Naspers Limited Today Announced Its Results for the Six Months to 30 September 2016
November 25 2016 - 8:00AM
Business Wire
ENCOURAGING FIRST SIX MONTHS
Naspers (JSE:NPN) (LSE:NPSN) today announced its financial
results for the six months to 30 September 2016. Revenues, measured
on an economic interest basis (including the proportionate
contribution from associates and joint ventures), increased 16%
year on year to US$6,8bn. Excluding acquisitions, disposals and
currency movements, revenue growth was 27%. Businesses outside
South Africa contributed 80% of revenues, up from 75% a year
ago.
Core headline earnings grew 31% to US$914m. “We experienced a
satisfactory first six months to the financial year,” said Naspers
chair Koos Bekker. “The ecommerce businesses and Tencent performed
well, while video entertainment and print did their best in a
pretty tough environment.”
As part of regular portfolio reviews, Naspers concluded four
notable ecommerce transactions. In Poland, the agreed sale of
Allegro for US$3,25bn will realise a solid return on investment. In
India, the merger of the ibibo platform with MakeMyTrip will create
a leading business in the travel segment. The acquisition of Citrus
Pay drives consolidation in the online payments space in India,
whilst in the United States, the consolidation with Wallapop gives
mobile-only classifieds platform letgo increased scale.
Naspers now reports in United States dollars (US$), with the
financial performances of the businesses consolidated in their
functional currencies and translated into US$. Where pertinent,
performance in local currencies, adjusted for acquisitions and
disposals, is quoted in brackets after the equivalent International
Financial Reporting Standards metrics.
Currency again impacted our results. In the video entertainment
segment, which typically earns local currencies but incurs
significant US$ costs, currency affected both revenues and
profitability. However, in the ecommerce segment, currency
movements are diffused by the group’s diverse geographic spread and
the fact that costs are mainly in local currencies.
Revenues in the internet segment, which now accounts for 72% of
group revenues, were up 30% (40%) to US$4,9bn. Trading profits
increased 54% (71%), driven by Tencent and higher profits or
contracting losses in many ecommerce units. “The group now has 23
profitable ecommerce businesses, up from 18 a year ago,” said CEO
Bob van Dijk. “Classifieds delivered strong results across the
portfolio, boosted in particular by Avito. Our etail, travel and
payments businesses all performed well.”
The digital terrestrial television (DTT) business and the
African video entertainment group experienced the impact of weak
currencies. Reported revenues of US$1,6bn were down 8% (up 6%) on
the prior year and trading profit dropped 43% to US$226m. However,
the team delivered a pleasing return to subscriber growth,
reporting 11 million subscribers. The focus remains on giving
subscribers the very best quality local and international content,
while managing costs, improving customer service and retaining
customers in an environment where there is intensifying competition
from global players such as Amazon, Netflix, Apple and Google.
ShowMax, the subscription video-on-demand service, is growing
steadily.
The print media segment of Media24 continues to face structural
declines in its traditional print business – a global phenomenon.
The revenue performance of its new ecommerce initiatives was
positive, benefiting from fresh product offerings.
The group’s share of equity-accounted results was US$912m and
their contribution to core headline earnings increased
47%.Consolidated free cash flow was close to neutral, due to lower
profitability of the sub-Saharan Africa video entertainment
business and higher consolidated development spend.
“The group will continue investing in long-term opportunities,
and seek further promising models within the internet segment,”
said CFO Basil Sgourdos. “In the US, we expect to accelerate
letgo’s development spend to further strengthen its position. In
video entertainment, we will battle a tough environment by reducing
costs to counter the impact of falling currencies and we aim to
grow DTH customers by offering increased value,” he added.
The complete results are available on the Naspers website at
http://www.naspers.com.
IMPORTANT INFORMATION
This media release contains forward-looking statements as
defined in the United States Private Securities Litigation Reform
Act of 1995. Words such as “believe”, “anticipate”, “intend”,
“seek”, “will”, “plan”, “could”, “may”, “endeavour” and similar
expressions are intended to identify such forward-looking
statements, but are not the exclusive means of identifying such
statements. While these forward-looking statements represent our
judgements and future expectations, a number of risks,
uncertainties and other important factors could cause actual
developments and results to differ materially from our
expectations. These include numerous factors that could adversely
affect our businesses and financial performance. We are not under
any obligation (and expressly disclaim any such obligation) to
update or alter our forward-looking statements whether as a result
of new information, future events or otherwise. Investors are
cautioned not to place undue reliance on any forward-looking
statements contained herein.
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Naspers LimitedMeloy HornHead of Investor
RelationsTel: +27 11 289 3320+27 11 289 4446Mobile: +27 82 772
7123orBasil SgourdosChief Financial OfficerTel: +852
2847 3365Mobile: +852 9080 5155
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