MultiChoice Nigeria revenue falls 30% despite price hike

MultiChoice Group, the parent company of MultiChoice Nigeria, reported a 30.77% decline in subscription revenue from Nigeria in its full financial year ending March 2024.

Revenue fell to $341.72 million (6.3 billion rand at 18.44 rand to the dollar) from $493.59 million (9.1 billion rand) a year earlier, despite two price increases, reports Business Day.

The company attributed the decline to a combination of factors including the weakening of the naira, record inflation that topped 33% and rising fuel costs.

“Higher fuel costs in local currency also hurt consumers. Power outages of 16 hours/day. The official rate weakened by 50% against the dollar and liquidity remains tight, the “parallel rate” closed at ~N1600 against the ~N1308 official rate,” it said.

These economic difficulties led to an overall decline in active subscribers of 9%, mainly due to a 13% decline in its business in the rest of Africa, with Nigeria, Angola and Zambia being the hardest hit.

To counter foreign exchange pressure caused by the depreciation of the naira against the dollar, MultiChoice implemented price increases in April and November, with an average increase of 40 percent over the year. However, these measures did not offset the negative revenue impact resulting in a foreign exchange loss of $249.51 million for MultiChoice Nigeria.

“The sudden depreciation of the NGN against the USD generated foreign exchange losses of ZAR 4.6 billion on the non-quasi equity (intercompany) loan with MultiChoice Nigeria,” it said.

The company’s total revenue also fell 5 percent to $3.04 billion (56 billion rand), mainly due to a 7 percent drop in subscription revenue caused by a weaker naira. The group’s trading profit fell 21 percent to $428.50 million (7.9 billion rand).

“The Rest of Africa business faced the toughest macroeconomic conditions in its core markets, with high, double-digit inflation and extreme depreciation of local currencies (particularly in Nigeria, Angola, Kenya and Zambia), which hurt USD revenue by 32 percent. The active subscriber base fell to 8.1 million, but effective retention efforts contributed to an improved subscriber mix,” the statement said.

In addition to its financial struggles, MultiChoice Nigeria is currently embroiled in a court case over recent price hikes in Nigeria. The Competition and Consumer Protection Tribunal recently ordered the pay TV operator to offer Nigerians free one-month DStv and GOtv subscriptions.

The operator was also fined N150 million for challenging the jurisdiction of an Abuja court that prevented it from increasing its subscription prices. MultiChoice has since “disagreed with the judgment and will therefore file an appeal against the said judgment”.