In the fiscal year ending March 2024, Pay-TV operator Multichoice Group successfully repatriated $184 million (approximately N192.09 billion) from Nigeria, as disclosed in its recently released consolidated financial statements. This amount marks an increase from the $132 million remitted in the previous year, with the average exchange rate rising to N1044 per dollar from N684 per dollar in the same period.
The report highlighted that the company incurred remittance losses amounting to $59 million, a decrease from the $132 million loss in the prior year, largely due to the convergence of the official and parallel exchange rates. At the close of the fiscal year, Multichoice held $39 million in cash within Nigeria, down from $104 million at the end of the previous fiscal year, underscoring the firm’s commitment to remitting cash amidst a weakening naira.
Throughout the year, Multichoice experienced a 13 percent drop in subscribers across Nigeria, Angola, Kenya, and Zambia. The depreciation of local currencies, particularly in Kenya, significantly impacted the Group’s USD revenues by 32 percent. Conversely, South Africa saw a modest five percent decline in subscribers, thanks to strong retention initiatives.
The challenging economic climate in Nigeria, one of Multichoice’s largest markets, was a major factor in the subscriber decline. The company attributed a nine percent overall decline in active subscribers to a 13 percent drop in its Rest of Africa business, as economic hardship forced many customers to prioritize essential needs over entertainment.
The fiscal year 2024 presented the toughest macroeconomic conditions since 2016 for Multichoice’s Rest of Africa operations. The official and parallel naira exchange rates peaked at N1600 and N1900 per dollar, respectively, in February 2024, alongside severe foreign exchange depreciations in other African markets. These economic pressures, combined with the residual effects of the FIFA World Cup and Nigerian elections in fiscal year 2023, led to a reduction of 1.2 million active subscribers, bringing the total to 8.1 million by the end of fiscal year 2024.
Nigeria’s economic situation has further deteriorated, with inflation reaching 33.69 percent in April, exacerbating the strain on consumer spending power. Multichoice noted that subscriber growth typically slows following the FIFA World Cup, but fiscal year 2024 fell below trends due to the worsening economic environment.
Despite the general resilience of pay-TV during economic downturns, the high cost of living and unreliable power supply in many markets have made it difficult for customers to maintain subscriptions. Multichoice has adjusted its focus to manage the business based on active subscribers rather than 90-day active subscribers to better optimize retention and activity rates in this low-growth environment.
In a related development, Multichoice reached a settlement with Nigeria’s Federal Inland Revenue Service (FIRS) in February 2024 concerning tax assessments from 2021, agreeing to pay N35.4 billion ($37.3 million). Additionally, the company has increased DStv and GOtv prices three times over the past year, amidst regulatory and legal challenges.
Multichoice has also entered a Cooperation Agreement with Groupe Canal+ SA following Canal+’s mandatory offer, after acquiring more than 35 percent interest in Multichoice. Canal+ has since increased its stake to 45.20 percent. Despite these developments, the group reported a five percent net decline in revenues due to inflation-led pricing, foreign exchange challenges, and a reduced subscriber base.
