Naspers Limited Today Announced Its Results for the Year To 31 March 2017
June 23 2017 - 8:00AM
Business Wire
POSITIVE RESULTS FOR THE YEAR, ACCELERATING GROWTH
OPERATIONALLY AND FINANCIALLY
Naspers (JSE:NPN) (LSE:NPSN) today announced its financial
results for the year to 31 March 2017. Revenues, measured on an
economic interest basis (including the proportionate contribution
from associates and joint ventures), increased 19% year on year to
US$14.6bn. Excluding acquisitions, disposals and currency
movements, growth was 29%. Businesses outside South Africa
contributed 80% of revenues, compared to 77% a year ago.
Core headline earnings grew 41% to US$1.8bn. “Naspers produced
satisfactory results for the year,” said Naspers chair Koos Bekker.
“Tencent continued its growth, while we scaled various ecommerce
businesses. Video entertainment is facing new competition from
international players based in the US.”
Foreign currencies affect the group’s segments to varying
degrees. In video entertainment, weakened currencies have a large
impact on earnings (given pricing in local currencies, but a high
US dollar cost base). In the internet segment, the effect is
lessened by a diverse geographic spread and a cost base generally
denominated in local currencies.
Naspers reports in US dollars, meaning that the local currency
financial performance of businesses is translated to US$. Where
pertinent, performance in local currency terms, excluding the
effects of acquisitions and disposals, is quoted in brackets after
the equivalent International Financial Reporting Standards metrics.
Amounts are shown on an economic-interest basis unless otherwise
stated.
Revenue in the internet segment, which now accounts for 73% of
group revenues (67% last year), was up 29% (41%) to US$10.6bn.
Trading profits increased 52% (65%), mainly due to Tencent’s
excellent results and increased profitability of the more mature
ecommerce assets. “The group now has 21 profitable ecommerce
businesses, delivering US$699m in revenues and US$229m in trading
profits,” said CEO Bob van Dijk. “Classifieds performed well,
boosted by Avito and accelerated growth in our European markets led
by Poland, Ukraine, Romania and Portugal. Our B2C, travel and
payments businesses all generated strong revenue growth and were
further strengthened by additional investments to drive scale.”
Naspers continued to optimise its portfolio during the year. The
group acquired Citrus Pay in the Indian online-payments market and
merged its Indian online travel platform, ibibo, with Nasdaq-listed
MakeMyTrip. The US operations of mobile app-only classifieds
platform letgo were merged with Wallapop and results to date are
encouraging. In January 2017, the group disposed of Allegro and
Ceneo in Poland, generating net proceeds of US$3.2bn. The group
also expanded its footprint in the online food delivery segment,
whilst Naspers Ventures made a number of investments in
earlier-stage technology companies.
Last year tough economic conditions led to significant
subscriber churn in the video- entertainment segment. However, 2017
saw some return to growth with the group adding 935,000
direct-to-home (DTH) homes to bring the subscriber base to 11,9
million households. The digital terrestrial television (DTT)
business added a total of 597,000 homes. A value strategy, which
focused on bouquet restructuring, better customer retention and
cost reduction, is improving the business for the long term.
At a macro level, continued currency weakness (the segment bills
in local currencies) resulted in revenues declining marginally to
US$3.4bn (but increasing 7% if the currency impact is excluded).
Content costs increased due to competition. These factors resulted
in a trading profit of US$287m, a decline of 53% (32%) year on
year. The group is responding by removing or renegotiating
non-essential content. Intensifying international competition from
global players such as Netflix, Amazon, Apple and Google is
foreseen.
Although substantial growth of 14% (16%) was recorded in the
ecommerce and digital segments of our media businesses, overall
revenues declined marginally to US$588m. Besides ongoing challenges
from structural industry changes, the segment also faced harsh
macroeconomic conditions.
The group’s share of equity-accounted results was US$1.8bn and
their contribution to core headline earnings increased 50% year on
year. The combination of higher development spend (up 22% (13%) on
a consolidated basis to US$861m) and a lower profit contribution
from the video-entertainment business resulted in consolidated free
cash outflow of US$125m.
“In the year ahead we will keep scaling the ecommerce businesses
to drive profitability and cash generation. In our more mature
businesses, such as media and video entertainment, the focus will
be on managing macroeconomic and sectoral headwinds through cost
containment,” said CFO, Basil Sgourdos. “We will continue to drive
innovation and transformation of existing businesses, while
investing to fuel the next wave of growth,” 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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version on businesswire.com: http://www.businesswire.com/news/home/20170623005220/en/
Naspers LimitedMeloy Horn, Tel: +27 11 289 3320+27 11 289
4446Mobile: +27 82 772 7123Head of Investor RelationsorBasil
Sgourdos, Tel: +852 2847 3365Mobile: +852 9080 5155Chief Financial
Officer
Naspers (NASDAQ:NPSN)
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