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Multichoice incurs $190.5 million forex loss from Nigerian operation in 2024 

Pan-African Pay-tv operator, Multichoice, has notified its shareholders of grim full-year results citing tough macroeconomic conditions and a $190.5 million (R3.6 billion) foreign exchange loss from Multichoice Nigeria.  

The Group disclosed this in a trading statement published on Thursday.

The company’s financial result for the year ended March 31, 2024, is expected to be published on 12 June.  

Multichoice, which is in the middle of an acquisition by France’s Groupe Canal+, said it anticipates a trading profit decline of between 19% and 23% compared to the 2023 financial year, while the headline loss per share number will more than double. 

The release of the trading statement is in compliance with the Johannesburg Stock Exchange rules that require companies to provide a trading statement as soon as they are satisfied the current reporting period will differ by at least 20% from the financial results of the previous corresponding period. 

Expected losses 

While disclosing that the group’s expected loss per share has also been impacted by a once-off impairment of IT systems of R1 billion, Multichoice said, 

“The group expects losses and headline losses per share to increase due to the negative impact of a weak macroeconomic and consumer environment, increased investment in Showmax, and the impact of the sharp depreciation in the Nigerian naira against the US dollar. This resulted in foreign exchange losses on the non-quasi intergroup loans with MultiChoice Nigeria of R3.6-billion (net of tax and non-controlling interest).” 

“The group’s expected loss per share has also been impacted by a once-off impairment of IT systems of R1-billion (net of tax and non-controlling interest), due to a reassessment of business needs in the context of an extremely challenging operating environment,” it added.  

An additional trading loss year over year of R1.4-billion is expected at Showmax according to the company.  

However, despite the adverse conditions and an additional R1.4 billion year-on-year increase in Showmax trading losses, the group projects an increase in organic trading profit due to inflation-led pricing and successful cost optimisation across most of its markets.  

More insights on Multichoice Nigeria 

Citing economic challenges, Multichoice Nigeria had In April increased the prices of DStv and GOtv packages by at least 25%.  This marks the third increment since last year, following the initial adjustment implemented on May 1, 2023. 

Ahead of the implementation of the new prices on May 1, a Competition and Consumer Protection Tribunal (CCPT) sitting in Abuja issued an order restraining from implementing the new prices based on a case filed by a Nigerian customer of the company. 

However, Multichoice ignored the court order and implemented the new prices. This prompted the Tribunal to slam a fine of N150 million on Multichoice for challenging the jurisdiction of the court. 

The verdict delivered by three of the panel led by Thomas Okosu on Friday also ordered Multichoice to give Nigerians a one-month free subscription on DSTV and GOTV. Multichoice has yet to respond to the verdict as of the time of filing this report.  


Source: TheTimes.com.ng.

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