MultiChoice, the parent company of DStv, has cautioned shareholders about a significant decline in profit ahead of the release of its annual results for the 2022/2023 financial year. The broadcaster is in the final stages of preparing its results and has informed shareholders that it anticipates substantial drops in earnings and headline earnings per share.
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According to MultiChoice, earnings per share for FY23 are expected to be between R11.26 and R11.42 lower than the reported earnings per share of R3.18 for FY22. This translates to a loss of between R8.08 and R8.24 per share, resulting in a total loss exceeding R3.58 billion when considering all issued shares. Similarly, headline earnings per share are projected to decline by R6.71 and R6.90 from the reported figure of R3.81 in FY22. This represents a headline loss per share ranging from R2.90 to R3.09, leading to an overall headline loss between R1.28 billion and R1.37 billion.
MultiChoice attributes these declines to two main factors. Firstly, higher unrealized foreign exchange losses stemming from the sharp depreciation of the Rand against the US dollar have impacted the translation of the Group’s USD liabilities. Secondly, an increase in foreign exchange losses associated with cash repatriation from Nigeria at the parallel rate has contributed to the financial challenges.
While MultiChoice reported strong subscriber growth and the Rest of Africa business returned to profitability, the company faced difficulties in the South African market due to a challenging environment, increased investment in decoder subsidies, and marketing expenses for the 2022 FIFA World Cup. Additionally, earnings per share were affected by the impairment of the KingMakers Group, driven by increased discount rates in the broader gaming technology sector.
The MultiChoice board emphasizes trading profit and core headline earnings per share as the key performance indicators for the group, as these metrics account for non-recurring and non-operational items. The company expects trading profit to be 0% to 5% lower than the previous year, representing a decline of R500 million compared to the R10.3 billion in trading profit for the 2021/2022 year. This reduction factors in the costs associated with the Comcast partnership announced in March 2023.
MultiChoice will unveil its FY23 annual results on June 14, 2023.
