Multichoice Gains N165.41 Billion in 6 Months despite Covid-19 Pandemic
Popular video entertainment company, Multichoice has reported that it expects profits between N160.47 billion and N165.41 billion in six months, ended 30 September 2020.
According to the statement released by the company, trading profit is expected to be 15% to 20% higher than the N118.50 billion recorded during the same period last year.
It also reported that the profits could be even higher on constant currency as earnings are expected to rise as high as 35% to 40% more than the amount generated last year.
The increased profit during the period rose despite the continued macro-economic impact of COVID-19 due to the increase in subscription cost which benefited from the growth of the subscriber base of its Cable and its over-the-top (OTT) media service caused by the Lockdowns.
An over-the-top (OTT) media service is a streaming media service offered directly to viewers via the Internet.
Also, the company’s strong focus on overall cost reduction allowed the group to drive a further reduction in losses in the ‘Rest of Africa’ section, which has been the largest contributor to the improvement in group performance.
Earnings per share and headline earnings per share
Similar to trading profits, the earnings per share and headline earnings per share for the company revealed that it expects current earning per share to be between 68% and 74% higher than the prior period’s reported earnings per share of N8,263 (336 ZAR cents).
For headline earnings per share for the current period, Multichoice is expecting a 40% to 45% increase in earnings from the N10,747 (437 ZAR cents) reported the previous year.
The headline earning per share is also about 65% to about 70% higher than the prior earning of 341 ZAR cents reported in June.
According to the company, the key reason for the improvement in trading performance is the reduced foreign exchange losses due to more favourable forward exchange contracts maturing.
Multichoice was able to overturn the depressed advertising revenues and commercial subscription revenues caused by the economic effects of the pandemic and still make a good profit.
With the worst of the pandemic already gone, the company is on track to record an even higher profit margin within the next six months.
Other details of results during the six month period will be provided in the condensed consolidated interim financial results due to be released on 12 November 2020.
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