Multichoice Group said its operations in the Rest of Africa (RoA) led by Nigeria recorded its first trading profit in the financial year that ended March 31, 2023, on the back of the price increment it implemented in April last year.
According to the company’s full-year financial statement just released, the Rest of Africa’s business generated a positive trading profit of ZAR0.9bn, representing a 4% trading profit margin and a ZAR2.8bn organic improvement from the prior year. Multichoice said this came as the first positive trading profit recorded since the group was listed in 2019.
Aside from the price increment, Multichoice said the strong performance was also boosted by decoder subsidy and marketing investments for the FIFA World Cup. Outside its home country, South Africa, the group said its overall subscriber base was also boosted by the Rest of Africa.
The group added 1.7 million 90-day active subscribers, representing 8% year-on-year growth, to close the year with 23.5 million subscribers. The 90-day subscriber base comprised 14.2 million households (60%) in the Rest of Africa and 9.3 million households (40%) in South Africa.
In what has now become an annual ritual, Multichoice implemented another price increment in Nigeria and other operating units in May this year.
Exceptional performance
Describing the growth recorded by the RoA as exceptional as its South African operation was unimpressive in the year, Multichoice stated:
- “The strong performance in the Rest of Africa, which added 1.4m 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. This together with annual price increases resulted in the Rest of Africa delivering positive trading profit for the first time since the group was listed in 2019. This is 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. 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 0.3m YoY, lower levels of activity, represented by active days, were experienced which resulted in a 2% decline in SA revenue.”
Nigeria as the driving force
While the RoA subscription revenue grew by 16% to ZAR20.4 billion in the period under review, Multichoice Nigeria accounted for 44% as it was able to grow its subscription revenue by 29% from N177.5 billion (ZAR7.1 billion) in 2022 to N227.1 billion (ZAR9.1 billion) in 2023.
According to Multichoice, the performance from the Nigerian operation was also boosted by the hosting of the company’s annual TV game show, Big Brother Naija, which usually attracts millions of Nigerian youths. It added that the Rest of Africa’s revenues now contributes 38% to overall group revenues, up from 33% in the prior year.
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