MultiChoice posts rise in profit but withholds dividend

South African pay television company MultiChoice Group said on Tuesday its annual profit rose 2 percent with strong subscriber growth and profit elsewhere in Africa offsetting poor market conditions in its home country.

For the year to March 31, core headline earnings per share, which strips off some non-recurring costs and foreign currency fluctuations, rose to R8.28 from R8.14 a year ago.

However, the company said it would not pay a dividend, saying the strength of its balance sheet remains a “core focus”, given a local economic crisis, weaker rand and funding needs for the business such as its streaming platform Showmax.

MultiChoice has been investing billions of rand to fight off competition from streaming giants Netflix, Amazon and Disney.

Africa’s biggest subscription television firm entered into an agreement in March with US media conglomerate Comcast to create a pan-Africa streaming platform built on the Showmax platform.

The new streaming service, which would be majority owned by Multichoice, would combine investment in local content with international content licensed from NBCUniversal and Sky.

The company’s R7.5 billion of cash at March 31 and R9 billion in available loans provide the flexibility to make Showmax the leading streaming platform on the African continent, it said.

As MultiChoice grapples with saturation in its largest market, it has been relying on revenue and profit from elsewhere in Africa and from newer businesses.

Full-year revenue rose 7 percent to R59.14 billion, with a 16 percent rise outside of South Africa while its home market dropped 2 percent.

Its shares were up 1.3 percent, in line with a 1.58 percent rise in the broader index.-ebusinesweekly