MultiChoice expects drop in profit and earnings

South Africa’s MultiChoice expects its full-year profits for the year ending March 31 to be up to ZAR500 million down on last year’s figure as the country’s economic woes, increased investment in decoder subsidies ahead of the World Cup and costs related to its Comcast partnership take their toll.

In a trading statement ahead of its full-year numbers, Multchoice said that trading profit would be between zero and 5%, or ZAR500 million, loser than the ZAR10.3 billion it recorded last year.

The number includes costs associated with its partnership with Comcast to develop a common streaming offering. On an organic basis, profit is expected to be between 3% and 8% higher.

MultiChoice said its full-year performance benefited from strong subscriber growth, the rest-of-Africa segment returning to profitability and cost savings exceeding targets.

MultiChoice said it expects core headline earnings per share for FY23 to be between 0% and 4% (33 ZAR cents) higher than the FY22 reported 814 ZAR cents. However, earnings per share and headline earnings per share are expected to drop due to foreign exchange losses and a 100% impairment charge on the value of gaming technology outfit KingMakers Group.

MultiChoice announced in March that it was teaming up ith Comcast’s NBC Universal and Sky to form a new Showmax group which will deliver content to streaming customers across MultiChoice’s 50-market footprint in sub-Saharan Africa.

The companies said the new partnership is designed to create a leading streaming service in Africa which comes at a time when the continent is approaching an inflection point in terms of broadband connectivity and affordability.

The new Showmax group will be 70% owned by MultiChoice and 30% by NBCUniversal, however in Nigeria NBCUniversal will hold an indirect 23.7% stake.