However, according to earnings and loss per share metrics, the company has managed to turn its business around somewhat, a sign of future growth in a difficult operating environment.
MultiChoice sees light, though small it may be
Unlike last year, MultiChoice says that positive earnings per share are expected in 2025 driven by urgent action from management to swing the company’s fortune around. This includes the sale of 60 percent of its holdings in NMS Insurance Services to Sanlam Life Insurance.
The company is forecasting an improvement of 128 to 132 percent for its earnings per share for the 2025 financial year, or around 262 to 299 cents per share, while its headline loss per share is smaller than last year, with an improvement of 62 percent to 66 percent.
Despite its bettering earnings per share, MultiChoice is forecasting another massive loss of around R3.88 billion to R4.2 billion in its report.
The combination of factors paints a bleak picture. The company is struggling to turn a profit but it is facing pressure from multiple angles with one of its biggest difficulties being Showmax. If MultiChoice was floating in the ocean, Showmax would be a massive rock tied to its ankle.
Investments in Showmax, which the company says “remains at an early stage of development and has yet to scale into its cost base” are partially responsible for driving this loss for MultiChoice. Streaming platforms often take several years before they begin turning a profit.
It took Disney+ five years before the platform became profitable, and the new Showmax is only on its second year currently. Unlike Disney, one of the largest media empires in the world, MultiChoice doesn’t have fathomless pockets.
Expanding on the drowning metaphor
But Showmax isn’t the only rock tied to the company’s ankles, as weaver average exchange rates across its operating markets and elevated inflation and interest rates haven’t helped.
“The current period has seen the continuation of unprecedented financial disruption for economies, corporates and consumers across sub-Saharan Africa due to several macro-economic factors, including weaker average exchange rates, elevated inflation and interest rates, and power supply challenges,” it said in the forecast.
Meanwhile increased competition from rival streaming platforms and the rise of piracy are crushing its subscriber base.
“Combined with the impact of structural industry changes in video entertainment, such as the rise of piracy, streaming services and social media, as well as the cost of investing in Showmax, this has materially affected the performance of the MultiChoice Group.”
It says it has “acted decisively to counter these headwinds by, focusing on key areas within its control such as maintaining inflationary pricing discipline, growing new revenue streams and driving further efficiencies to manage costs and cash flows.”
It’s going to be a tough few years for the DStv owner.
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