M-Net/SuperSport grew attributable earnings by 24% to R51,2 million, of which Naspers' equity accounted share was R14,7 million.

MAGAZINES
The Magazine division maintained its position as leading publisher in its field in Africa and increased consolidated revenue by 9%. If the net effect of certain discontinued activities is excluded, the real growth in revenue is 14%. The substantial investment in the printing works during the previous two years is bearing fruit.

NEWSPAPERS
The Newspaper division reflected revenue growth of 20%. Both the Sunday titles, Rapport and City Press, and the dailies turned in solid performances. The upgrading of the infrastructure and capacity of the printing works in Johannesburg and Cape Town is nearing completion and capital expenditure in this regard is expected to amount to R175 million this year. The performance of the advertising market is, however, unstable and could influence results.

BOOK PUBLISHING AND EDUCATION
These divisions remain adversely affected by the education crisis in South Africa. Net revenue is marginally ahead of last year, with costs being tightly controlled as the units position themselves for a recovery in the industry.

INTERNET
M-Web reported revenue growth of 130% and its subscriber base grew to 177 000 homes. The number of page views for the M-Web website increased from 10 million in September 1998 to 18 million in September 1999. This growth has resulted in M-Web investing strongly in additional infrastructure, which will continue until critical mass is achieved. Development losses for the period amounted to R132 million.

FINANCIAL RESULTS
Development costs in MIH and M-Web resulted in a headline deficit of R72 million, of which R59 million is attributable to the group's increased interest in MIH and M-Web. Group finance costs increased to a net R94 million, largely as a result of the capitalisation of satellite transmission equipment.

Net exceptional profits of R1,2 billion were recorded. These arose mainly from the listing of MIHL and the disposal of Orbicom (R203 million).

Net income attributable to Naspers' shareholders amounted to R598 million.

PROSPECTS
Naspers is committed to a strategy of rapidly developing its electronic media operations, technology and internet businesses, while the process of upgrading continues in the newspaper and magazine businesses. While this strategy will impact negatively on group earnings in the short term, the value created should prove beneficial to shareholders over the long term. The electronic media business continues to focus on three core areas - television platforms, technology and the internet:

• Television platforms: The group has a leading position in sub-Saharan Africa, the Mediterranean region and Thailand. Development in Asia continues, with continued growth in television platforms and interactive opportunities.
• Technology: Mindport provides technology software solutions to media and internet companies worldwide. OpenTV, in which MIHL presently has a majority interest, is a world leader in digital television operating systems and develops interactive software applications.
• Internet: Two internet investments were made during the period. In South Africa MIH acquired a 13,6% interest in M-Web and in Thailand a 95% interest in the leading Thai content portal Sanook!.com.

M-Web has grown into a market leader in the internet field in South Africa and continues to expand. M-Web will invest in growing its subscriber base, as well as building content offerings and e-commerce capabilities. In so doing, substantial losses of at least the present level will continue over the next financial year.

To raise funds, M-Web is planning a rights offer to existing shareholders during the first quarter of next year. The group intends to fully support such an offer. We believe that growth at M-Web may create substantial shareholder value and is worth the considerable risk involved.

The Newspaper and Magazine divisions should continue to maintain their market positions and perform satisfactorily.

The Book Publishing division remains exposed to the education crisis and it is still too early to determine when a recovery will occur. Given these circumstances action will be taken to ensure that costs are reduced to the minimum.

YEAR 2000
The group has conducted a comprehensive review of its operations to determine if its business critical systems are year 2000 compliant. It has compiled an inventory of its hardware and software systems, prepared an impact assessment and implemented corrections and upgrades based on diagnostic testing. The group has also prepared contingency plans. In preparation for the year 2000, the group has incurred, and will incur, general staff costs, consultancy fees and other expenses, which will be absorbed by its normal operating budget.

In the provision of its services, the group relies on systems, suppliers and third parties which frequently are not controlled by it and may not all be year 2000 compliant. Year 2000 issues affecting the group's business, if not adequately addressed whether by the group, third party vendors or suppliers, could have a number of negative consequences including interruptions of the services of network operators using the group's products, damage to the group's reputation, and claims asserting liability, any of which could materially adversely affect the group's business and results of operations.

On behalf of the board:

6 December 1999

Directors
T Vosloo (Chairman), JP Bekker (Managing Director), JF Malherbe (Vice-Chairman), MJ de Vries, JP de Lange, JJM van Zyl, E Botha, LM Taunyane, LN Jonker, NP van Heerden, SJZ Pacak, BJ van der Ross, GJ Gerwel, JdT Stofberg.