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MultiChoice Reports FY24 Losses: ZAR 815 Cents per Share, Trading Profit Declines 19% | Rateweb
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MultiChoice Reports FY24 Losses: ZAR 815 Cents per Share, Trading Profit Declines 19%

MultiChoice Group Limited has released a trading statement for the fiscal year ended March 31, 2024. The group anticipates a significant decline in its financial performance due to various economic pressures.

Key Financial Metrics

MultiChoice’s financial results for FY24 show considerable changes compared to FY23. The following table highlights key metrics:

MetricFY23 FigureFY24 Expected Movement RangeFY24 Expected % Increase/Decrease
Loss per share (ZAR cents)(815)+(106) to +(139)-13% to -17%
Headline loss per share (ZAR cents)(301)+(409) to +(421)-136% to -140%
Trading profit (reported) (ZAR bn)10.0-1.9 to -2.3-19% to -23%
Trading profit (organic) (ZAR bn)10.0+2.2 to +2.6+22% to +26%
Core headline earnings/share (ZAR)828-298 to -331-36% to -40%
Adjusted core headline earnings/share388-70 to -85-18% to -22%

Increased Losses Amid Adverse Conditions

The group expects losses and headline losses per share to rise. MultiChoice attributes this to a challenging economic environment and increased investment in Showmax.

The depreciation of the Nigerian naira against the US dollar has also impacted results. The company reports foreign exchange losses of ZAR3.6 billion due to non-quasi intergroup loans with MultiChoice Nigeria.

Cost Optimization and Cash Management

Despite these challenges, MultiChoice has implemented several strategic interventions. The focus has been on cost optimization and cash management. These efforts have included reduced decoder subsidies, which have yielded positive outcomes.

Organic Trading Profit Growth

On an organic basis, the group expects trading profit to increase year-over-year. This increase is driven by inflation-led pricing and cost optimization. However, reported trading profit is expected to be lower due to a ZAR4.5 billion foreign exchange impact.

Impact of Showmax Investments

The group notes an additional ZAR1.4 billion in Showmax trading losses year-over-year. Despite this, organic trading profit, excluding Showmax, is expected to increase by 36% to 40%.

Decline in Core Headline Earnings

Core headline earnings per share are expected to decline by 36% to 40% compared to FY23. Adjusted core headline earnings per share, which accounts for losses on cash remittances, are expected to decrease by 18% to 22%.

Non-IFRS Measures

MultiChoice uses several non-IFRS measures to evaluate performance. These include organic trading profit, core headline earnings per share, and adjusted core headline earnings per share. Organic trading profit excludes foreign currency movements and changes in group composition.

Core headline earnings per share adjust headline earnings for non-recurring and non-operational items. Adjusted core headline earnings per share further adjust for losses on cash remittances, primarily from Nigeria.

One-Off Impairments

MultiChoice’s expected loss per share has been impacted by a one-off IT systems impairment of ZAR1.0 billion. This impairment resulted from a reassessment of business needs in a challenging operating environment.

Economic and Currency Challenges

The weak macroeconomic and consumer environment has heavily impacted MultiChoice. The sharp depreciation of the Nigerian naira has added to the group’s financial challenges.

Strategic Interventions

Management’s strategic interventions have focused on cost optimization and cash management. These measures have partially offset the negative economic impacts.

Future Outlook

Despite the current challenges, MultiChoice remains committed to improving its financial performance. The group continues to focus on strategic interventions to navigate the volatile economic environment.

Financial Statement Release

MultiChoice plans to release its consolidated financial results on SENS on June 12, 2024. Shareholders are advised to review the details for further insights into the group’s financial performance.

Conclusion

MultiChoice faces significant financial challenges in FY24 due to a weak economic environment and currency depreciation. However, strategic cost optimization and cash management efforts provide a positive outlook for future performance.