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UPDATE 1-South Africa's MultiChoice expects to post annual profit

(Adds details on earnings, background)

June 5 (Reuters) - MultiChoice Group Ltd, Africa’s biggest pay-TV group, said on Friday it expects to report an annual profit as it cut costs and foreign exchange swings worked in its favour.

The company said it expects its headline earnings per share (HEPS) - the main profit measure in South Africa - for the year to be between 460 cents and 500 cents, compared with a loss of 353 cents per share a year earlier.

Its results last year were impacted by a charge related to the disposal of a stake in its South African business.

“Focus on cost containment allowed the business to drive a further reduction in losses in the Rest of Africa segment, which has been the largest contributor to the improvement in group performance,” MultiChoice said in a statement.

The firm, a spin-off from e-commerce giant Naspers , also estimated annual core headline earnings would rise by 35% to 40%. Core earnings adjust for non-recurring and non-operational items.

MultiChoice faces competition from Netflix Inc along with a host of other regional players and is also in a battle to win screen time from gaming and user-generated content.

Reporting by Aniruddha Ghosh in Bengaluru; Editing by Aditya Soni

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