MultiChoice Group, the parent company of MultiChoice Nigeria, has reported a 30.77 percent decrease in subscription revenue from Nigeria in its full financial year ending March 2024. Revenue fell to $341.72 million (6.3 billion rands at 18.44 rands to a dollar) from $493.59 million (9.1 billion rands) the previous year, despite two price increases.
The company attributed this decline to a combination of factors, including the weakening of the naira, record-high inflation, which has exceeded 33 percent, and increased fuel costs.
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“Higher fuel costs in local currency also hurting consumers. Power interruptions of 16 hrs /day. Official rate weakened 50 percent year-on-year versus the dollar, and liquidity remains tight, “parallel rate” closed ~N1600 vs. ~N1308 official rate,” it said.
These economic headwinds led to an overall active subscriber decline of 9 percent, mainly due to a 13 percent decline in its rest of Africa business, with Nigeria, Angola, and Zambia most affected.
To counter the foreign exchange pressure caused by the naira’s depreciation against the dollar, MultiChoice implemented price hikes in April and November, averaging a 40 percent increase over the year. However, these measures did not offset the negative impacts on revenue, resulting in a $249.51 million foreign exchange loss for MultiChoice Nigeria.
“The sharp NGN depreciation against the USD gave rise to ZAR4.6bn in foreign exchange losses on the nonquasi equity loan (intercompany) with MultiChoice Nigeria,” it stated.
The company’s overall revenue also fell by 5 percent to $3.04 billion (56 billion rands), mainly due to a 7 percent fall in subscription revenues caused by a weaker naira. The group’s trading profit declined by 21 percent to $428.50 million (7.9 billion rands).
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“The business in the Rest of Africa faced the toughest macro-economic conditions in its core markets with high, double-digit inflation and extreme depreciation of local currencies (especially in Nigeria, Angola, Kenya, and Zambia), which impacted USD revenues by 32 percent. The active subscriber base declined to 8.1 million, but effective retention efforts contributed to an improved subscriber mix,” it said.
In addition to its financial struggles, MultiChoice Nigeria is currently embroiled in a court case over its recent price increases in Nigeria. The Competition and Consumer Protection Tribunal recently ordered the Pay TV operator to provide Nigerians with one-month free DStv and GOtv subscriptions.
Also, the operator was fined N150 million for challenging the jurisdiction of a court sitting in Abuja, which had restrained it from increasing its subscription prices. MultiChoice has since “disagreed with the ruling and will therefore file an appeal against said ruling.”
