South African pay television company MultiChoice Group (MCGJ.J), opens new tab reported a 99% fall in half-year profit on Tuesday and described the operating environment as “extremely hostile”.
The owner of DStv, whose pay-TV business operates across 50 countries in sub-Saharan Africa, said its performance was marred by weaker local currencies and constrained consumer spending particularly in Nigeria and extreme power disruptions in Zambia.
Multichoice said its adjusted core headline earnings per share – its measure of the underlying performance – fell to 2 cents per share for the six months ended Sept. 30, down from 356 cents per share a year earlier.
Overall group revenue at Multichoice fell by 10% to 25.4 billion rand ($1.41 billion) on a reported basis but grew by 4% on an organic basis, which excludes the impact of foreign exchange effects and mergers and acquisitions.
Multichoice said subscriptions fell by 5% and 15% respectively in its South African and Rest of Africa operations.
It said profit was further hit by incremental investments in streaming platform Showmax, which Multichoice is prioritising to fight off competition from streaming giants Netflix (NFLX.O), opens new tab, Amazon (AMZN.O), opens new tab and Disney (DIS.N), opens new tab.
“Stripping out Showmax, the group would have seen reported trading profit increase by 28% on an organic basis,” said Multichoice, whose shares were down 0.3% at 1212 GMT.