DStv owner, MultiChoice has reported a staggering R4.1 billion [rands] loss for the year ending March 31, 2024 and has become technically insolvent.

The South African pay television company said on Wednesday that it swung into a 706 million rand ($38 million) loss before tax in the year to March, and explained it was due to currency volatility and weak consumer spending.

Growing debt woes in many African nations and risk aversion by investors buying African exports have put pressure on foreign currency reserves, creating volatility.

This development marks the company’s worst financial performance on record, with a 42% increase in losses compared to the previous year.

MultiChoice’s financial woes stem from a double whammy: a 9% decline in active subscribers and unfavourable foreign exchange rates.

This resulted in a 5% net decline in group revenue to R56 billion and a 21% decline in group trading profit to R7.9 billion.

The subscriber losses were felt across all markets, with DStv’s South African and Rest of Africa businesses experiencing a drop.

In addition to this awful financial performance, MultiChoice’s balance sheet shows the company has become technically insolvent.

The company’s total assets have shrunk from R47.6 billion to R43.9 billion, while liabilities have risen to around R45 billion.

With negative equity of R1.068 billion, MultiChoice cannot settle all its debts if forced to sell its assets.

Despite the bleak financial picture, MultiChoice maintained a confident front and described its operational performance as “resilient” with signs of an imminent turnaround.

MultiChoice said it was prioritising cash generation and has accelerated its cost-reduction program, aiming to save R2 billion by its 2025 financial year.

“Clear strategic milestones were reached, with the group successfully launching Showmax 2.0, SuperSportBet and Moment,” MultiChoice said.

“All of these are now revenue-generating and supporting the group’s future growth prospects.”

MultiChoice Group CEO Calvo Mawela said that four years after establishing a clear strategy of building Africa’s entertainment platform of choice and investing in services to support a broader ecosystem, its three core segments are now fully operational.

These are video entertainment, interactive entertainment, and fintech.

“Our focus now shifts to building on these solid foundations to drive growth in these new areas, and on further enhancing business efficiency across our operations,” the company said.

“The group will continue its efforts to drive growth in focused areas, notably Showmax, Moment, SuperSportBet, DStv Insurance, DStv Internet, and DStv Stream.”

MultiChoice said it would do this while working hard to retain its DStv and GOtv customers and support their activity rates through the coming financial year.