Reports indicate that South Africa’s TV giant MultiChoice posted a pretax loss of 706 million rand which is equivalent to $38 million for the year.
This was made known by the company on Wednesday citing weak local currencies and a drop in their subscribers.
“Volatile and weaker local currencies, power challenges in markets like South Africa, and a weak consumer environment due to rising inflation and high interest rates have created an extremely challenging environment,” MultiChoice said.
The company is said to be the subject of a takeover by France’s Canal+ that holds more than 35% of MultiChoice’s shares.
The loss reported comes after Multichoice reported a 921 million rand profit before taxes reported the year before.
The loss according to Multichoice was compounded by a nine per cent decline in subscriptions.
Business in South Africa has suffered with intermittent power cuts some going as far as 275 days. This is said to have discourged subscribers without backup power from subscribing.
Group revenue is said to have also been down y five percent to 56 billion rand but Multichoice explains that if not for currency swings the loss would have been up three percent.
Africa’s largest pay-TV enterprise said it would accelerate a cost-saving programme, prioritise customer retention, leverage sports renewals and further develop local content.
Its Showmax video streaming business, which re-launched in February, was showing “encouraging early traction” with the paying subscriber base growing by 16 per cent, the company said.
In April, Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, made a firm offer to acquire all MultiChoice shares it does not currently own.
Upping an earlier rejected bid, it offered 125 rand per share, an amount deemed “fair and reasonable” by an independent board appointed by the South African firm.
Canal+ is present in 25 African countries through 16 subsidiaries, and has eight million subscribers, according to the French group.
Its stake in MultiChoice, Africa’s largest pay-TV enterprise, has allowed it to gain a foothold in English-speaking and Portuguese-speaking nations across the continent.