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MultiChoice Group maintains strategic momentum despite macroeconomic challenges

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MultiChoice

Despite external pressures, MultiChoice’s strategy leverages a solid financial foundation, targeted investments, and disciplined cost management to drive future growth and deliver the best video entertainment to customers

JOHANNESBURG, South Africa, November 12, 2024/APO Group/ —

  • Unprecedented foreign exchange pressures and economic challenges in key African markets impacted earnings and dampens subscriber growth
  • On track to right-size cost base and grow new revenue streams to drive future growth as streaming gains traction at the expense of traditional pay-tv
  • Cost-cutting measures delivered R1.3bn in permanent savings, on track to reach increased full-year target of R2.5 billion
  • Showmax customer base grew 50% YoY as a leading streaming service in sub-Saharan Africa
  • Strong revenue growth in new products: DStv Steam +71%, DStv Internet +85%, DStv Insurance +31%, KingMakers +53%
  • Strong liquidity of R10 billion provides solid financial base to support growth
  • Negative equity position on track to be resolved in November 2024.

MultiChoice Group (MCG or The Group) (www.MultiChoice.com) continued to deliver exceptional video entertainment and execute on core strategic initiatives during the first six months ended 30 September 2024 (1H FY25). However, unprecedented foreign exchange volatility severely impacted the Group’s interim financial results, while ongoing macroeconomic challenges weighed on customer growth and moderated overall performance.

Facing the most challenging operating conditions in almost 40 years and to generate desired returns, the Group has been proactive in its focus to ”right-size” the business for the current economic realities and industry changes. Although operating across Africa typically subjects the group to currency moves, abnormal currency weakness over the past 18 months have reduced the group’s profits by close to R7 billion. Combined with the impact of a weak macro environment on consumers’ disposable income and therefore on subscriber growth, it required the Group to fundamentally adjust its cost base – which is exactly what has been done. The normal cost savings program was accelerated, resulting in permanent savings of R1.3bn in over the past six months and an increased target of ZAR2.5bn for the full year.

“We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year. We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives. The Group’s liquidity position remains strong, with over ZAR10bn in total available funds,” says Calvo Mawela, MultiChoice Group CEO.

The Group is also adjusting to global pay-TV challenges as streaming services, the rise of social media and changing consumer preference impact the traditional broadcast business. Showmax, which reported 50% growth YoY in its paying customer base, strategically positions the business to actively participate in the streaming revolution as it gains momentum across Africa. To create sufficient capacity and drive growth, the group stepped-up its investment in this business by an incremental ZAR1.6 billion during the interim period.

“We have successfully been implementing our strategy over the past few years, achieving key milestones such as our investment in KingMakers, returning the Rest of Africa business to profitability in FY23 and FY24, concluding the Showmax partnership with Comcast and investing in Moment. While we’ve made huge inroads to reduce our cost base, there’s still more work to be done”.

“However, our focus extends beyond cost efficiency—we are equally committed to grow the business. We remain committed to driving new revenue streams and see significant medium to long-term opportunities in video entertainment, particularly in streaming, and in our adjacent new businesses,” says Mawela

The Group reported strong momentum in its new products and services, which all delivered robust   YoY revenue growth, i.e. DStv Stream +71%, DStv Internet +85% and DStv Insurance + 31%. KingMakers reported a healthy 27% increase in its online monthly active users in Nigeria and grew its revenue in Naira by 53%, while newly-launched SuperSportBet is showing good early traction in South Africa.

Financial Results Overview

Subscriber base: The pressure on the linear pay-TV subscriber base was lower than the previous six-months, reflecting a 5% decline (0.8m) compared to 6% reported (1.0m) in 2H FY24. This reflects an improving sequential trend. On a YoY basis, the linear subscriber base declined by 11% or 1.8m subscribers to 14.9m active subscribers, impacted by the challenging macroeconomic conditions that negatively impacted discretionary consumer spend.

Group revenues: Revenues increased by 4% YoY to ZAR25.4bn on an organic basis, due to disciplined inflationary pricing and revenue growth of new products. On a reported basis, revenues declined by 10%, impacted by foreign exchange pressures on the Rest of Africa business and a stronger Rand against the US Dollar.

Group trading profit: The Group’s ongoing cost optimisation drive delivered ZAR1.3bn in savings, and together with other improvements in the business, it resulted in a 33% increase in trading profit before incorporating the Showmax costs. A ZAR1.6bn step-up in the investment behind Showmax to create capacity for growth, trimmed the organic trading profit to ZAR5.0, a decline of only 1% YoY. Foreign exchange losses in the Rest of Africa business amounting to ZAR2.3bn reduced reported trading profit to ZAR2.7bn.

Adjusted core headline earnings, the board’s measure of the underlying performance of the business, amounted to ZAR7m, impacted by foreign exchange losses and the investment in Showmax.

Cash flow and liquidity: The Group free cash flow remained positive at ZAR0.6bn, with ZAR5.7bn retained in cash and cash equivalents. Despite the increase in net interest costs and a higher average debt balance, the Group remains well-positioned to navigate current challenges with access to ZAR4.4bn in undrawn facilities.

We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year

Operational update

General entertainment and sport

Delivering content that customers love remains the Group’s core focus— whether it is the best of local or international general entertainment or the most exciting sport events.

In the past six months, the Group produced 2,763 hours of local content, bringing its local content library to 86,215 hours.

SuperSport reinforced its reputation as a global leader in sport broadcasting with extensive coverage of the Paris 2024 Olympic Games, EURO 2024, and the ICC T20 Men’s World Cup. Over the past six months, SuperSport has broadcast 10,240 live events and provided a total of 21,540 hours of live coverage, a 22% increase YoY. 

SuperSport Schools doubled its user base and crossed a milestone of one million registered users on its app, delivering over 35,000 hours of content over the past six months.

Business segments

As a mature business, MultiChoice South Africa is focused on subscriber retention and reconnections, identifying remaining growth opportunities, as well as optimising processes and systems to improve customer experience and operational efficiency.

In the Rest of Africa business, the Group is implementing several initiatives to support improved financials, including price adjustments to counter the impact of inflation, renegotiating content deals where feasible, restructuring select packages to enhance ARPU, optimising the DTT network, and intensifying anti-piracy initiatives.

In FY25, Showmax is focussed on enhancing its content line-up, bedding down distribution partnerships, expanding payment channel integrations and refining its go-to-market strategy.

Irdeto delivered encouraging revenue growth, after securing a major customer in Asian and expanding managed services with a key customer in Australasia.

KingMakers continued to gain strong momentum in Nigeria, where BetKing Nigeria has secured the second position in the online betting market. SuperSportBet, the South African business launched late last year, is showing early signs of success and reported a remarkable tenfold increase in net gaming revenue over the past nine months.

Moment, now live in 40 African countries, has shown rapid growth since its launch last year, with total payment volumes (TPV) growing to USD242m. It is already processing almost 30% of the Group’s payments.

Looking Ahead

The Group continues to invest in its long-term future, focusing on the following strategic priorities:

  • Improving profitability and cash generation in the South African business.
  • Streamlining the cost base in the Rest of Africa to return this business to profitability.
  • Investing in Showmax to establish it as the leading streaming platform on the continent.
  • Supporting KingMakers, Moment and DStv Insurance to drive scale.

By executing well on these objectives, the Group will be well positioned to deliver future growth and create value as Africa’s leading video entertainment platform and most-loved storyteller.

Distributed by APO Group on behalf of MultiChoice Group.

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RIOT Network and MediaTek collaboration expands digital access in South Africa through innovative, community-driven Wi-Fi solutions

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MediaTek

RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities

JOHANNESBURG, South Africa, November 22, 2024/APO Group/ — 

MediaTek (www.MediaTek.com), a global fabless semiconductor company powering nearly 2 billion connected devices a year, and RIOT Network (https://RIOT.Network), a community mobile broadband provider in South Africa, have announced the successful integration of Mediatek’s Filogic 830 (https://apo-opa.co/3CIbkNl) chipset into RIOT’s second-generation CROWDNet Core Nodes.

The successful deployment of the CROWDNet nodes has enabled RIOT Network to achieve its aim of offering uncapped internet at an affordable price of R99 per month, and to do so profitably. To date, RIOT Network, in partnership with Sonke Telecommunications, has leveraged the nodes to connect more than 800 households and 5000 users in Olievenhoutbosch to uncapped Wi-Fi services.

RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities. Its CROWDNet Nodes, enable an innovative model for deploying user-operated network infrastructure. Community members serve as operators of some of the core network devices to earn a share of the fee from neighbours who use the service.

With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity

CROWDNet powered by MediaTek Filogic 830 brings affordable, last-kilometre broadband to communities where it is not commercially viable to deploy towers or fibre. The MediaTek Filogic 830 is a high-performance SoC for routers, repeaters, access points and mesh networking devices. The SoC enables device makers to build-in powerful applications based on an energy-efficient, Wi-Fi 6-ready platform.

“The Mediatek’s Filogic 830 chipset delivers a unique balance of high performance and cost-efficiency, allowing us to keep operational costs low while maximising network reliability and speed,” said Jarryd Bekker, CEO at RIOT Network. “This combination of affordability and sustainable business growth is pivotal to our vision of expanding digital access in underserved communities. Our work in Olievenhoutbosch near Centurion demonstrates the power of reliable, affordable internet, creating new opportunities for economic and social engagement.”

“With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity,” said Rami Osman (https://apo-opa.co/4ghZBUn), Director for Business Development, MediaTek Middle East and Africa. “We look forward to supporting RIOT in building a future where high-quality internet is accessible and impactful for all.”

Distributed by APO Group on behalf of MediaTek Inc

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African Energy Chamber (AEC) Endorses Inaugural Congo Energy & Investment Forum, Catalyzing Growth in the Republic of Congo’s Energy Sector

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African Energy Chamber

The African Energy Chamber proudly supports the inaugural Congo Energy & Investment Forum, scheduled for March 25-26, 2025 in Brazzaville

BRAZZAVILLE, Republic of the Congo, November 21, 2024/APO Group/ — 

The African Energy Chamber (AEC), as the voice of Africa’s energy sector, proudly supports the inaugural Congo Energy & Investment Forum (CEIF), set to take place in Brazzaville on March 25-26, 2025. Unveiled during African Energy Week: Invest in African Energies in Cape Town by the Republic of Congo’s Ministry of Hydrocarbons, this milestone event signals the nation’s commitment to strengthening its role as a key energy player on the continent, while showcasing a range of investment opportunities. 

Under the leadership of Hydrocarbons Minister Bruno Jean-Richard Itoua, the Republic of Congo has emerged as sub-Saharan Africa’s fourth-largest oil producer, with anticipated production of 280,000 barrels per day (BPD) by the end of 2024 and ambitions to reach 500,000 BPD within three to five years. Building on this momentum, the CEIF will highlight innovative projects and foster strategic partnerships that enhance investment, drive economic growth and position the Congo as a leader in Africa’s energy expansion.

Meanwhile, Société Nationale des Pétroles du Congo (SNPC), led by CEO Maixent Raoul Ominga, is spearheading the Congo’s energy growth. SNPC holds a majority stake in the Mengo Kundji Bindi II permit, with 2.5 billion barrels of estimated oil potential. The company is developing the site through 13 wells, 3D seismic data acquisition, and the construction of six production platforms. 

We are honored to secure the Chamber’s endorsement for this pivotal forum

With the Chamber’s official support, the CEIF is set to attract government leaders, C-suite executives from major IOCs and energy experts, who will offer critical insights into Congo’s oil, gas and energy sector developments. The country is overhauling its gas sector to unlock 10 trillion cubic feet of resources through a comprehensive Gas Master Plan and new Gas Code that introduces favorable fiscal terms and enables small-scale project development, as well as large-scale, integrated gas megaprojects like Eni’s Congo LNG and Wing Wah’s Bango Kayo. 

“The Congo Energy & Investment Forum marks a major milestone for the country, amplifying its strategic energy initiatives and showing industry stakeholders that it is serious about advancing its energy sector. We look forward to supporting this forum, which promises to connect investors, drive impactful partnerships and elevate the Congo’s position within Africa’s energy sector,” says NJ Ayuk, Executive Chairman of the AEC.  

“We are honored to secure the Chamber’s endorsement for this pivotal forum, which, through its vast network and influence, will help attract key stakeholders and decision-makers to the event. Together, we aim to highlight the immense potential of the Congo’s energy sector, foster strategic partnerships and drive transformative investments that contribute to sustainable growth across the industry,” notes James Chester, CEO of Energy Capital & Power, organizers of the CEIF.   

This premier forum provides a unique platform for connecting local and international investors with high-impact opportunities across a diversified range of energy projects, paving the way for collaborations that drive growth and transformation. The AEC’s endorsement underscores its commitment to fostering strategic partnerships, sustainable investment and regional cooperation, aligning with its broader mission to make energy poverty history across the continent by 2030.  

As the energy industry continues to serve as a critical pillar of the Congolese economy and a catalyst for sustainable development, the AEC remains dedicated to supporting initiatives like CEIF that foster progress, investment and partnerships across the African energy landscape. 

For more information, please visit www.CongoEnergyInvestment.com

Distributed by APO Group on behalf of Energy Capital & Power.

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Any Successful African Energy Policy at Conference of the Parties (COP) or Anywhere Must Have Oil and Gas at its Core (By NJ Ayuk)

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Conference of the Parties

Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels

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JOHANNESBURG, South Africa, November 21, 2024/APO Group/ — 

By NJ Ayuk, Executive Chairman of the African Energy Chamber (www.EnergyChamber.org).

I believe the ultimate responsibility for getting there is ours and no one else’s. Yes, we need partners to walk alongside us, but the success of our energy movement rests on African shoulders.

To begin with, I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals.

This will be particularly important in COP29 in Baku. It is imperative that African leaders present a unified voice and strategy for African energy transitions. We must make Africa’s unique needs and circumstances clear and explain the critical role that oil and gas will play in helping Africa achieve net-zero emissions in coming decades.

I would encourage African leaders to talk about the need for financing, as well, to make it possible for us to adopt renewable energy sources and set up the necessary infrastructure. Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels.

Africa’s governments have a role to play in a successful African energy movement as well.

Because Africa’s energy industry still can benefit greatly from the presence of international oil companies, our government leaders need to approve contracts with oil and gas companies promptly instead of allowing red tape to delay projects after discoveries are made.

And, they need to offer the kinds of fiscal policies that allow oil companies to operate profitably in Africa. In turn, that will help those companies generate revenue, create jobs and business opportunities, and foster capacity building.

I also would encourage governments and civil societies to reward companies that exemplify positive behavior. Let’s incentivize the kind of activities we want, from creating good jobs and training opportunities to sharing knowledge.

I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals

And there’s more.

We in Africa must work together to create more opportunities for women to build careers in the oil and gas industry at all levels. Our energy industry can’t reach its potential to do good when half of our population is left out. Our progress on behalf of women has not been great—We need to do better, and we need to act quickly.

How the world can support

Now, I mean it when I say Africans are responsible for building the future they want. But, I would love to see Western governments, businesses, financial institutions, and organizations support our efforts.

How? They can avoid demonizing the oil and gas industry. We see it constantly, in the media, in policy and investment decisions, and in calls for Africa to leave our fossil fuels in the ground. Actions like these, even as Western leaders have pushed OPEC to produce oil, are not fair, and they’re not helpful.

I also would respectfully ask financial institutions to resume financing for African oil and gas projects and stop attempting to block projects like the East African Crude Oil pipeline or Mozambique’s LNG projects.

Please understand that with the war in Ukraine, the energy crisis in Europe, and the energy poverty facing our continent, our countries, like many others, are simply choosing the paths they believe are most likely to help their people.

You know, people for years have accused me of loving oil and gas companies more than Africa. The opposite is true. In my frequent travels around the continent, I’ve observed far too many young people with little in the way of opportunities.

I know our young people have aspirations for a better future. I know they have big dreams. And, I know that future is nearly within their grasp.

A thriving, strategically managed energy industry can make it possible for many of these young people, whether it leads to good jobs or it fosters the kind of economic growth that creates jobs in other fields. Even if we only get the lights on in their communities, we’ll be giving our young people hope and improving their chances of realizing their goals.

This is what drives me, the idea that with our ongoing efforts and determination, our young people can realize meaningful opportunities. I encourage each of you to work with us at the African Energy Chamber, in a spirit of cooperation and mutual respect. Together, we can build the kind of African energy movement that our continent, our communities, and our young people need and deserve.

Distributed by APO Group on behalf of African Energy Chamber.

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