MultiChoice Trading Profit Slumps 50% Amid Forex Pressures, Streaming Competition

MultiChoice has issued a warning to investors of a sharp drop in its financial performance, reporting a 50% decline in trading profit for the fiscal year ending March 31, 2025.

The company attributes the downturn to several structural challenges, including widespread piracy, heightened competition from global streaming platforms, and persistent macroeconomic headwinds. Substantial investment in its streaming platform, Showmax, has also weighed on the balance sheet.

Foreign exchange volatility has had a particularly severe impact. The company notes significant currency depreciation across key sub-Saharan African markets, including Nigeria, Kenya, Zambia, and Angola. This has materially eroded earnings when converted to South African rand.

MultiChoice disclosed that in 2024 alone, currency devaluation resulted in a $217 million (ZAR4.3 billion) loss. Nigeria led these losses, with the naira depreciating by 50%. Even excluding foreign exchange effects, the company expects a 7%–11% drop in organic trading profit, suggesting deeper operational inefficiencies.

Despite these pressures, there is a projected turnaround in profitability. The company expects to return to profit this year, following a loss of R9.35 per share last year. This anticipated recovery, however, will be driven primarily by corporate actions rather than operational improvements. Key among them is the November 2024 sale of a 60% stake in NMS Insurance Services to Sanlam and a reassessment that reduced Showmax-related liabilities.

Headline earnings per share are expected to improve significantly, with analysts projecting an increase of up to 66%. MultiChoice, however, cautions that these improvements are not reflective of core business strength.

The company characterises the current landscape as one of “unprecedented financial disruption.” Broader macroeconomic pressures—unstable power supplies, inflation, currency instability, and rising interest rates—are also affecting customer behaviour and spending.

Consumer belt-tightening has led to widespread downgrades or cancellations of pay-TV subscriptions. MultiChoice has seen its subscriber base shrink from nearly 23 million to 19.3 million in less than two years. South Africa now has only 7.6 million active households, a 5% year-on-year decline. Outside South Africa, the company lost over 800,000 subscribers, with Nigeria and Zambia seeing the steepest drop-offs.

Industry dynamics are also rapidly shifting. Piracy is on the rise. Traditional television is losing viewers to global streaming giants like Netflix and Disney+, while social media is further reshaping content consumption habits.

MultiChoice’s flagship offering, DStv, is under strain. Premium subscriptions declined by 8%, and the mid-tier Compact package dropped by 9%.

The company faces serious structural and strategic challenges. How MultiChoice responds in the coming months could be pivotal to its long-term future.