Naspers full year results ended 31 March 2011

Naspers Limited (JSE: NPN) today announced results for the financial year ended 31 March 2011.


Naspers today reported an 18% increase in revenue to R33 billion for the financial year ended 31 March 2011. Trading profit grew by 7% to R5,8 billion, despite rising costs in the pay-television business and increased development spend in the internet division.

Core headline earnings, considered by the board to be a good indication of sustainable performance, were up 13% on the previous year to R6 billion or R16,12 per share. The board recommends a 15% dividend increase to 270 cents per N-share.

“We are pleased with these solid results”, said Naspers chairman, Ton Vosloo. “We continue to benefit from the global expansion of the internet industry and the resilience of our pay-television operations. Risk is reduced by a diversified portfolio and a strong balance sheet”.

The pay-television businesses experienced exceptional subscriber growth, driven largely by marketing campaigns around the Fifa 2010 World Cup. A total of 977,000 gross subscribers were added and the group now reaches around 5 million households across the African continent. Costs related to growing the subscriber base and increased competitive pressures trimmed margins. Good progress was made in increasing local content and skills.

Internet revenues continued to grow strongly. Segmental revenue advanced 47% year-on-year, whilst trading profits rose 48%. Margins improved as the benefit of economies of scale offset increased development spend.

The technology business, Irdeto, benefited from efficient management of its products and structure. Operating performance improved and the shipment of conditional access systems increased 17% on the prior year.

Print operations in South Africa delivered modest revenue growth of 9%. Advertising recovered slightly. Trading profits declined partly due to the troublesome implementation of a new enterprise resource planning system.

Naspers’ share of income from associates, including Tencent in China, Mail.ru Group in Russia and Abril in Brazil, increased 60% to R3,3 billion.

“We are re-investing in our pay-television business”, Naspers CEO Koos Bekker said. “In addition, as internet valuations have become inflated, we are focussing somewhat more on growing our operations organically and on developing our own new technologies”.

Added Naspers financial director, Steve Pacak, “As the cost of developing these businesses are expensed through the income statement, this will dampen earnings growth in the year ahead. However, we believe this strategy is sound in driving long-term growth”.