MultiChoice, the owner of DStv, has reported a significant loss of R4.1 billion for the year ending March 31, 2024, rendering the company technically insolvent.
On Wednesday, the South African pay television company revealed a pre-tax loss of 706 million rand ($38 million) for the year, attributing this to currency volatility and weak consumer spending.
Economic challenges in many African nations and risk aversion by investors purchasing African exports have strained foreign currency reserves, leading to market volatility.
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This marks MultiChoice’s worst financial performance to date, with a 42% increase in losses compared to the previous year.
The company’s financial troubles are due to a combination of a 9% decline in active subscribers and unfavorable foreign exchange rates.
This resulted in a 5% decrease in group revenue to R56 billion and a 21% decline in group trading profit to R7.9 billion.
Subscriber losses were noted in all markets, including DStv’s South African and Rest of Africa segments.
Additionally, MultiChoice’s balance sheet indicates technical insolvency, with total assets decreasing from R47.6 billion to R43.9 billion, while liabilities have increased to about R45 billion.
With a negative equity of R1.068 billion, MultiChoice would be unable to settle all its debts if forced to liquidate its assets.
Despite the dire financial situation, MultiChoice maintained a confident stance, describing its operational performance as “resilient†and indicating signs of an impending turnaround.
The company is focusing on cash generation and has accelerated its cost-reduction program, aiming to save R2 billion by the 2025 financial year.
“Clear strategic milestones were reached, with the group successfully launching Showmax 2.0, SuperSportBet and Moment,†MultiChoice said.
“All of these are now revenue-generating and supporting the group’s future growth prospects.â€
MultiChoice Group CEO Calvo Mawela noted that after four years of establishing a clear strategy to build Africa’s preferred entertainment platform and investing in services to support a broader ecosystem, its three core segments—video entertainment, interactive entertainment, and fintech—are now fully operational.
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“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,†the company said.
“The group will continue its efforts to drive growth in focused areas, notably Showmax, Moment, SuperSportBet, DStv Insurance, DStv Internet, and DStv Stream.â€
MultiChoice aims to achieve this while working diligently to retain its DStv and GOtv customers and support their engagement throughout the upcoming financial year.
