MultiChoice, the South African pay-TV operator, has issued a warning that its full-year earnings could be up to 35% lower than the previous year, causing its share price to plummet.
- The company has cited a range of factors for the expected decline in earnings, including the impact of COVID-19 on the economy, rising costs, and increased competition in the pay-TV market.
- MultiChoice has also been affected by the ongoing power outages in South Africa, which have disrupted its operations and led to higher costs.
- The company’s streaming service, Showmax, has seen strong growth, with subscriber numbers increasing by 40% year-on-year, but this has not been enough to offset the decline in its traditional pay-TV business.
- MultiChoice has implemented a range of cost-cutting measures, including a freeze on executive salaries and a reduction in marketing spend, in an effort to mitigate the impact of the earnings decline.
- Despite the warning, MultiChoice remains optimistic about its long-term prospects, citing the growth potential of its streaming business and the increasing demand for digital entertainment.