JSE-listed Naspers, which has been aggressively expanding into the online arena, completed several deals in the year to March, which would have aided revenue growth had they been done at the start of the year.
The listed group, which has interest in pay-TV, Internet companies and print, this week said revenue for the year gained 19%, to R39.5 billion, while core headline earnings improved 15%, to R6.9 billion.
“The markets and specific business sectors in which we operate remain lively,” CEO Koos Bekker says. “We have many competitive, regulatory and technology challenges, but we also have opportunities.”
The bulk of its revenue and trading profit came from its pay-television unit, which added R24.1 billion in turnover and R6.3 billion in trading profit. Internet was its second-largest segment, turning over R19.2 billion and contributing R3.8 billion in trading profit.
Naspers says the Internet segment “remains the fastest-growing area, with several new services under development”. Its pay-television unit “recorded satisfactory progress in subscribers” and is focused on expanding into online services and delivering digital terrestrial television services, says Naspers.
TV innovation
Its biggest unit, pay-television, added 684 000 subscribers in the year to a base of 5.6 million homes. Of the gains, some 492 000 new subscribers came from SA, of which 293 000 bought the lower-priced Compact bouquet.
BoxOffice, which allows PVR subscribers to view the latest blockbuster movies, was “popular” with an average monthly rental of more than 300 000 movies, says Naspers. The lower-priced Compact and Family bouquets now account for 42% of the base.
Naspers says trading margins were reduced by investment in local content, decoder subsidies and the development of new products. Naspers is rolling out digital TV under the GOtv brand name and has launched in Zambia, Uganda, Kenya and Nigeria. “We plan to continue investing in the expansion of digital terrestrial networks.”
Organic investment
Naspers' Internet unit grew revenue 59%, but its focus on organic expansion led to trading profit increasing at a slower rate of 9% to R3.8 billion.
The company's share of revenue from China-based Tencent gained 59%, to R11.5 billion, as peak simultaneous online instant messaging users increased by 22%, to 167 million, while total user accounts grew to 752 million.
In Russia, Mail.ru delivered strong growth in communication, online gaming and social networks. Its portal reached 33 million unique users and Naspers' share of its revenue gained 66% to R1.1 billion.
Its other Internet businesses combined reported “robust” revenue growth of 57% and a trading loss of R1.2 billion, the direct result of increased organic development costs.
Naspers has recently made several acquisitions and says, had all the deals been included from last April, they would have had a “significant effect on the group's consolidated revenue and net results”.
In April 2011, Naspers bought 85% of e-commerce group 7Pixel, which operates in Western Europe, for R228 million. In July, it acquired 80% of Vipindirim Electronic Services (Markafoni), a Turkish e-commerce group, for R672 million.
The following month, Naspers bought Slando, an online classifieds company in the Ukraine, for R195 million. Last December, it also acquired 90% of Fashion Days, an e-commerce group operating in several Eastern European countries, R435 million.
Naspers also bought “various smaller acquisitions” for a total of R323 million.
Chairman Ton Vosloo says “the Internet remains the key growth area, with several new services being developed”.
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