MultiChoice Group, a leading South African pay television company, has reported a significant 99% decrease in half-year profit.
The decline in profit was attributed to a decrease in subscriptions, largely due to challenging operating conditions.
The company revealed that subscriptions dropped by 5% in its South African operations and by 15% in other African markets.
This decline was primarily caused by weakened local currencies, constrained consumer spending in countries like Nigeria, and severe power disruptions in Zambia.
In response to these challenges, MultiChoice has had to implement measures to protect its core business.
This includes passing on inflation to consumers and implementing cost-cutting strategies.
Peter Takaendesa, head of equities at Mergence Investment Managers, emphasized the importance of these actions in safeguarding the company’s financial stability.
One significant development for MultiChoice shareholders is the firm offer made by Canal+, part of the French media group Vivendi, to acquire the shares it does not already own in the broadcaster.
The offer of 125 rand per share, totaling 35 billion rand ($1.94 billion), was seen as a timely opportunity for MultiChoice shareholders. Takaendesa expressed confidence in the deal, stating that Canal+ likely takes a long-term investment view on the transaction.
As a result of the cooperation agreement related to the Canal+ offer, MultiChoice declared no dividend during the mandatory offer period.
