MultiChoice has announced its interim trading results for the six months ending 30 September 2024, showing a mixed financial performance.
The company pointed to significant challenges stemming from adverse macroeconomic conditions, fluctuations in foreign exchange rates, and consumer behaviour in its primary markets, which affected its overall performance.
In response to diminishing subscriber engagement and foreign exchange pressures, MultiChoice is implementing an inflationary pricing strategy, aiming for US$113 million in cost reductions.
According to the trading update, the group has made notable progress in achieving these objectives year over year.
While organic trading profit is anticipated to remain stable, excluding Showmax, it is projected to rise by 30% to 35%.
However, MultiChoice expects a rise in loss per share between 34% and 38%, with headline loss per share expected to increase by 44% to 48%.
Adjusted core headline earnings per share will decline by 97% to 101% during this reporting period.
The board has conveyed to shareholders that it views trading profit and adjusted core headline earnings per share as key operational performance indicators.
MultiChoice prefers these metrics as they account for non-recurring and non-operational factors.
After accounting for tax and non-controlling interests, adjusted core headline earnings reflect the financial impact of losses incurred from cash remittances in various African markets.
The company stated, “Organic trading profit and adjusted core headline earnings per share are regarded as non-IFRS measures.”
Organic trading profit is determined by excluding the effects of foreign currency fluctuations and group structure changes.
Adjusted core headline earnings are defined by recalibrating headline earnings for several specific items, net of tax and non-controlling interests, such as:
- Amortisation of intangible assets related to business combinations
- Adjustments due to IFRS 3: Business Combinations
- Costs related to equity-settled share-based payments
- Unrealised gains or losses from foreign currencies
- Certain fair-value adjustments by IFRS
- Non-recurring impacts of current and deferred taxation
- One-off empowerment transactions
- Expenses related to acquisitions and contractual settlements
- Non-recurring impairments of specific assets
- Losses on cash remittances, primarily in Nigeria, once net of tax and non-controlling interest
The accompanying table summarises the estimated changes in loss per share, headline loss, trading profit, and adjusted core headline earnings per share. It compares these figures between the six months ending 30 September 2024 and the same period in 2023.
