Vosloo: Internet valuations inflated

2011-08-26 15:44

Johannesburg - Non-executive chairperson of Naspers [JSE:NPN] Ton Vosloo said on Friday recent experience has taught the group that internet valuations have become inflated and that good value is difficult to find.

He was speaking at the annual general meeting.

"We are focusing more on growing our businesses organically and on developing new technologies. This may dampen earnings in the year ahead, as the cost of developing these businesses is expensed through the income statement. However, we believe this strategy will stimulate long-term growth prospects," Vosloo said.

He noted that the group's consolidated revenues grew 18% to R33bn, while core headline earnings grew 13% to R6bn.

Vosloo said that the internet businesses in emerging markets introduced even more accessible, reliable and convenient services to users, and as a result consumer trust in transacting on these platforms was increasing.

"The e-commerce operations of Allegro, Eastern Europe and Ricardo, Western Europe continue to expand healthily. Latin America is concentrating on deepening its services and broadening its revenue base.

"Rapid growth of the internet industry in China enabled Tencent, through its focus on user experience, to expand the usefulness of its core platforms. The Russian internet market remains lively and the Group, listed on the London Stock Exchange, maintained market share in most segments," he said.

The pay-television unit recorded growth of 977 000 homes for the period to March 31, largely driven by the 2010 Fifa World Cup.

"In several African countries we made good progress in increasing local content," Vosloo said.

Media under pressure

He noted that the regulatory environment in respect of the press in SA had been under considerable scrutiny.

"The proposed information bill is deeply disturbing. It will limit access to information which we can now legitimately get, by declaring it secret. This goes beyond what is necessary to protect either our national security or what is in the public interest. Should the proposed changes become a reality, SA will be a different society.

"We will no longer have a transparent democracy. Cover-ups will be easy, corruption will spread and there is little doubt that our economy will go to pieces. Media freedom and the free flow of information is the lifeblood of all the other freedoms we enjoy under the Bill of Rights. We are encouraged by the latest developments in parliament that sanity will prevail," he said.  

- Fin24 is a Naspers publication.