MultiChoice Group said on Monday that it expects headline earnings per share (Heps) for the financial year to March 2022 to fall by as much as 25%. The shares slipped 1.7% on the news.

Heps, it said, will be between 99c (20%) and R1.24 (25%) lower than the 2021 financial year’s figure of R4.96. Earnings per share, meanwhile, will fall by between 35% and 40%.

The group blamed “lower unrealised foreign exchange gains on the translation of transponder lease liabilities (satellite leases) stemming from a less significant appreciation in the rand against the US dollar year on year”.

It also blamed an increase in foreign exchange losses associated with the repatriation of cash from Nigeria at the parallel exchange rate.

However, MultiChoice emphasised that it prefers to use trading profit and core Heps as “more appropriate indicators of the operating performance of the group as they adjust for non-recurring and non-operational items”.

Trading profit, it said, will increase by between 0% and 3% compared to the R10.3-billion reported a year ago. Core Heps, meanwhile, will rise by between 5% and 8%.

These are only modest improvements in these two metrics given the group said it experienced “sustained subscriber growth, the recovery in advertising revenue and a continued focus on cost control across the business”.

These benefits were negated by a big increase in content costs due to the deferral of R1.1-billion in costs from the previous financial year as the sporting calendar normalised and local production activity accelerated following Covid-19-related interruptions.