MultiChoice repatriates $235m at N684/$ from Nigeria

MultiChoice said despite the liquidity constraints in Nigeria, the group managed to extract $235 million at an average rate of N684/$ from the country.

Given that the moving average (MA) of the official exchange rate in the period covered was less than N500/$, the group might have sourced FX from the parallel market for repatriation, though the detail of the sources was not captured by the financial statement.

The firm revealed this in its consolidated yearly financial statement for the year ended March 31, 2023. It said MultiChoice Group continued to ramp up its overall subscriber base, primarily through a strong performance in the rest of Africa.

In the report, the group added 1.7 million 90-day active subscribers, representing eight per cent year-on-year (YoY) growth, to close the year at 23.5 million subscribers.

MultiChoice said the 90-day subscriber base comprised 14.2 million households (60 per cent) in the Rest of Africa and 9.3 million households (40 per cent) in South Africa.

According to it, the strong performance in the Rest of Africa, which added 1.4 million subscribers, was underpinned by the decoder subsidy and marketing investments for the FIFA World Cup, which will be fully paid back by the end of 1H FY24.

It said, this together with yearly price increases resulted in the Rest of Africa delivering positive trading profit for the first time since the group listed in 2019. Indeed, in Nigeria, MultiChoice announced an upward review of the costs of its DStv and GOtv packages by 17 per cent, in text messages sent to subscribers.

The new rates, which took take effect from May 1, 2023, the firm had hinged the tariff hike on the rising costs of business operations in the country. The 2023 hike came barely a year, when the prices were reviewed upward by the firm.

Further, in the financial report, MultiChoice described it as an exceptional performance from the Rest of Africa team as it was achieved despite absorbing more than ZAR2.9 billion in currency losses in the last four financial years. In contrast, the South African consumer environment weakened sharply, especially in the second half of the financial year.

MultiChoice explained that permanent high stages of load shedding, interest rate hikes and elevated inflation levels have left a large portion of the group’s customer base unable to watch or afford video entertainment services. Although SA 90-day subscribers grew by 0.3 million YoY, lower levels of activity, represented by active days, were experienced, which resulted in a two per cent decline in SA revenue.

Driven by its commitment to local storytelling, the broader MultiChoice Group invested in local content, empowering African talent and fostering a thriving creative industry. In its financial year 2023, local content accounted for 50 per cent of the Group’s total general entertainment spend, surpassing this target one year earlier than expected. The group’s local content library now boasts over 76,000 hours, with local content production delivering a nine per cent year-on-year increase to 6,587 hours.

The firm noted that the overall macroeconomic environment remains volatile, stressing that major currency movements on average against the USD were the Ghanaian cedi -71 per cent; the Angolan kwanza +21 per cent, while the Nigerian Naira depreciated six per cent late in the financial year. It noted that the Rest of Africa business returned to profitability, generating positive trading profit of ZAR0.9 billion, representing a four per cent trading profit margin. This significant improvement in organic performance was supported by 26 per cent revenue growth (16 per cent organic) and ongoing cost optimization.

According to the firm, despite challenging market conditions, MultiChoice Africa’s unwavering dedication to telling African stories and its ongoing investment in local content has been a driving force behind its success in a highly competitive sector. It has demonstrated its commitment to growing, amplifying and multiplying Africa through the power of entertainment, the power of its stakeholders and the power of its people, evident through this promising set of results.

Chief Executive Officer of MultiChoice Africa, Fhulufhelo Badugela, said: “Our industry has faced numerous challenges in recent times. However, we have risen above these challenges, leveraging our strengths to overcome them, and that is something we take great pride in.”