Naspers Annual Results confirms four million pay TV homes across Africa

Investment

Naspers released its annual results on Tuesday, 29 June 2010. "Overall we had a good year," Ton Vosloo, Naspers chairman said. "The increase in free cash flow to R4.1 billion was particularly pleasing."

Naspers is reporting a 5% increase in revenue to R28 billion for the financial year ended 31 March 2010. Operational profit (before amortisation and other gains and losses) grew by 10% to R5.4 billion, mainly due to cost management and flat development spend.

Core headline earnings, considered by the board to be a good indication of sustainable performance, were up 22% on the previous year to R5.3 billion or R14.26 per share. The board recommended a 14% dividend increase to 235 cents per share.

Added Vosloo, "The strong rand depressed the contribution by the group's offshore operations somewhat."According to a press statement, the Internet industry is showing growth in emerging markets. Revenues advanced 24% year-on-year. Profitability was affected by research and developments spend and new product launches.

The pay-TV businesses added 634,000 gross subscribers, an increase of 19% over the previous year. The group now reaches almost four million homes across Africa. Operating margins were slightly lower due to the cost of building the subscriber base, as well as higher content costs resulting from increased competition and more local production. The past year saw the technology business become operationally profitable through a reduction in costs.

Naspers's share of income from associates, including Tencent in China, Mail.ru in Russia and Abril in Brazil, increased to R2.1 billion.

"We will continue to invest for long-term returns," Naspers CEO Koos Bekker said. "This includes new investments in internet. Changes in technology will also require additional investment in our pay-TV operations".

"We mostly have resilient businesses in emerging markets that are still expanding," Naspers financial director Steve Pacak said. He cautioned that competition in pay-TV, regulation and consumer spending levels remain concerns.