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MultiChoice hit by Nigerian cash problems

June 29, 2022

By Chris Forrester

South Africa-based pay-TV operator MultiChoice says it is facing a liquidity crisis in terms of its presence in Nigeria, its second-largest market.

The problem is that repatriating cash out of Nigeria is expensive. The country has various foreign exchange rates, and the difference between the ‘Investors & Exporters’ rate (of US$1 is currently some Naira420. However, the widely accessed ‘black market’ rate for US$1 is Naira 620.

MultiChoice is reportedly reduced its investment cash in Nigeria to $155 million (expressed as Rand 2.3 billion).

In its Q1/2022 financial report, Multichoice said “Although liquidity challenges continued in Nigeria, the group successfully repatriated cash throughout the financial year, albeit at a premium to the official rate. Consequently, local cash balances in Nigeria were maintained at ZAR2.3bn (USD155m).”

The report continued: “Cash holdings of ZAR2.5bn (FY21: ZAR2.5bn) held in Nigeria, Angola and Zimbabwe remain exposed to weaker currencies.”

Financially, MultiChoice might be under pressure but its subscription position in Nigeria is good, and the company reported subscription revenue growth up 43 per cent, and 11 per cent growth in subs numbers.

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