Acquisitions in southeast Asia beckon for Naspers
More cost cutting at print
November 27, 2009
By Thabiso Mochiko
The media group Naspers, which has a $600 million (R4.5 billion) war chest, is seeking acquisitions in southeast Asia to further expand its operations.
Naspers had had a team in southeast Asia for about a year evaluating possible opportunities, chief executive Koos Bekker said yesterday. The company was looking closely at Malaysia and Indonesia.
Last year Naspers sealed 20 of the 200 deals it evaluated.
Naspers would look at "roughly the same number" of acquisition deals as last year "and I would guess we would close about the same number. What is hard to predict is the size," Bekker said.
The acquisitions that Naspers concluded this year include a 91 percent stake in Brazilian based e-commerce business BuscaPé for about R2.6bn, an 83 percent stake in Bankier.pl, a Polish finance portal, for R145m, and other smaller acquisitions with a combined value of R245m.
Naspers posted a 6 percent increase in revenue to R13.5bn for the six months to September. Operating profit, before amortisation and other gains and losses, grew by 19 percent to R2.8bn. Core headline earnings were up 37 percent to R2.4bn, or R6.48 a share, on growth from Tencent in China and its pay-TV businesses.
Naspers said it would continue cutting costs at its local print media business, which, like rivals such as Avusa, has been hammered by a fall in advertising spend. Through Media24, Naspers owns magazines such as Drum, FinWeek and newspaper titles such as the country's biggest daily newspaper, Daily Sun.
The division, which also includes the book publishing business and print business Paarl Media, reported operating profit of R327m, down 32 percent. Revenue declined 3 percent to R4.8bn for the six months to September.
Media24's revenue was up by 2 percent to R2.8bn. Earnings before interest and amortisation was down 22 percent to R349m. Costs were scaled back by 68 percent to R32m.
The losses forced Naspers to refinance Media24's black empowerment structure by R330m.
Avusa, the owner of the Sunday Times, saw a 20 percent decline in advertising revenue in the six months to September.
Pay-TV business MultiChoice added 352 000 new subscribers to 3.7 million across Africa, including South Africa. However, Naspers financial director Steve Pacak cautioned that pay-TV margins were likely to come under pressure due to increased programming costs, which grew 22 percent to R2.9bn.
Internet revenues grew by 29 percent to R4.1bn. Operating profit rose 49 percent to R1.1bn, driven by Tencent, which increased its revenue by 79 percent to R1.045bn. Tencent benefited from its online gaming business.
"We will continue growing our internet operations organically and through acquisitions," Bekker said. The group would also accelerate investment in new products and services over the next six months.
Yesterday Naspers closed 1.4 percent lower at R283.85.
Additional reporting by Bloomberg
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