by Thinus Ferreira
MultiChoice is warning the market and investors that its interim profits will be less for the six months until the end of September 2022, negatively impacted by things like spending R700 million more on DStv decoder subsidies for the 2022 FIFA World Cup, the weakening of the rand against the American dollar, and struggling with foreign exchange losses trying to get cash out of Nigeria.
In a trading statement on Monday, MultiChoice that will publish its interim financial results this Thursday 10 November, warned that while MultiChoice is seeing ongoing DStv subscriber growth, it will see lower earnings per share during the period of 1 April to 30 September 2022.
While MultiChoice previously reported earnings per share of R3.17, it now expects it to be between R3.71 and R3.87 lower, meaning a MultiChoice net loss.
"The financial performance for the current period benefited from continued subscriber growth, an ongoing reduction in Rest of Africa (ROA) trading losses and further savings generated from the group's established cost optimisation programme," MultiChoice said in the trading statement.
"This was however tempered by a R700 million increase in decoder subsidies ahead of the upcoming 2022 FIFA World Cup."
"The reduction in earnings and headline earnings per share is primarily due to higher unrealised foreign exchange losses on the translation of the group's USD liabilities (including transponder leases) stemming from the sharp depreciation in the ZAR against the USD towards the end of the current period."
"This is further impacted by an increase in foreign exchange losses associated with the repatriation of cash from Nigeria at the parallel rate – these exchange losses are considered to be of a temporary nature."
"Compared to the prior period, the group expects earnings per share for the current period to be between R3.71 and R3.87 lower than the prior period's reported earnings per share of R3.17. Headline earnings per share for the current period is expected to be between R4.06 and R4.20 lower than the prior period's reported headline earnings per share of 356 ZAR cents," MultiChoice said.
