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In its financial statement released on Tuesday, <a href="http://www.multichoice.com" target="_blank" rel="noreferrer noopener">Multichoice Group</a> has reported a huge financial decline. The South African pay television company recorded a 99% decline in its half-year profit. The satellite TV provider has tagged the operating environment as “extremely hostile.“ 
The &nbsp;<a target="_blank" href="http://www.now.dstv.com/" rel="noreferrer noopener">DStv</a>, <a target="_blank" href="http://www.supersport.com/" rel="noreferrer noopener">SuperSport</a>, and <a target="_blank" href="https://www.showmax.com/" rel="noreferrer noopener">Showmax</a> owner, whose Pay TV business operates across 50 countries in sub-Saharan Africa, said its performance was majorly affected by weaker local currencies. It also pointed out that constrained consumer spending particularly in Nigeria and extreme power disruptions in Zambia marred its headline loss. 
<figure class="wp-block-image size-full is-resized">
 <img loading="lazy" decoding="async" width="1024" height="739" src="https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1.jpg" alt="MultiChoice launches Moment to expand payment infrastructure for Africans" class="wp-image-18660" style="width: 100%;height:auto" srcset="https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1.jpg 1024w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-300x217.jpg 300w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-768x554.jpg 768w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-640x462.jpg 640w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-380x274.jpg 380w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-550x397.jpg 550w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-800x577.jpg 800w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-760x548.jpg 760w, https://technext24.com/wp-content/uploads/2019/02/Multichoice-2-2-1024x739-1-600x433.jpg 600w" sizes="(max-width: 1024px) 100vw, 1024px">
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Last week, we <a target="_blank" href="https://technext24.com/2024/11/08/multichoice-announce-financial-loss-2024/" rel="noreferrer noopener">reported</a> that Multichoice announced it would release a negative value financial report this week. In a statement released, it stressed how macroeconomic fluctuations and external exchange rates have negatively impacted its H1 2024. 
“The first half of the 2024 financial year was negatively impacted by severe pressure in the macroeconomic, foreign exchange rate, and consumer environment in key markets, most notably Nigeria and Zambia,” the company said. 
Multichoice expressed that its adjusted core headline earnings per share fell to 2 cents per share for the six months ended Sept. 30. This is from 356 cents per share last year. It added that subscriptions fell by 5% in South Africa and 15% across other parts of Africa where it operates. 
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 <img loading="lazy" decoding="async" width="1200" height="800" src="https://technext24.com/wp-content/uploads/2024/04/DStv-dish-on-grass.jpeg" alt="Multichoice is considering Canal+'s $1.9bn buyout offer" class="wp-image-229896">
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On revenue, the group’s earnings fell by 10% to 25.4 billion rand ($1.41 billion) on a reported basis. However, it grew by 4% on an organic basis, which excludes the impact of foreign exchange effects, mergers, and acquisitions. 
Following the announcement, Multichoice Group shares have been down by 0.3%. 
<h4 id="multichoice-headline-loss-no-thanks-to-investment-in-showmax" class="wp-block-heading">Multichoice Headline Loss: No Thanks to Investment in Showmax</h4> 
Multichoice pointed out that its profit was further milked by incremental investments in streaming platform Showmax. For the past calendar year, Multichoice has been prioritized to fight off competition from streaming giants Netflix, Amazon, and Disney. 
“Stripping out Showmax, the group would have seen reported trading profit increase by 28% on an organic basis,” said Multichoice. 
The satellite TV company has highlighted that Showmax has reached the peak of its investment cycle “Multichoice has entered the peak investment cycle of Showmax and expects losses and headline losses per share to increase as a result of the early life cycle of the Showmax business,” it said. 
 It also expects to report a further R2.1-billion in forex “movements” through its income statement on “non-quasi equity intergroup loans in the current period”. 
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 <img loading="lazy" decoding="async" width="800" height="400" src="https://technext24.com/wp-content/uploads/2024/01/Untitled-design-30.png" alt="Showmax users in Nigeria to pay N2900 for Premier League package ahead of February relaunch" class="wp-image-224790" style="width: 100%;height:auto">
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 Showmax
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“However, excluding R2.3-billion in forex losses in the group’s rest of Africa business and an R1.6-billion incremental investment in the group’s Showmax business, group trading profit is expected to increase by over 30% year on year due to inflation-led pricing and cost optimization processes,” a statement from the company reads. 
Showmax is an online subscription video-on-demand (SVOD) service that launched in South Africa on 19 August 2015. Its majority owner is Multichoice, which owns 70% of the business. American conglomerate NBCUniversal owns 30% in all territories except Nigeria, where NBCUniversal holds an indirect 23.7% stake in the local subsidiary. 
<h4 id="what-nigerian-subscribers-should-expect" class="wp-block-heading">What Nigerian Subscribers Should Expect</h4> 
After announcing a negative financial result for H1 2024, expectations will be on how the satellite television company plans to make a positive financial turn. In its plans, Multichoice pointed out that it will use an inflationary pricing strategy to recover its losses. 
The company stressed that to cover the loss and save costs, it aims to leverage on introducing an inflationary pricing strategy. 
“As guided in the group’s full-year results for the year ended 31 March 2024, MultiChoice is pursuing an inflationary pricing strategy and targeting R2-billion in cost savings in the group’s full-year results ending 31 March 2025 to offset weaker subscriber activity and foreign exchange pressures,” it said. 
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 <img loading="lazy" decoding="async" width="800" height="400" src="https://technext24.com/wp-content/uploads/2023/04/Multichoice-Nigeria-to-increase-DStv-GOtv-subscription-by-16-from-May-1st.png" alt="Multichoice Nigeria to increase DStv &amp; GOtv subscription by 16% from May 1st" class="wp-image-191079">
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On 1st of May, 2024, Multichoice proceeded with the upward adjustment of its prices for DStv and GOtv subscribers by 25%, despite the Nigerian court ruling ordering a stay of action. The company announced that the new price regime would take effect on the 15th of May. 
After the price increase, the Nigerian lawyer, Barrister Onifade, asked the Tribunal to order Multichoice Nigeria Limited to pay the sum of N1,000,000,000.00 (One Billion Naira only) or any amount the Tribunal deemed may fit appropriate in this circumstance for “deliberately disobeying, contravening, and failure to comply with the Interim Order of this Honourable Tribunal granted on the 29th April 2024.” 
Although Multichoice Nigeria <a target="_blank" href="https://nairametrics.com/2024/05/07/multichoice-nigeria-challenges-tribunals-jurisdiction-to-restrain-dstvgotv-price-hike-others/?amp=1____" rel="noreferrer noopener">challenged</a> the jurisdiction of the Competition and Consumer Protection Tribunal (CCPT) to restrain it from increasing the prices of its DStv and GOtv packages, it was mandated to pay a N150 million penalty.&nbsp; 
With the group tagging the Nigerian market as a major contributor to its financial decline, only time can tell its next move. 
Also Read:<a target="_blank" href="https://technext24.com/2024/11/08/multichoice-announce-financial-loss-2024/" rel="noreferrer noopener"> Multichoice set to announce high financial loss in H1 2024</a>
The post <a href="https://technext24.com/2024/11/12/multichoice-records-99-decline-2024/">Multichoice records 99% decline in its half-year profit as subscriptions fell by 15%</a> first appeared on <a href="https://technext24.com">Technext</a>.

Multichoice records 99% decline in its half-year profit as subscriptions fell by 15%

Technext.ng

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