MultiChoice reveals revenue dip

African broadcasting giant MultiChoice Group (MCG) has revealed that revenue fell by 1% to ZAR28.3bn (US$1.54bn) during the six months ending September 30 this year, as the group battled local and global economic headwinds.

MCG said that factors contributing to the slight fall in profitability included the ongoing South African load-shedding energy crisis, cost of living pressures and sharp depreciation in local currencies against the local dollar.

However, the group maintained a trading profit margin of 3% in the rest of Africa (ROA) – a ZAR2.2bn improvement year on year – and delivered a 31% trading margin in South Africa.

Group trading profit increased 18% on an organic and like-for-like basis, though that drops to a 10% improvement when MSG’s recent investment in its streamer Showmax is considered.

Active in 50 markets across sub-Saharan Africa, the company operates dozens of channels and entertainment platforms, including pay TV service M-Net, the DStv satellite offering and Showmax.

Subscription revenues were reported as 3% higher, attributed to strong growth in ROA (+14%) and Showmax (+25%), offset by pressure on the South African business.

MCG increased its spending on local content by 16% year on year, boosting its library to almost 80,000 hours with new series such as M-Net series launch 1802: Love Defies time, and Shaka iLembe on Mzansi Magic.

The investment in local programming drove up content costs by 10%. MCG’s SuperSport service performed strongly after broadcasting the Rugby World Cup, Netball World Cup and FIFA Women’s World Cup.

Calvo Mawela, group CEO said: “We delivered a resilient performance in a challenging macro and consumer environment by implementing various initiatives to protect the economics of the business.

“We remain focused on developing our leading entertainment platform that caters for consumer needs across sub-Saharan Africa, on leveraging our footprint to build a differentiated ecosystem and on developing additional revenue streams.”