South Africa’s MultiChoice has cautioned investors that its half-year results (to the end of September) will be affected by the increased costs of set-top box subsidies. The costs, of about R700 million (€40m) directly related to the take-up of subscribers for the FIFA World Cup.

MultiChoice’s trading update said that its profits would rise by between 0-5 per cent that the R6 billion of a year ago. Its full half-year numbers will be released on November 10th.

“The financial performance for the current period benefited from continued subscriber growth, an ongoing reduction in Rest of Africa trading losses and further savings generated from the group’s established cost optimisation programme,” the group said in its statement. The decoder subsidies, however, negated most of these operational benefits.

“The board considers trading profit and core headline earnings per share as the two most appropriate indicators of the operating performance of the group, as they adjust for non-recurring and non-operational items,” MultiChoice added in the update. “The reduction in earnings and headline earnings per share is primarily due to higher unrealised foreign exchange losses on the translation of the group’s US dollar liabilities, including transponder leases, stemming from the sharp depreciation in the rand against the dollar towards the end of the current period.”

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Tags: multichoice, south africa, World Cup