Multichoice Group says it is maintaining “strategic momentum”, despite macroeconomic challenges that have led to a 5% drop in its subscriber base.
The Johannesburg-based company says it’s on-track to develop the “right-size” cost base and grow new revenue streams to drive future growth as streaming continues to gain ground at the expense of traditional pay-TV services.
Multichoice’s own streaming service Showmax grew its customer base by 50% year-on-year following cash boost of ZAR1.6 billion.
However, over the last year subscriber numbers to Multichoice’s regular pay-TV services have fallen by 1.8 million subscribers to 14.9 million active subscribers.
Abnormal currency weakness over the past 18 months have reduced the Multichoice Group profits by close to R7 billion. Subsequently it accelerated its cost savings program to R1.3bn over the past six months and an increased target of ZAR2.5bn for the full year.
“We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year. We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives. The Group’s liquidity position remains strong, with over ZAR10bn in total available funds,” says Calvo Mawela, MultiChoice Group CEO.
We remain committed to driving new revenue streams and see significant medium to long-term opportunities in video entertainment, particularly in streaming, and in our adjacent new businesses,” says Mawela
