DStv-owner MultiChoice sees equity plummet 


MultiChoice’s equity decreased by 33.8% from R8.07 billion at the end of the previous financial year to R5.34 billion at the end of March 2023. 

This was revealed in the company’s results for the financial year ending 31 March 2023. 

MultiChoice reported a loss of R2.9 billion for the 2022 financial year, which drove a substantial decline in equity. 

The R3.9 billion payout in dividends for the previous financial year, on top of the loss, caused the large decline. 

MultiChoice reported comprehensive income of R966 million for the year. However, this was only due to favourable exchange rate movements during the financial year. 

Multichoice continued to pay out a R3.9 billion dividend in the 2022 financial year, which could not be financed at the low-profit level.

The dividend, therefore, had to be financed through MultiChoice’s retained earnings causing the equity level to plummet, an indication that the dividend level is unsustainable.

The company did not declare a dividend for the year ending 31 March 2023 due to a substantial decline in free cash flow. 

Consolidated free cash flow was down 48% year-on-year to R2.9 billion. This was despite group revenue increasing by 7% to R59.1 billion. 

Group trading profit decreased by 3% to R10 billion. MultiChoice attributes this to weaker earnings in its most developed market in South Africa and foreign exchange losses from its Rest of Africa operations. 

The lower earnings in South Africa were due to working capital investment, especially around prepayments for sports rights renewals and the timing of payments due to a financial system upgrade.

The impact of South African macro challenges and the group’s increased investment in Showmax caused SA margins to contract to 24% from 31% in the prior year.

MultiChoice also warned investors that sustained high levels of load-shedding significantly impacted the activity levels of the DStv customer base.

This has exacerbated the company’s declining average revenue per user (ARPU) due to Premium subscribers either ending their subscriptions entirely or downgrading to a cheaper package.

The Rest of Africa business returned to profitability and delivered a trading profit of R900 million, a R2.8 billion improvement from the prior year.