MultiChoice delivers strong result in face of pandemic

South African pay TV operator MultiChoice has delivered robust results for the year to March, with strong subscriber growth and increased profits.

The group said that its 90-day active linear pay TV subscriber base grew by 1.4 million over the year to 20.9 million, with South African accounting for 8.9 million and the rest of Africa for 11.9 million.

South Africa added 500,000 pay TV subs over the year, representing growth of 6%. The group said that its Showmax and DStv app-based streaming service saw growth, but did not break out numbers.

In the rest of Africa, the subscriber base grew by 8%, or 800,000, with increased rainfall delivering improved electricity supply in Zambia and Zimbabwe.

The pay TV sub growth represented a 7% increase in the overall base, driven, said the operator, by heightened demand, growing penetration and an easing of electricity shortages in southern Africa.

Revenue grew by 4% to ZAR53.4 billion (€3.2 billion), with cost control measures and a reduction in trading losses in the rest of Africa segment of ZAR1.5 billion contributing to a 28% increase in trading profit to ZAR10.3 billion.

However, the company admitted that advertising and commercial subscription revenues had been hit by the pandemic, with ad revenues down 34% in the first half of the financial year, recovering in the second half to end 11% down for the full year. Commercial subscription revenues dropped by 35% for the full year.

Overall revenue in South Africa grew by only 1%, but profitability was increased due to the non-recurrence of sports events that helped the operator cut costs.

Core earnings increased by 32% to ZAR3.3 billion, with free cash-flow up 10% to ZAR5.7 billion.

MultiChoice said ti produced 19% more content last year despite various restrictions introduced during the COVID-19 pandemic. Its total content library now amounts to some 62,000 hours. Forty-two per cent of general entertainment spend was on local content, with a target of upping this to 45% next year. The company launched 11 local language channels across Africa last year.

Technology unit Irdeto also saw growth, with revenue up % to ZAR1.8 billion.

“The COVID-19 pandemic taught us more about the art of the possible. We started the year confronted with severe disruptions to our programming schedules, bleak macro-economic forecasts for many of our markets and sharply weaker currencies. In the face of these challenges, our teams rallied together – this helped us deliver on all our key performance metrics and provide more value to our shareholders by declaring a R2.5bn dividend,” said Calvo Mawela, CEO.