NAIRA DEVALUATION SINKS MULTICHOICE INTO $72M LOSS
MultiChoice, Africa’s leading pay-tv provider, has reported a third consecutive semi-annual loss, blaming forex challenges in Nigeria and persistent power outages in South Africa for its financial woes.
In a recent filing, MultiChoice revealed a net loss of 1.32 billion rand ($72.4 million) for the six months ending September 30.
The company attributed the loss to the poor performance of the Nigerian naira against the US dollar.
Following Nigeria’s decision to allow the naira to trade more freely against the dollar in mid-June, the currency experienced a 40percent devaluation. This forced MultiChoice to revalue inter-group loans, resulting in significant foreign exchange losses.
The company noted that after experiencing robust growth with the addition of 1.4 million new subscribers in the fiscal year 2023, subscriber expansion in the Rest of Africa was more moderate in the first half of fiscal year 2024.
“This was due to the impact of inflationary pressures in key markets like Nigeria, and similar trends to previous periods which followed a FIFA World Cup or northern hemisphere football off-season,” it said.
According to the firm, weaker currencies remained a significant impediment to improvements in profitability, with average first-half exchanges falling sharply against the dollar.
“The sharp fall of the naira resulted in a large proportion of the previously recognised losses incurred on cash remittances now being recorded in trading profit.
“The net effect of these forex movements was a negative ZAR1.6bn impact on the segment’s trading profit for the period,” it stated.