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Cape Town - Media group Naspers [JSE:NPN] has reported consolidated revenue growth of 26%, driven by both its internet and pay-television businesses.
This growth was fuelled by development spend of R7.7bn - up 79% on last year - devoted particularly to
e-commerce and digital terrestrial television (DTT). As previously cautioned, this expansionary spend had the effect of limiting core earnings to R8.6bn, about the same as the previous year.
The company said its goal is to invest in new ventures that will deliver value over the long term. With this in mind, it will continue to invest heavily for organic growth and may also acquire new businesses within its focus field.
Consolidated revenues grew 26% to R62.7bn, boosted largely by growth in Naspers' internet businesses. Also influential was a rand that depreciated by an average 19% over the period, against a basket of the company's main operating currencies.
Expanding e-commerce and DTT businesses resulted in development spend ratcheting up by 79% to R7.7bn (2013: R4.3bn).
Net interest on borrowings rose to R1.261bn (2013: R636m), due both to the rand depreciation and increased borrowings utilised to fund acquisitions and growth.
Tencent and Mail.ru reported strong growth. The company's share of equity-accounted results includes once-off gains of R2.9bn flowing from Mail.ru's sale of shares in Facebook and Qiwi, as well as gains from Tencent's merger of some of its e-commerce businesses with JD.com and the sale of its interest in ChinaVision.
These gains have been excluded from core headline earnings.
An impairment charge of R1.6bn has been recognised in other gains/losses and relates mainly to the flash-sale fashion businesses in the e-commerce segment.
Internet units showed strong growth. In total, segment revenues are up 65% to R57bn. The ramp-up in
development spend resulted in slower trading profit growth of 8% to R6.6bn. Naspers' internet activities are rapidly transforming themselves into mobile-focused operations.
Tencent and Mail.ru doing well
Tencent managed to hold its own in a dynamic and highly competitive Chinese market. A shift is occurring in user traffic from PC to mobile devices, driving substantial changes across different sectors of the Chinese internet industry, including communications, social networking, online games, media and ecommerce.
Tencent consolidated its leading position in communication and games in China, while strengthening its stance in ecommerce.
Core platforms QQ instant messaging, Qzone (the leading social networking service platform in China) and Weixin - known as WeChat internationally and a next-generation communications service for smartphones - recorded solid growth.
In the PC gaming market, Tencent published six of the top ten games in China, while Riot Games' League of Legends enjoyed growth in international markets. Revenue from online games and social networks also benefited from smartphone mobile games integrated into the mobile QQ and Weixin platforms.
Mail.ru reported good results with growth across all major segments. Revenue for 2013 was 27 billion roubles, up 30% year on year, while group aggregate net profit rose 36% to 11.4bn roubles.
Revenues from all e-commerce activities over the past year grew well and increased 64% to R20.3bn. E-commerce is an area of expansion and Naspers incurred development spend here of some R5.6bn. As a consequence, the trading loss for this segment widened to R5.3bn.
A focus of attention was online classifieds, where Naspers owns and operates sites in some 40 countries in Eastern Europe, Asia, Africa, Latin America and the Middle East. Talent and execution were improved.
Naspers is stepping up investments to capitalise on this momentum.
The payments businesses delivered growth, and experienced leadership was introduced in several positions.
Print takes knock
The pay-television business reported growth in revenues. Subscriber numbers are up by 1.3 million households, taking the base to over 8 million homes across 50 countries in sub-Saharan Africa.
Revenues grew by 20% to R36.3bn. Investments in DTT services resulted in trading profits creeping up at a slower 13% to R8.5bn. DTT coverage has been expanded and now covers eight countries and 92 cities.
Naspers continues to invest in its online offering, expanding its mobile phone services tablets and computers, and launched an improved personal video recorder.
The print media segment experienced a tough year with flat revenues and declining margins. Media24 managed small revenue growth of 1%, but trading profit declined by 7%. Naspers' online/mobile media and news efforts have seen audience and engagement growth.
The board has recommended that the annual gross dividend be increased by 10%.
* Fin24 is part of Media24, a subsidiary of Naspers. Naspers has a 34% stake in Tencent.
This growth was fuelled by development spend of R7.7bn - up 79% on last year - devoted particularly to
e-commerce and digital terrestrial television (DTT). As previously cautioned, this expansionary spend had the effect of limiting core earnings to R8.6bn, about the same as the previous year.
The company said its goal is to invest in new ventures that will deliver value over the long term. With this in mind, it will continue to invest heavily for organic growth and may also acquire new businesses within its focus field.
Consolidated revenues grew 26% to R62.7bn, boosted largely by growth in Naspers' internet businesses. Also influential was a rand that depreciated by an average 19% over the period, against a basket of the company's main operating currencies.
Expanding e-commerce and DTT businesses resulted in development spend ratcheting up by 79% to R7.7bn (2013: R4.3bn).
Net interest on borrowings rose to R1.261bn (2013: R636m), due both to the rand depreciation and increased borrowings utilised to fund acquisitions and growth.
Tencent and Mail.ru reported strong growth. The company's share of equity-accounted results includes once-off gains of R2.9bn flowing from Mail.ru's sale of shares in Facebook and Qiwi, as well as gains from Tencent's merger of some of its e-commerce businesses with JD.com and the sale of its interest in ChinaVision.
These gains have been excluded from core headline earnings.
An impairment charge of R1.6bn has been recognised in other gains/losses and relates mainly to the flash-sale fashion businesses in the e-commerce segment.
Internet units showed strong growth. In total, segment revenues are up 65% to R57bn. The ramp-up in
development spend resulted in slower trading profit growth of 8% to R6.6bn. Naspers' internet activities are rapidly transforming themselves into mobile-focused operations.
Tencent and Mail.ru doing well
Tencent managed to hold its own in a dynamic and highly competitive Chinese market. A shift is occurring in user traffic from PC to mobile devices, driving substantial changes across different sectors of the Chinese internet industry, including communications, social networking, online games, media and ecommerce.
Tencent consolidated its leading position in communication and games in China, while strengthening its stance in ecommerce.
Core platforms QQ instant messaging, Qzone (the leading social networking service platform in China) and Weixin - known as WeChat internationally and a next-generation communications service for smartphones - recorded solid growth.
In the PC gaming market, Tencent published six of the top ten games in China, while Riot Games' League of Legends enjoyed growth in international markets. Revenue from online games and social networks also benefited from smartphone mobile games integrated into the mobile QQ and Weixin platforms.
Mail.ru reported good results with growth across all major segments. Revenue for 2013 was 27 billion roubles, up 30% year on year, while group aggregate net profit rose 36% to 11.4bn roubles.
Revenues from all e-commerce activities over the past year grew well and increased 64% to R20.3bn. E-commerce is an area of expansion and Naspers incurred development spend here of some R5.6bn. As a consequence, the trading loss for this segment widened to R5.3bn.
A focus of attention was online classifieds, where Naspers owns and operates sites in some 40 countries in Eastern Europe, Asia, Africa, Latin America and the Middle East. Talent and execution were improved.
Naspers is stepping up investments to capitalise on this momentum.
The payments businesses delivered growth, and experienced leadership was introduced in several positions.
Print takes knock
The pay-television business reported growth in revenues. Subscriber numbers are up by 1.3 million households, taking the base to over 8 million homes across 50 countries in sub-Saharan Africa.
Revenues grew by 20% to R36.3bn. Investments in DTT services resulted in trading profits creeping up at a slower 13% to R8.5bn. DTT coverage has been expanded and now covers eight countries and 92 cities.
Naspers continues to invest in its online offering, expanding its mobile phone services tablets and computers, and launched an improved personal video recorder.
The print media segment experienced a tough year with flat revenues and declining margins. Media24 managed small revenue growth of 1%, but trading profit declined by 7%. Naspers' online/mobile media and news efforts have seen audience and engagement growth.
The board has recommended that the annual gross dividend be increased by 10%.
* Fin24 is part of Media24, a subsidiary of Naspers. Naspers has a 34% stake in Tencent.
