fintech investee businesses.
Jacobs also mentioned good progress had been made on the Canal+ transaction, with the merger control filing submitted to the South African Competition Commission on September 30.
MultiChoice’s subscriber base declined by 11%, or 1.8 million subscribers, to 14.9 million active subscribers as of September 30.
The group said that while this indicated an “extremely hostile operating environment,” the first half of the 2025 financial year reflected a 5% decline versus the 6% decline reported in the second half of 2024.
The loss in subscribers was skewed towards the Rest of Africa, which lost 15% of its base versus 5% in South Africa.
Group revenues were down by 10% on a reported basis due to subscriber weakness, foreign exchange rate pressures impacting the Rest of Africa business, and the translation effects of a stronger rand against the US dollar.
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