MultiChoice broadcasting group shareholders will on Tuesday receive bad news from South Africa’s pay TV in Africa operator.
Shareholders have been told to prepare for the worst as the company notified them that it would release cold financial results.
The company released the statement on Thursday to its shareholders, saying it was finalising its consolidated annual financial statements for the year ended March 31 2023.
According to MultiChoice, financial year 2023’s financial performance benefited from strong subscriber growth, with its “rest of Africa” continental subscription returning to profitability, and cost savings from the group’s established cost optimisation programme exceeding targets.
However, the broadcaster’s gains were hampered by increased investment in decoder subsidies, marketing costs related to the 2022 Fifa World Cup and South Africa’s tough economic challenges.
The board of directors had considered trading profit and core headline earnings per share as the two most appropriate indicators of the groups’ operating performance, as they adjusted for non-recurring and non-operational items.
In the statement, the company stated that trading profit is expected to be between 0% and 5%, which will be R0.5-billion, which is a significant drop compared to the R10.3-billion reported for the year ended March 31 2022, and which included costs associated with the Comcast partnership announced towards the end of the 2023 financial year.
Comcast is a streaming service broadcaster which partnered with MultiChoice in March this year to create a mega streaming service in Africa.
MultiChoice earnings per share were also impacted by the weakening of Nigeria’s KingMakers Group, Africa’s leading sports and digital entertainment platform, which is now valued at R8.9-billion.
The weakness was driven by increases in discount rates in both the broader gaming technology sector and Nigeria in particular, and a more negative Nigerian naira currency outlook.
The company said it expected its earnings per share for financial year 2023 to be between 1,126 cents and 1,142 cents lower than the 2022 reported earnings per share of 318 cents.
“On an organic basis reflecting results on a constant currency basis and excluding mergers and acquisitions trading, profit is expected to be between 3%, which is R0.3-billion, and 8%, which is R0.8-billion higher than the FY22 reported R10.3-billion. Headline earnings per share for FY23 is expected to be between 671 cents and 690 cents lower than the FY22 reported headline earnings per share of 381 cents.”
The conclusive consolidated annual financial statements will be released on Tuesday.
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