Publishing house Naspers says its investments in Internet companies and pay television have paid off handsomely during the first half of the year.
Naspers says revenue grew 18%, to R15.8 billion, in the first six months of the year to September. Net profit jumped from R1.5 billion to R3.5 billion and earnings per share went from 648c to 860c.
The company, which owns magazines, newspapers, MultiChoice and several Internet operations, says most of its growth came from its Internet business, where revenue was up 54%. In addition, its larger pay-TV subscriber base resulted in revenue at that unit growing 20%.
Naspers' pay TV unit added 498 000 subscribers during the first half of the year on the back of demand from consumers wanting to tune into the Fifa Soccer World Cup and decoder subsidies. However, Naspers does not expect a “similar growth-boosting event” to reoccur soon.
Revenue for the unit, the biggest in the company's stable, increased 20%, to R10.2 billion, but operating margins were lower because of cost pressures, intense competition and increased sports content costs. In SA, the company added 363 000 new subscribers.
The company expects revenue growth to remain healthy, but is concerned that the higher cost of sport on pay TV could affect profit.
Naspers' Internet division, which includes stakes in Tencent, Mail.ru and Allegro, expanded during the first half of the year and trading profit grew 73%. The unit added R5.5 billion to Naspers' revenue and R1.8 billion in trading profit.
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