MultiChoice Group, the parent company of MultiChoice Nigeria, reported a 30.77 percent decline in subscriber revenue from Nigeria for the fiscal year ending March 2024. Despite two price hikes, revenue fell to $341.72 million (6.3 billion rands at 18.44 rands to the dollar), down from $493.59 million (9.1 billion rands) the previous year.
The firm ascribed the loss to a number of causes, including the depreciation of the naira, record-high inflation that has surpassed 33%, and rising gasoline expenses, according to Businessday.
It said “Higher fuel costs in local currency also hurting consumers. Power interruptions of 16 hrs /day. Official rate weakened 50 percent year-on-year versus the dollar, and liquidity remains tight, “parallel rate” closed ~N1600 vs. ~N1308 official rate,”
These economic headwinds resulted in a 9 percent loss in overall active subscribers, owing mostly to a 13 percent decline in its rest of Africa business, with Nigeria, Angola, and Zambia being the most affected.
To offset the foreign exchange pressure caused by the naira’s depreciation versus the dollar, MultiChoice raised prices in April and November, averaging a 40% rise for the year. However, these steps did not compensate for the negative effects on income, resulting in a $249.51 million foreign exchange loss for MultiChoice Nigeria.
“The sharp NGN depreciation against the USD gave rise to ZAR4.6bn in foreign exchange losses on the nonquasi equity loan (intercompany) with MultiChoice Nigeria,” it stated.
The company’s overall revenue declined by 5% to $3.04 billion (56 billion rands), owing primarily to a 7% drop in subscription sales driven by the weaker naira. The group’s trading profit fell by 21% to $428.50 million (7.9 billion rand).
“The business in the Rest of Africa faced the toughest macro-economic conditions in its core markets with high, double-digit inflation and extreme depreciation of local currencies (especially in Nigeria, Angola, Kenya, and Zambia), which impacted USD revenues by 32 percent. The active subscriber base declined to 8.1 million, but effective retention efforts contributed to an improved subscriber mix,” it said.
In addition to its financial difficulties, MultiChoice Nigeria is currently entangled in a legal dispute over recent pricing rises in Nigeria. The Competition and Consumer Protection Tribunal has ordered the Pay TV provider to give Nigerians a one-month free DStv and GOtv subscription.
