MultiChoice, South Africa’s TV giant, reported a pretax loss of 706 million rand ($38 million) for the fiscal year ending in March, citing weak local currencies and a drop in subscribers.
Canal+, which already owns more than 35% of MultiChoice’s stock, has made an offer to buy the company.
“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 loss followed a 921 million rand profit before taxes reported the year before.
It was compounded by a nine per cent decline in subscriptions.
According to the report, businesses in South Africa suffered from 275 days of rolling power outages, discouraging potential subscribers who did not have backup power.
Group revenue was also down five per cent to 56 billion rand, but the firm said that were it not for currency swings, it would have been up three per cent.
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.
