MultiChoice has released a statement regarding a significant decrease in its trading profit for the financial year ending March 31, 2025, anticipating a 50% reduction.
Profit Decline Forecast
MultiChoice expects a 50% decrease in trading profit for the current financial year. The main reasons include macroeconomic pressures, rampant piracy, and intense competition from global streaming platforms, alongside substantial investments in its streaming service Showmax.
Impact of Macroeconomic Factors
Profitability is further impacted by foreign exchange volatility in key markets across sub-Saharan African countries. Currency depreciation in nations such as Nigeria and Kenya has significantly affected financial results, with MultiChoice reporting a loss of $217 million in 2024 attributed to currency devaluation, primarily from Nigeria.
Company's Strategy and Future
Despite bleak profit Outlook, MultiChoice anticipates a recovery in earnings-per-share metrics for 2025 linked to corporate actions including the sale of a 60% stake in NMS Insurance Services. The company is undertaking cost-saving measures and focusing on new revenue streams. However, its subscriber base has diminished from 23 million to 19.3 million in less than two years, with efforts ongoing to adapt to economic realities.
Overall, the financial and market situation presents significant challenges for MultiChoice. Yet the company remains focused on finding paths for adaptation and growth while maintaining optimism regarding its liquidity.
