Companies
Multichoice to integrate Netflix, Amazon contents into decoder
Multichoice recorded 22% growth in subscribers revenue in Nigeria, expects new bouquets and 1H FY2020 migration to drive further growth.
When the shares of Multichoice Group jumped by 8.5% to 102.62 rands on Wednesday at the Johannesburg Stock Exchange, South Africa, a lot of observers were shocked by the news, as it had not recorded such feat in months.
The development, some observers said it could be attributed to the 2020 full-year result of the group, which was released on Wednesday. The pay-TV announced a 5% growth in its subscribers base when it rose to 19.5 million. While it recorded revenue growth of 3% to close at R51.4 billion, its core headline earnings were up by 38%. No wonder, it could afford to pay a dividend of R2.5 billion (N57.9 billion) to its shareholders.
Other observers argue that the development could also be attributed to the news the group broke in the financial report. The group stated that it had signed a deal with Netflix Inc. and Amazon.com, its US rivals to offer its streaming services through its new decoder. This move, no doubt, would help Africa’s largest pay-TV firm retain teeming subscribers and attract potential viewers.
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The deal was disclosed in MultiChoice’s results presentation, tagged ‘Improve Retention’ shared on its site and seen by Nairametrics.
Multichoice partners Netflix
This could indicate ‘If you can’t beat them, join them’ move, as the duo rivals have been giving Multichoice run for its money, creating greater competition, offering cheaper and faster internet speeds, which enabled them to stamp their feet on the continent.
How would Multichoice benefit from the deal?
While observers await Multichoice’s announcement on how the move could affect it’s monthly fee probably in a few weeks, a top executive of the group explained that it is a win-win situation for the company.
“What would typically happen is we would get commission on whatever revenue gets generated by customers coming from our platform,” Chief Financial Officer Tim Jacobs said in a phone interview, according to Bloomberg.
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Nigeria’s contributions to the figures
The financials stated that the group recorded 8% year-on-year subscribers growth in Nigeria, highest in Africa, as it recorded losses in Zimbabwe (41%), Zambia 11%, Angola 2%, while Kenya was constant. It also recorded a 22% growth in subscribers revenue in Nigeria.
No doubt, it stated in the report that the group expects it’s new bouquets and 1H FY2020 migration would earn more for the company by the end of the 2021 financial year-end.
Meanwhile, Netflix has also made an effort to produce more African content. Dramas “Queen Sono” and “Blood and Water”, both South African, debuted on the service this year, supported by extensive marketing campaigns.
“There is little overlap between content on Multichoice’s Showmax, that is now 50% local, and a service like Netflix at the moment, hence we find deals with other video-on-demand services complementary,” said Jacobs.
Impact of COVID-19
The full impact of the COVID-19 pandemic on the business is yet unknown, MultiChoice explained that it expects weaker economic growth and higher unemployment in many of its markets. “The TV provider continues to film local productions, taking specific precautions such as splitting production teams,” Jacobs added.
Companies
COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says
NB Plc’s operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase and FX devaluation.
The management of Nigeria’s leading brewer, Nigerian Breweries Plc has revealed that its operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase, FX devaluation and scarcity of foreign exchange.
This statement was made by the Managing Director of Nigerian Breweries, Mr Jordi Borrut Bel, at the company’s pre-AGM media briefing for the financial year-end 2020, which held in Lagos this week.
He noted that the increase in the brewer’s cost in 2020 was due to the COVID-19 pandemic which disrupted the company’s operations, as well as the increase in VAT, devaluation and FX scarcity which has put pressure on input cost.
READ: Alcoholic beverage makers on NSE lose a total N27.7 billion in a single day
The Nigerian Breweries boss explained further that the increase in cost could not be fully attributed to currency devaluation and foreign exchange scarcity.
He explained that the increase in costs of goods sold, as reported in its audited financial results, could also be linked to the increase in the volume of goods sold, as the company’s sales volume in 2020 increased by almost the same percentage as the cost of goods sold.
To deal with this challenge going forward, he revealed that the company is focused on the supply chain, and will continue to seek out ways to mitigate any of the price increases coming from FX scarcity.
READ: Brewery sector: A quarter to forget
The company’s profitability in question?
An analysis of the company’s result revealed that despite the 4.3% increase in net revenue from N323.00 billion recorded in 2019, to a total of N337.01 billion in 2020, the company’s profit declined significantly by 53.3% to N7.53 billion.
Speaking on this, Jordi Borrut in his statement at the press briefing noted that the brewer’s business performance in 2020 was quite impressive especially in the face of the COVID-19 pandemic and economic recession. Despite these challenges, the company maintained a strong and healthy balance sheet.
“There was a slight reduction in profitability but compared to the previous year, the business witnessed an improved growth in revenue. The significance of this is that the business became more stable and healthier,” he said.
READ: Nigeria’s triangular beer war on the rise with the arrival of Budweiser
What you should know
- Nigerian breweries, being the largest brewer in the country, maintained its stance in terms of generating profits year-on-year. The company emerged as the only brewer to record a profit of N7.37 billion from its operations in 2020, 54.3% lower than 2019 figures (N16.1 billion).
- From this, the leading brewer was able to pay shareholders a total dividend of N7.5 billion, translating to a dividend of 94 kobos per share – a dividend payout in which exceeds 100%.
- While Guinness and International Breweries made a loss of N12.6 billion and N24.9 billion respectively, this reality impacted their ability to pay their shareholders dividends in 2020.
Business News
Highest paid Nigerian bank MD/CEOs of 2020
Bank MD/CEOs in Nigeria earned a combined N1.5 billion in salaries in 2020.
The banking sector, especially commercial banks, is one of the most profitable sectors of the Nigerian Economy churning out profits of close to a trillion in 2020 alone. They are also one of the highest employers of labours in the country employing over 93,000 Nigerians.
Sitting at the helm of affairs is the Chief Executive/Managing Director, the highest-ranking executive in the organization saddled with the responsibility of making the best corporate decisions, oversight of the execution of the organisation’s corporate strategies and most importantly increasing the shareholders’ return. The buck basically stops on their table.
Thus, these enormous responsibilities also come with a considerable executive compensation for their service making them ostensibly the highest-ranking staff of the bank.
READ: Jim Ovia: From a clerk to founder of Nigeria’s most profitable bank
In typical Nairametrics fashion, we bring to you a list of the highest-ranking bank CEOs for 2020 based on their executive compensation (exec comps). The bank MD/CEOs under our review earned over N1.5 billion in salaries in 2020.
The data was sourced from the published audited accounts of the bank and verified by Nairametrics Research.
