Boost in subscribers pushes MultiChoice Group interim earnings up by a solid 41%
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DURBAN – The MultiChoice Group interim earnings jumped by 41 percent, boosted by 1.2 million 90-day active subscribers year on year.
At the end of September, the group yesterday reported 20.1 million households and exceeded the 20 million subscriber milestone for the first time.
As a result, for the six months to September its core headline earnings increased by 41 percent to R2.7 billion and trading profit rose by 19 percent to R5.7bn, benefiting from a R500 million reduction in losses in the Rest of Africa operations and a resilient performance in South Africa.
MultiChoice said the trading profit impact of Covid-19 was largely neutral, as the R900m revenue loss was offset by R800m in delayed content costs. Chief executive Calvo Mawela said despite operating in a challenging environment and being affected by lockdowns, production stoppages and disruptions to live sport, they delivered on all key metrics.
“A strong focus on cost reduction allowed for a further R1bn in cost savings during the period. We also narrowed the losses in the Rest of Africa by 59 percent year on year (or R500m) to R338m,” Mawela said.
MultiChoice ’s revenue increased by 2 percent to R26.1bn, with subscription revenues up by 5 percent year on year to R22.2bn.
However, the group said top line momentum was significantly impacted by Covid-19 as advertising revenue declined by R600m year on year, mainly due to a lack of sports advertising and a generally softer advertising market resulting from lower economic activity.
Its commercial subscription revenues were R300m lower as a result of most hotels, restaurants and other commercial customers remaining closed during lockdowns. The group said, excluding the impact of Covid-19, commercial revenue would have increased by 6 percent year on year.
In the South African business, the group reported subscriber growth of 7 percent year on year, or 500 000 subscribers on a 90-day active basis.
South African revenue declined by 3 percent to R16.5bn, affected by the lower advertising and commercial subscriber revenues but trading profit increased by 12 percent to R5.8bn.
In the Rest of Africa operations, the business grew its 90-day active subscriber base by 6 percent, or by 600 000 subscribers. Its revenue increased by 11 percent to R8.7bn and trading losses narrowed by 59 percent to R400m.
Irdeto, the group’s technology segment, contributed R900m to group revenues, a decrease of 1 percent year on year impacted by the deferral of certain project revenues due to Covid-19, as well as the non-recurrence of $8m in once-off revenues in the prior period.
MultiChoice shares closed 0.14 percent lower at R124.74 on the JSE on Thursday.