MultiChoice, owner if DStv Reports Record Losses, Becomes Technically Insolvent

MultiChoice, the owner of DStv, has disclosed a significant financial loss of R4.1 billion for the fiscal year ending March 31, 2024, leading to its technical insolvency.

On Wednesday, the South African pay-TV giant revealed a pre-tax loss of 706 million rand ($38 million) for the year, attributing this downturn to currency instability and reduced consumer spending.

The increasing debt burdens across many African countries and investor hesitancy towards African exports have strained foreign currency reserves, causing volatility.

This marks MultiChoice’s worst financial performance to date, with a 42% rise in losses compared to the previous year.

The company’s financial troubles are driven by a 9% drop in active subscribers and unfavorable exchange rates, resulting in a 5% net revenue decline to R56 billion and a 21% decrease in trading profit to R7.9 billion.

Subscriber numbers fell across all markets, impacting both the South African and Rest of Africa segments of the business.

Additionally, MultiChoice’s balance sheet reveals its technical insolvency, with total assets decreasing from R47.6 billion to R43.9 billion, while liabilities increased to approximately R45 billion.

With negative equity of R1.068 billion, MultiChoice would be unable to meet all its obligations if it had to liquidate its assets.

Despite the grim financial outlook, MultiChoice maintained an optimistic stance, describing its operational performance as “resilient” and indicating signs of a potential turnaround.

The company stated it is focusing on generating cash and has intensified its cost-reduction efforts, aiming to save R2 billion by the 2025 fiscal year.

“Clear strategic milestones were achieved, including the successful launch of Showmax 2.0, SuperSportBet, and Moment,” MultiChoice noted. “These initiatives are now generating revenue and supporting the group’s future growth.”

CEO Calvo Mawela highlighted that, four years after setting a clear strategy to become Africa’s leading entertainment platform and investing in services to support a broader ecosystem, the company’s three core segments—video entertainment, interactive entertainment, and fintech—are now fully operational.

“Our focus now shifts to building on these solid foundations to drive growth in these new areas and further enhance business efficiency across our operations,” the company said. “The group will continue efforts to drive growth in key areas, notably Showmax, Moment, SuperSportBet, DStv Insurance, DStv Internet, and DStv Stream.”

MultiChoice is also committed to retaining its DStv and GOtv customers and supporting their engagement levels through the upcoming financial year.