MultiChoice reports strong results and bets on more local content
Its operations in the rest of Africa narrow trading losses thanks partly to cost cuts and revenue growth
Africa’s biggest pay-TV group, MultiChoice, reported higher core earnings on Monday as it added new subscribers and narrowed losses in its operations elsewhere in Africa.
The DStv operator has been struggling to make profits in its operations in the rest of Africa, where weakening currencies have increased the costs of delivering international content, which it pays for in dollars.
The company has been investing in cheaper local content to attract more subscribers in the middle and mass market, in a bid to boost the bottom line.
Multichoice, which was spun out of internet giant Naspers , said core headline earnings rose 24% to R1.9bn in the six months ended September.
Its operations in the rest of Africa, where its television content is beamed in roughly 11m households, narrowed trading losses by 47% to R800m thanks partly to cost cuts and subscriber fees.
“We are pleased with our solid financial performance and our ability to navigate a very challenging economic climate,” said CEO Calvo Mawela.
The company said its customer numbers rose 7% to nearly 19m after freezing prices for its premium packages to defend its market share in an increasingly competitive market where US streaming giant Netflix is making inroads.
Although streaming is still rare on a continent hobbled by slow internet speeds, Netflix has been slowly gaining momentum in SA despite relatively high data prices.
But Mawela is hopeful that a blend of Hollywood blockbusters and local production will set it apart from its US rival.
“We remain focused on ramping up our investment in local content and expanding our over-the-top-offering offering,” he said, referring to television content provided via high-speed internet connection rather than satellite.
MultiChoice runs streaming service, Showmax and DStv Now, an app that allows its users to live-stream its channels.
Naspers hived off MultiChoice in early 2019, creating a R54bn company with R6.9bn cash in its war chest. The company is on course to pay R2.5bn in dividends in the 2020 financial year.
With Tiisetso Motsoeneng