Naspers revenue tops R50 billion

Media and Internet giant Naspers on Tuesday (25 June) reported a 27% rise in consolidated revenues, to R50.2 billion for the year ended March 2013.

Growth came from organic expansion of existing businesses and acquisitions, supplemented by the depreciation of the rand.

In the aggregate, managed Internet revenues expanded 80% to R34,6 billion. Trading profits from the internet segment were 44% higher at R6.2 billion.

Development spend accelerated to R4.3 billion (2012: R2.8 billion), focused mainly on growing its e-commerce businesses and the roll-out of pay-television services across Africa.

As this development spend is expensed through the income statement, Naspers said its consolidated trading profit for the year was flat at R5.7 billion. Operating profit advanced 19% to R3.82 billion.

Nasper’s principal operations are in Internet platforms, pay-television and the provision of related technologies and print media including publishing, distribution and printing of magazines, newspapers and books.

Locally, it owns online retailers, and PriceCheck, pay television operation DStv, and Supersport, and Mweb.

The group holds interests in Russian Internet firm Mail.Ru Group, and Chinese group, Tencent. Both reported positive growth and contributed R7.3 billion to core headline earnings.

“We recorded a non-recurring book profit of R2.6 billion, flowing from’s sale of shares in Facebook. This profit is excluded from core headline earnings,” it said.

On e-commerce, Naspers said: “We believe online shopping is a global consumer trend and anticipate that affordable tablets and smartphones will accelerate the uptake of services in our markets.”

The group said e-commerce revenues doubled to R11.4 billion, through a combination of organic growth and a few acquisitions.

Naspers said its pay TV segment reports revenues 20% higher at R30.3 billion.

Growth came largely from an increase in the net subscriber base of 1.1 million, which now reaches 6.7 million households across 48 countries in Africa. Trading profits grew 18% to R7.6 billion, despite the increased development spend on infrastructure.

For print, Naspers cited a “tough year” globally. Revenues were flat as advertisers continue to either divert their spend to the Internet or cut budgets.

The impairment of equity-accounted investments amounted to R2.1 billion and relates mainly to the group’s print media investment, Abril.

“Revenues in the print industry are buffeted by the dual headwinds of the macro-economic downturn in Brazil and increased online competition. Whilst cost savings initiatives have been implemented, we believe it prudent to book this impairment,” Naspers said.

The net result of the above is that core headline earnings grew 20% to R22.16 per N ordinary share. Free cash flow for the period was R3.5 billion, slightly lower than last year because of the higher capital expenditure.

Naspers pointed to annual gross dividend increase of 15% to 385c per listed
N ordinary share, and 77c (previously 67c) per unlisted A ordinary share.

Looking ahead, Naspers said it intends to expand its e-commerce businesses across emerging markets and to build its pay-television subscriber base across the African continent.

“A significant shift is visible in user activity moving from the personal computer to mobile devices such as smartphones and tablets. This trend simultaneously disrupts existing business models and creates new opportunities.”

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Naspers revenue tops R50 billion