Naspers pounces on web
Firm targets internet business successes in expansion plan
July 1, 2009
By Thabiso Mochiko
Media group Naspers is on the brink of concluding several small deals as it forges ahead with its strategy of expanding in emerging markets. It wants to add more internet businesses to its stable.
"Some (deals) are just small little bolt-ons to improve services, some may be stand-alone propositions," chief executive Koos Bekker said yesterday, according to Bloomberg.
Its current internet operations delivered R7.3 billion in revenues for the year to March, reflecting a compound annual growth of 87 percent.
The firm's internet business was lifted by a strong performance from existing businesses and the inclusion of new western European acquisitions Allegro and Ricardo, previously known as Tradus.
Naspers had made an offer to buy Warsaw-listed financial portal Bankier for about R156 million.
The firm said: "Emerging markets still provide better growth prospects relative to developed markets. In the aggregate and at consumer level, they were under pressure, but fared better than developed economies."
Its internet operations, which contributed 21 percent to group revenue of R27bn, and the company's pay TV operation MultiChoice have been resilient in the challenging economic market.
An analyst, who did not want to be named, said Allegro and Ricardo had not performed well. "There is a big amortisation in the internet business.
"As a stand-alone business in euro currency terms, it's more profitable."
MultiChoice's revenue rose 29 percent to R14.8bn, owing to subscriber growth.
It now reaches 3.3 million households across the African continent.
The business contributes 44 percent to Naspers revenue.
However, the costs of programming jumped 26 percent to just more than R5bn.
Margins fell from 34 percent to 32 percent because of decoder subsidies, investment in premium content, increased sports rights and additional costs for the customer service centre as the the group prepared for rivalry from firms such as On Digital Media.
Naspers's print media division, which includes newspaper titles such as Daily Sun, City Press and Beeld as well as magazine titles such as Drum and FinWeek, experienced flat advertising revenue growth.
This division delivered subdued revenue growth of 6 percent to R5.6bn, helped by increases in cover prices.
As advertising comprised 16 percent of the group's total revenue base, the downturn had a limited impact on aggregate results, said Naspers.
Low advertising forced it to lay off staff.
Shares gained 3.31 percent to R203 on the JSE yesterday.
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