DStv revenue soars

Naspers on Tuesday (26 November) reported a 28% rise in revenue to R28.8 billion, for the six months ended September 2013, driven largely by its Internet businesses and a depreciating rand.

The group noted that expanding its e-commerce and DTT operations resulted in development spend accelerating 87% to R3 billion, leading to a 15% drop in trading profits, to R1.62 billion.

Naspers reported a fully diluted headline earnings per N ordinary share of 899 cents, from 800 cents in 2012.

Internet business

For its Internet business, Naspers said revenues across all platforms grew 76% to R24.9 billion; however, the step-up in development spend in this segment resulted in slower trading profit growth of 24% to R3.9 billion.

Chinese firm, Tencent – in which Naspers has a 34% interest – reported a 70% rise to R15.3 billion, with trading profit up 45% to R5.19  billion.

The core businesses made progress in advertising, mobile and e-commerce initiatives.

Monthly active instant-messaging accounts were around 816 million, while the combined monthly active users of WeChat and Weixin increased to 272 milliom.

“Given growth opportunities in Chinese e-commerce, Tencent is investing in regional and category expansion,” Naspers said.

Mail.ru lifted revenue 50% to R1.1 billion, with trading profit up 60% to R546 million. The Mail.ru portal now attracts 33 million unique Russian users and expanded its mobile product offering and audience.

For its e-commerce segment, Naspers said that revenues almost doubled to R7.9 billion. Development spend was R2.3 billion with trading losses of R1.8 billion.

Pay-TV

For pay television, Naspers said this business grew revenues 18% to R17.1 billion. The subscriber base increased by a net 560,000 and now totals 7.3 million households in 48 countries in Africa.

“However, as a consequence of the development of DTT services, trading profits inched ahead only 11% to R4.5 billion,” it said.

Print media

Naspers said the print media industry continues to experience difficult conditions globally. ”Overall our print businesses saw flat revenues, but most remain profitable due to cost reductions,” it said.

The group’s print segment delivered revenue of R5.6 billion, with trading profit at R214 million, down from R247 million in 2012.

Looking ahead, Naspers cautioned that over the next six months an acceleration of investment into growth areas will lower earnings.

“We are building e-commerce platforms, in particular online classifieds. In addition, we are rolling out digital terrestrial television (DTT) across many cities in Africa. The pace of investment in these opportunities will accelerate sharply in the second half of the current financial year,” the group said.

“We expect development spend to exceed R7 billion for the full financial year to March
2014, compared to R4.3 billion last year.”

“As this investment is largely made through the income statement, it will have a dampening effect on both earnings and cash flows in the second half of the current financial year and cumulatively, for the year as a whole,” Naspers said.

Naspers announced that Koos Bekker, executive director and CEO, has agreed, at the board’s request, to stay in his current post, however, Steve Pacak, executive director and CFO, will retire as CFO on 30 June 2014.

Pacak will remain on the board as a non-executive director. Basil Sgourdos, presently CFO of Naspers’s subsidiary MIH Holdings, will succeed Steve Pacak.

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DStv revenue soars