MultiChoice gets boost from rand

Africa’s largest pay-TV operator MultiChoice received a boost from depreciation of the rand in the six months to endSeptember, helping its core earnings surge by as much as a quarter.

Africa’s largest pay-TV operator MultiChoice received a boost from depreciation of the rand in the six months to end-September, helping its core earnings surge by as much as a quarter.

The group, which has battled an exodus of premium subscribers who are choosing to watch online content on streaming platforms such as Netflix, said it expects core headline earnings per share for the period to be between 70c and 88c higher than last year’s 352c, representing a 20%-25% increase.

The R55.4bn company has had a strong run on the JSE since its unbundling from internet giant Naspers in February, with its share price up 18.25% for the year to date.

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In the last financial year the company for the first time made the majority of its revenue outside the country and it is now banking on a strategy of increasing its local content and massmarket offering as a means of growth.

Headline earnings per share (Heps) for the period are expected to be between 256c and 271c higher than last year’s figure of 78c.

MultiChoice, which is set to release its results on Tuesday, said an improvement in its trading performance was influenced by the lower depreciation of the rand against the dollar compared to the prior period, which has led to a decrease in unrealised foreign exchange losses on translation dollardenominated transponder lease liabilities of the group.

The rand crashed 19.4% against the dollar in the same period in 2018, due to sentiment around land expropriation, central bank independence and other factors. In 2019, the rand has only fallen by 4.4% for the six months to end-September.

Shares in the DStv owner closed 0.76% higher at R125.20 on Thursday.