E-commerce and media group Naspers says it has made progress across its video-entertainment (previously pay-TV) and Internet platforms.
Reporting its financial results for the year ended 31 March, the group says it strengthened its position in several markets through incremental investments in people, technology, content and marketing. The group says about R10.7 billion was invested in development spend in growing the business - a 33% increase on the prior year.
"The classifieds and e-tail businesses saw strong growth. We continue to invest in these formats as they are gaining market share globally. The smartphone is becoming the primary Internet device in many of our markets, and we are dedicating considerable resources to advancing our mobile products," the group notes.
Naspers says the video-entertainment business made solid progress with the total base closing at 10.2 million households across Africa. "This comprises 2.2 million digital terrestrial television (DTT) subscribers and almost eight million direct-to-home (DTH) satellite service subscribers.
The group says Internet businesses continue to show "lively growth". "Segment revenues increased 37%, to R78 billion (2014: R57billion). Trading profits grew 96%, to R13 billion (2014: R6.6 billion), mainly attributable to the operating performance of Tencent and some of the profitable e-commerce businesses."
Naspers says the transition of Internet use from desktop to mobile continues at a rapid rate. In China, the company notes, mobile Internet users now account for 85% of total Internet users. "Tencent has seen strong growth in its Weixin mobile communication, social and commerce platform, mobile games, and mobile video.
"Tencent continued to expand its partnerships with a series of investments in leading vertical players such as Dianping (local restaurant and services search), 58.com (online classifieds), as well as BitAuto and Leju (auto and real estate verticals) and JD.com (first-party e-commerce)."
Tencent's strong performance contributed R14.6 billion (2014: R9.7 billion) to core headline earnings, says Naspers.
The group says its e-commerce segment is growing rapidly. Revenues are up 36%, to R27.8 billion (2014: R20.4 billion). "Given the different stages of maturity and nature of the various e-commerce models, retail and marketplaces currently generate the bulk of revenues.
"We wish to deliver superior customer experiences in order to grow ahead of our competitors and expand the market. This has implications for development spend, which totalled R8 billion, leading to a 14% increase in trading loss to R6.1 billion (2014: R5.3 billion).
The video-entertainment segment produced another consistent performance, generating revenue of R42.4 billion - up 17% year-on year, says the company. It adds development spend increased 31%, to R2.4 billion, as MultiChoice builds out its DTT services, resulting in trading profit contracting by 6%, to R8 billion.
Some 727 000 DTH customers were added, bringing the DTH subscriber base to almost eight million.
"The DTT network is now substantially in place, with MultiChoice operating in 11 countries and 114 cities. The DTT base more than doubled, closing at 2.2 million customers. Kenya is one of the first African countries to make the transition to digital as the analogue switch-off rollout began in January 2015."
Naspers notes competition from international online players with global reach, such as Netflix, Amazon and Google, is increasing. MultiChoice is investing in its online offering, expanding its delivery platforms and improving products and services.
Share