MultiChoice, the entertainment company, cautioned on Friday that its financial results for the year ending March 31, 2025, will likely reflect ongoing economic challenges, including a cost-of-living crisis and currency depreciation across key markets.
The group, which operates in South Africa and the broader African continent, said in a voluntary operational update that household spending remains under strain due to high inflation and elevated interest rates.
This follows its interim results for the period ended September 30, 2024, released in November, which highlighted a tough consumer environment and "unprecedented external adversities" such as disrupted power supply and macro-economic headwinds.
"Since then, the group has continued to experience pressure, as household spending remained constrained," MultiChoice stated, noting that these factors, combined with increased investment in its streaming services, are expected to weigh on its full-year performance.
In South Africa, MultiChoice South Africa reported negative subscriber growth and limited revenue increases in the interim results. The company warned that "very high levels of personal indebtedness" among consumers mean that even positive developments, like lower interest rates or a stable rand against the dollar, will take time to boost disposable income materially.
Despite returning to a positive equity position, MultiChoice said that "capital preservation remains a key consideration in the current environment."
The company also signaled that any dividend from MCSA for the 2025 financial year, to be decided by its board in June, "is likely to be significantly lower than prior years," potentially disappointing shareholders of its Phuthuma Nathi empowerment scheme.
MultiChoice operates across multiple African markets, where severe currency depreciation has added further complexity to its operations.
The proposed acquisition of MultiChoice by Canal+, a French media giant, remains in progress but faces delays due to regulatory hurdles in South Africa. Canal+ has offered to buy the MultiChoice shares it does not already own for R125 per share in cash, valuing the deal at approximately $2.9 billion (R54 billion).
MultiChoice's share price closed 0.81% lower at R110.60 on Friday on the JSE.
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