South Africa's MultiChoice interim profit plunges as subscriptions slip
Interim adjusted headline earnings per share down 99%
Analysts says now is the right time for Canal+ offer
Updates with analyst comment in paragraphs 4, 7-8
By Sfundo Parakozov
JOHANNESBURG, Nov 12 (Reuters) -South African pay television company MultiChoice Group MCGJ.J reported a 99% fall in half-year profit on Tuesday as subscriptions slipped due to a hostile operating environment.
The group said subscriptions fell by 5% in its South African business and 15% in the rest of Africa over the period.
The owner of DStv, whose pay-TV business operates across 50 countries in sub-Saharan Africa, said its performance was marred by weaker local currencies, constrained consumer spending, particularly in Nigeria, and extreme power disruptions in Zambia.
"They (MultiChoice) have no choice but push through as much inflation as possible to the consumer while aggressively cutting costs in order to protect the core business," said Peter Takaendesa, head of equities at Mergence Investment Managers.
MultiChoice said its adjusted core headline earnings per share - its measure of the underlying performance - fell to 2 cents per share for the six months ended Sept. 30, down from 356 cents per share a year earlier.
Canal+, part of French media group Vivendi VIV.PA in April made a firm offer of 125 rand in cash per share, or about 35 billion rand ($1.94 billion), to acquire the shares it does not own in the broadcaster.
The Canal+ deal came at the right time for MultiChoice shareholders, Takaendesa told Reuters.
"It is unlikely that the 125 rand offer is at risk given Canal+ is likely taking a long-term investment view on the transaction," Takaendesa said.
The group declared no dividend in line with the terms of the cooperation agreement applicable during the Canal+ mandatory offer period.
On the Johannesburg Stock Exchange, its share price closed slightly stronger.
($1 = 18.0749 rand)
Reporting by Sfundo Parakozov; Editing by Jan Harvey, Alexander Smith and David Evans
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