Johannesburg - Naspers, which now derives the bulk of its revenues from offshore activities, is expected to report lower earnings growth by year-end as it increases investment spend to R7 billion during the 2014 fiscal year.
The expenditure would include the expansion of digital terrestrial television (DTT) into countries such as Nigeria and Kenya. Naspers would spend about $1 million (R10m) on three DTT sites in the east African country, chief executive Koos Bekker said yesterday.
Naspers also intended to build e-commerce platforms, particularly into online classified adverts, which is a growing segment of e-commerce.
The number of daily page views across Naspers’s classified sites more than doubled to 277 million during the six months to September.
Revenue from e-commerce nearly doubled during the period to R7.9bn from R4bn, the media firm said yesterday.
In South Africa e-commerce sales had grown 40 percent year on year, according to Arthur Goldstuck, the managing director of consulting and research firm World Wide Worx.
“It all comes down to business models and operating models,” Goldstuck said.
Sales at Kalahari.com, a Naspers-owned business founded in 1998, had flattened during the past three years in the face of aggressive competition after setting the pace earlier, Goldstuck said.
As a segment, online classified advertising is highly competitive and is dominated by Gumtree and OLX.
Mobile e-commerce is growing fast, but growth is still in single digits. This is reflected in cellphone banking, which 18 months ago was growing at a rate of 3 percent a year but is currently growing at 6 percent, according to the Mobility 2014 report, which World Wide Worx and the report’s sponsor, FNB, published yesterday.
Bekker said e-commerce “will disrupt our economy”, particularly in industries such as retail and travel.
Naspers’s development spend last year was R4.3bn. The investment was made from the income statement, so it would have a “dampening effect” on earnings and cash flows by the financial year-end in March next year, the company said.
Consolidated revenue during the six months grew 28 percent to R28.8bn, largely driven by the internet business, which contributed R24.8bn, and the effects of a depreciating rand.
Associates Tencent, which is China’s largest social media platform, and Mail.ru, a Russian portal, contributed R4.4bn and R405m, respectively, to core headline earnings. Core headline earnings a share gained 16 percent to R12.48.
Pay-TV revenue, which includes DStv, increased 18 percent to R17bn over the period as the number of subscribers grew by 560 000 to 7.3 million in 48 countries on the continent. MultiChoice is the operator of GOtv, its DTT brand in eight countries in Africa with 547 000 subscriptions.
Naspers print operations reported a slight increase in revenue to R5.64bn from R5.63bn. Media24 has continuously retrenched staff over the past five years and is focusing on growing readership on its online news platforms.
Bekker said benefits were being realised from online advertising, although a limited number of consumers subscribed to Media24’s online publications.
Steve Pacak will step down as chief financial officer in June next year but he will hold a non-executive directorship on the board. Pacak will be replaced by Basil Sgourdos, currently the chief financial officer for Naspers’s MIH Holdings.
The Naspers share price has gained about 75 percent this year, making it the second best-performing stock on the Top40 index, according to Bloomberg. The share price lost 4.12 percent to close at R931.93 on the JSE yesterday. - Business Report