MultiChoice Group, a South African pay-TV company, reported a 5% decline in half-year profit due to currency depreciation, losses from its streaming service Showmax, and lower earnings from its home market.
The group added DStv Premium subscribers for the first time in years, likely driven by the Rugby World Cup in France.
The group operates pay TV in 50 sub-Saharan African countries. Its core headline earnings dropped to 1.9 billion rand ($105 million) in the six months ended Sept. 30, from 2 billion rand a year ago.
Its overall 90-day active subscriber numbers decreased by 2% to 21.7 million, with a 5% fall in South Africa because of power cuts and the removal of non-paying customers.
However, its premium customers in South Africa increased by 5%, boosted by the Rugby World Cup.
“Coming off a high-growth period linked to the FIFA World Cup in the previous six months, the group’s overall 90-day active subscriber base contracted by 2% (0.4 million) to 21.7 million.
The Rest of Africa base, accounting for 60% of linear customers, grew by 1% to 13.0 million,” it said in its financials.
Its group revenue rose 4% to 28.3 billion rand on an underlying basis but fell 1% on a reported basis due to currency effects and weak consumer spending. Its subscription revenues grew 3% due to strong performance in the rest of Africa and Showmax.
MultiChoice has been investing heavily to compete with streaming giants like Netflix, Amazon, and Disney.
It increased its spending on local content by 16% year-on-year. It also partnered with U.S. media giant Comcast to launch a new platform later in its financial year.
The group said this service would enable it to double its customer base and generate an additional $1 billion in revenue in the medium term. Showmax saw its active subscriber base grow 13%, resulting in a 46% surge in revenues.
However, its operating costs also increased due to investments, leading to a 500 million rand rise in trading losses to 800 million rand.