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In a sign of difficulties, South African television giant MultiChoice lost 9% of its subscribers, bringing its total to 15.7 million African subscribers (1.74 million fewer than the previous year), mainly in Nigeria, Angola and Zambia, as disclosed in its June 12 results, as it faces a takeover bid by its main shareholder Canal+.
The group recorded a pre-tax loss of 706 million rand (35.5 million euros) in the year ended March, citing exchange rates and low consumption as factors. South Africa has had 275 days of electricity cuts, discouraging would-be subscribers without backup power sources.
“Volatility and weakening of local currencies, electricity issues in markets such as South Africa and low consumption due to inflation and high interest rates have created an extremely difficult environment,” MultiChoice explained in its financial statement.
This loss follows a pre-tax profit of R921 million recorded the previous year. Group revenues also fell by 5% to R56 billion, but the company stated that without currency fluctuations they would have increased by 3%.
Cost Reduction
Africa's largest pay TV company declared that it would accelerate its cost reductions, prioritize customer loyalty, take advantage of sports renewals and continue to develop its local content.
Clear strategic steps have been taken to build “Africa’s entertainment platform of choice”, including the successful launch of Showmax 2.0, SuperSportBet and Moment, which “generate revenue and support growth prospects”, highlighted CEO Calvo Mawela in the communicated.
In April, Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bolloré, which holds more than 35% of MultiChoice's capital, announced that it had made a mandatory offer to acquire all the remaining shares. With a previously rejected offer, he proposed R125 per share, an amount considered “fair and reasonable” by an independent expert appointed by MultiChoice’s board of directors.
Canal+ is present in Africa in 25 countries through 16 subsidiaries, with 8 million subscribers, according to data from the French group. Its position as main shareholder of the South African giant allowed it to consolidate its presence in English-speaking and Portuguese-speaking Africa.
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