Africa’s leading entertainment company, MultiChoice Group, according to its financial statement for the six months ended September 30, 2023, showed a resilient operational performance across sectors where it operates.
According to the statement sighted by Business Elites, subscription revenues increased 3% with Showmax contributing 25%, group trading profit increased 18%, and its working cash flow impacted by an increased investment in Showmax as well as lower contribution from its South African business.
The company, which has continued to invest in technology in a bid to stay ahead of the dynamics in the taste and video consumption of customers, says it continues to strive to build a differentiated ecosystem and develop additional revenue streams. Here are five other key takeaways from the financial report:
Its subscriber base now stands at 22 million households, with South Africa contributing 8.6 million of this while the rest of Africa contributes 13.0 million.
Reduced group revenue
Group revenue stayed at ZAR28.3bn, down by 1% (up 4% organic) due to weaker local currencies and consumer pressure, offset by the conversion benefits of a weaker ZAR on the group’s USD reporting segments and inflationary-led price increases in the majority of the group’s markets.
Increased subscription revenue
An increase of 3% on an organic basis is attributed to strong growth in the Rest of Africa (+14%) and Showmax (+25%), offset by pressure in the South African business (-4%).
Meanwhile, group trading profit increased by 18% on an organic and like-for-like basis (excluding the additional investment in Showmax), reducing to a 10% improvement once the investment in Showmax is considered.
On a reported basis, trading profit was 18% lower at ZAR5.0bn, and this was impacted by foreign exchange headwinds of ZAR1.7bn, Showmax trading losses of ZAR0.8bn and a lower contribution from South Africa. Focus on cost optimisation delivered ZAR0.5bn in cost savings.
Increased total content cost
Total content costs went up by 10%(+4%% organic), driven by ongoing investment in local content (+16% YoY) and several World Cups hosted in the first half of the year.
Core headline earnings stood at ZAR1.9bn, down 5%, impacted by the same drivers weighing on trading profit, with some offset from realised gains on forward exchange contracts and lower tax and minorities in South Africa.
Adjusted core headline earnings (incorporating the impact of losses incurred on cash remittances in markets such as Nigeria): increased 25% to ZAR1.5bn, resulting from lower losses on cash remittances as the gap between the official and parallel naira rates narrowed following the material depreciation in the official naira rate during the period.
It retained cash and cash equivalents of ZAR5.6bn and access to ZAR9.0bn in undrawn facilities; financial debt stable at ZAR8.1bn with Net debt:EBITDA of 1.30x.
Compelling local content development
According to the group, it has continued to deliver compelling local content in a bid to provide its customers with a wide array of internationally renowned shows. No doubt, the group plays a vital role in the continent’s video entertainment sector.
It also noted that it t has increased its spending on local content by 16% YoY, taking its local content library to almost 80,000 hours. Going forward, the group plans to enhance the monetisation of each hour of content produced by leveraging both its linear and streaming platforms.
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