Naspers Provisional Results for the Financial Year Ended 31 March 2008Wednesday, June 25th, 2008
International Internet Investments Drive Solid Growth
CAPE TOWN, South Africa — Naspers (JSE: NPN) today reported a 19% increase in revenue to R20,5 billion, largely driven by growth in its international internet businesses. The pay-TV sector reported a solid performance for the year ended 31 March 2008.
Core headline earnings grew by 38% to R3,9 billion with core HEPS up 16% to R11,16. The board declared a 15% dividend increase to 180 cents per share.
“Over the past year the group experienced lively growth, particularly in the internet sector,” Naspers chairman Ton Vosloo said. “Core operations put in a solid performance and there was good progress with the development of several business opportunities.”
The year was characterised by acquisitions totalling R17 billion in the internet sector. Naspers also acquired the remaining 40% of M-Net/SuperSport and 100% of Cloakware, which specialises in software protection products.
The group sold private education business Educor and entered into a conditional sale agreement for its Greek and Cypriot pay-TV business, NetMed. After the financial year-end Naspers announced the potential disposal of M-WEB, its market-leading African ISP and the only business of its kind in the group’s portfolio.
Naspers continued its investment in the development of new technologies and business opportunities with a 29% increase in development costs to R1,1 billion.
Over the period the total pay-TV subscriber base grew by 13% (246,000 additional equated homes) to 2,5 million subscribers under management.
South Africa 1.57 million - PVR - 242,000 Sub-Saharan Africa 539,000 Mediterranean 0.4 million
Due to tighter consumer spending in South Africa the print media segment had a tough year with a marked slowdown in advertising support. Circulation growth for some newspaper titles such as Daily Sun, Son and Soccer Laduma remained positive however. Commercial printing business Paarl Media had a solid year with the new plant in Gauteng exceeding expectations.
The contribution by the group’s associate businesses, including Tencent in China, Abril in Brazil and Mail.ru in Russia, increased by a healthy 75% to R772 million.
“Looking ahead, we plan to grow on three levels,” Naspers CEO Koos Bekker said. “We will broaden our existing businesses from within, develop new opportunities and seek new investments. Geographically we will continue to focus on emerging markets. Poland, India, China, Russia and Brazil are still growing steadily.”
Naspers financial director Steve Pacak said that the level of competition was expected to intensify in the pay-TV segment. Substantial licence fees would have to be paid as soon as MultiChoice was licensed in South Africa.
“We expect the slowdown in consumer spending in South Africa to continue,” he said. “This will have a dampening effect on the print sector’s advertising and circulation revenues. Conversely pay TV has in the past proved resilient to the vagaries of the economic cycle. We don’t expect a slowdown in any of our internet businesses.”