By Ronald Adamolekun
South Africa’s cable television operator MultiChoice Group reported a more-than-double surge in net loss for the six months through September as its operations faced multiple headwinds.
Subscription fees, which account for 81.6% of the pay TV provider’s revenue, faced tremendous strain during the period, with as many as 243,000 Nigerian and 298,000 Zambian subscribers ditching the company’s services.
That laid the foundation for an 11% decline in turnover to R24.8-billion, compared to a year ago, according to MultiChoice’s interim earnings report issued on Tuesday.
Apart from inflationary pressures, MultiChoice operations in Nigeria were further strained by exchange rate volatility as the local currency shed a great deal of its value against the dollar.
The significant slide in the value of the naira largely caused a spike in MultiChoice’s foreign exchange losses on a USD-denominated intergroup loan. The FX loss stood at R2.1-billion.
Recent years have been particularly challenging for South African businesses in Nigeria as the operating environment turned harsher.
MTN Nigeria, reported a net loss of N904.9-billion in the nine months to September on the back of steep currency devaluation in the country in January.
Shoprite, announced its exit from Nigeria in 2020, later selling the business to a group of domestic investors after opting for a franchise model.
Last month, another grocery retailer, Pick n Pay, announced its exit plan as it proposes to sell its 51% stake in a joint venture with AG Leventis. Pick n Pay said the move is part of its strategy to restructure its operations outside its home market.
