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NASPERS LIMITED
REGISTRATION NUMBER: 04/01431/06
THE AUDITED RESULTS OF THE NASPERS GROUP FOR THE YEAR ENDED 31 MARCH 1999 ARE
STATED BELOW:
INCOME STATEMENT
PRO FORMA RESTATED
31 MARCH 31 MARCH 31 MARCH
1999 1998 1998
R'M R'M R'M
REVENUES 5 689 4 220 1 816
NET OPERATING (LOSS)/INCOME (121) 17 183
EXCEPTIONAL ITEMS 748 (32) 4
FINANCING COSTS 86 56 25
541 (71) 162
INVESTMENT INCOME 15 27 12
INCOME BEFORE
TAXATION 556 (44) 174
TAXATION 77 99 72
NET INCOME FOR
THE PERIOD 479 (143) 102
OUTSIDE SHAREHOLDERS'
INTEREST 179 186 1
SHARE OF EQUITY ACCOUNTED
RESULTS (67) 35 (25)
NET INCOME ATTRIBUTABLE
TO NASPERS SHAREHOLDERS 591 78 78
HEADLINE (LOSS)/EARNINGS FOR
THE PERIOD (14) 73 75
EARNINGS PER N ORDINARY
SHARE (CENT) 515 70 70
FULLY DILUTED HEADLINE
(LOSS)/EARNINGS PER N
ORDINARY SHARE (CENT) (5) 65 67
WEIGHTED FULLY DILUTED N
ORDINARY SHARES ISSUED
(MILLION) 117,7 111,8 111,8
ABRIDGED BALANCE SHEET
PRO FORMA RESTATED
31 MARCH 31 MARCH 31 MARCH
1999 1998 1998
R'M R'M R'M
SOURCE OF CAPITAL
ORDINARY SHAREHOLDERS' EQUITY 721 930 954 OUTSIDE
SHAREHOLDERS' EQUITY 39 674 3
GENERAL PROVISION 102 102 83
DEFERRED TAX 34 51 35
NET INTEREST-BEARING LOANS 607 (714) 238
TRANSMISSION EQUIPMENT LEASES* 1 222 360 -
NON-INTEREST-BEARING
LIABILITIES** 479 164 -
3 204 1 567 1 313
EMPLOYMENT OF CAPITAL
FIXED ASSETS 2 064 1 040 423
PROGRAMME AND FILM RIGHTS** 324 79 -
INVESTMENTS AND LOANS 1 195 877 549
NET CURRENT ASSETS (379) (429) 341
CURRENT ASSETS 1 609 1 355 689
CURRENT LIABILITIES 1 988 1 784 348
3 204 1 567 1 313
* THE LEASING OF VARIOUS SATELLITE-TRANSPONDERS AND OTHER TRANS
MISSION EQUIPMENT, MOSTLY IN TERMS OF LONG-TERM CONTRACTS
** MOSTLY LONG-TERM AGREEMENTS IN TERMS OF WHICH MIH AND ITS
SUBSIDIARIES ACQUIRE RIGHTS TO FILMS AND TO PAY FOR IT ON A
CENT-PER-SUBSCRIBER BASIS.
SUPPLEMENTARY INFORMATION
RESTATED
31 MARCH 31 MARCH
1999 1998
R'M R'M
INCLUDED IN OPERATING LOSS
DIVIDENDS RECEIVED 15 12
DEPRECIATION 234 71
FINANCE COSTS 86 25
- INTEREST RECEIVED 128 47
- INTEREST PAID 214 72
INVESTMENTS AND LOANS 1 195 549
LISTED INVESTMENTS 477 345
UNLISTED INVESTMENTS 354 204
LOANS TO EMPLOYEE SHARE INCENTIVE
SCHEMES 364 -
MARKET VALUE OF LISTED INVESTMENTS 1 379 1 619
DIRECTORS' VALUATION OF UNLISTED
INVESTMENT 866 1 871
CAPITAL EXPENDITURE FOR THE PERIOD 1 959 88
COMMITMENTS AND CAPITAL EXPENDITURE 1 452 217
CAPITAL EXPENDITURE 478 196
FOREIGN EXCHANGE TRANSACTIONS 505 14
CONTINGENT LIABILITIES 54 7
TRANSPONDER LEASE COMMITMENTS 293 -
PROGRAMME RIGHTS AND COMMITMENTS 122 -
OPERATING LEASE COMMITMENTS 278 58
NET ASSET VALUE PER N ORDINARY
SHARE (CENTS) 568 854
ABRIDGED CASH FLOW
RESTATED
31 MARCH 31 MARCH
1999 1998
R'M R'M
CASH FLOW FROM OPERATIONS 182 172
INCREASE IN WORKING CAPITAL (897) (25)
DIVIDENDS PAID (24) (24)
INVESTMENT ACTIVITIES (300) (230)
FINANCING ACTIVITIES 964 (160)
FOREX TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS 175 -
NET FLOW 100 (267)
COMMENTS
NASPERS CONTINUES ITS EVOLUTION INTO AN INTEGRATED, MULTINATIONAL MEDIA
BUSINESS FOCUSING ON THE DEVELOPMENT OF THE ELECTRONIC MEDIA, TECHNOLOGY AND
THE INTERNET AND THE RENEWAL OF THE NEWSPAPER, MAGAZINE, BOOK PUBLISHING AND
EDUCATION BUSINESSES.
THE SIGNIFICANT DEVELOPMENTS OVER THE PAST YEAR WERE:
- THE WELKOM SHARE SCHEME, ONE OF THE LARGEST EMPOWERMENT INITIATIVES TO DATE
IN SOUTH AFRICA, TREBLED NASPERS' SHAREHOLDERS BY ENABLING MORE THAN 17 000
PREVIOUSLY DISADVANTAGED PEOPLE TO BECOME NASPERS SHAREHOLDERS.
- A SIGNIFICANT INVESTMENT WAS MADE IN THE RENEWAL OF THE PRINTING CAPACITY AND
INFRASTRUCTURE OF THE GROUP'S NEWSPAPERS AND MAGAZINES. THIS PROJECT WILL BE
COMPLETED IN THE YEAR AHEAD AT A TOTAL CAPITAL INVESTMENT OF ABOUT R550
MILLION, PROBABLY THE LARGEST SINGLE INVESTMENT EVER IN PRINT MEDIA IN SOUTH
AFRICA.
- AT JOHNNIC'S REQUEST AN AGREEMENT WAS CONCLUDED IN TERMS OF WHICH NASPERS
INCREASED ITS INTEREST IN MIH AND M-WEB, WHILE JOHNNIC INCREASED ITS INVESTMENT
IN M-CELL. THIS ARRANGEMENT HAD A FUNDAMENTAL IMPACT ON NASPERS' FINANCIAL
STATEMENTS AS THEY NOW FULLY CONSOLIDATE THE RESULTS OF MIH AND M-WEB.
CONSEQUENTLY, THE RESULTS FOR THE YEAR ENDED MARCH 1999 ARE NOT COMPARABLE WITH
THOSE OF PREVIOUS YEARS. THE JOHNNIC AGREEMENT ALSO RESULTED IN AN EXCEPTIONAL
PROFIT. MIH'S ACCOUNTING POLICIES WERE FURTHER ADAPTED TO BRING THEM MORE IN
LINE WITH THE INTERNATIONAL ACCOUNTING STANDARDS, WHICH DIFFER FROM THE LOCAL
ACCOUNTING METHODOLOGY.
- SEVERAL INVESTMENTS WERE MADE. A MAJORITY INTEREST IN THE BUREAU FOR
FINANCIAL ANALYSIS (BFA) WAS ACQUIRED, MCGREGOR'S ONLINE FINANCIAL SERVICES
WERE TAKEN OVER, ALONG WITH THE MAGAZINE FINANCE WEEK AND PERSKOR'S INTERESTS
IN M-NET/SUPERSPORT AND RAPPORT.
- MIH INCREASED ITS STAKE IN THE UNITED BROADCASTING CORPORATION (UBC), THE
THAILAND-BASED TELEVISION PLATFORM OPERATION, FROM 17% TO 31% AND NOW EQUITY
ACCOUNTS THIS INVESTMENT. MIH ALSO ACQUIRED TV/COM, A TECHNOLOGY COMPANY WITH
ITS HEADQUARTERS IN SAN DIEGO, AND INCREASED ITS STAKE IN OPENTV, AN
INTERNATIONAL SUPPLIER OF DIGITAL TV OPERATING SYSTEMS.
- SEVERAL INTERNET INITIATIVES WERE LAUNCHED, INCLUDING THE EXPANSION OF M-WEB
AND THE LAUNCH OF 24.COM, KALAHARI.NET AND AGRI24.COM. THIS GROUP IS CURRENTLY
THE LARGEST SERVICE PROVIDER AND INTERNET PORTAL IN AFRICA.
OPERATIONAL RESULTS
THE OPERATIONAL RESULTS FOR THE YEAR WERE CHARACTERISED BY STABLE PROFIT GROWTH
IN THE PRINT MEDIA SECTORS, CONSIDERABLE DEVELOPMENT COSTS IN THE TELEVISION
PLATFORM AND INTERNET BUSINESSES AND THE RATIONALISATION OF THE BOOK PUBLISHING
SECTOR.
IN ORDER TO CORRECTLY INTERPRET THE RESULTS AND TO ENABLE A MEANINFUL ANALYSIS,
PRO FORMA RESULTS FOR 1998 ARE TABLED AND REPRESENT PREVIOUSLY REPORTED RESULTS
ADJUSTED TO REFLECT SIMILAR ACCOUNTING TREATMENT AS THE CURRENT RESULTS. IN
ADDITION, PREVIOUS YEAR RESULTS HAVE ALSO BEEN RESTATED TO REFLECT ACCOUNTING
POLICY CHANGES MADE IN THE CURRENT YEAR.
FOR A BETTER UNDERSTANDING OF THE VARIOUS INDUSTRIES, THE MAIN SOURCES OF
REVENUE AND OPERATING INCOME FOR THE GROUP ARE REPORTED SEGMENTALLY FOR THE
FIRST TIME:
REVENUE OPERATING INCOME
PRO FORMA PRO FORMA
1999 1998 1999 1998
R'M R'M % R'M R'M %
TELEVISION PLATFORMS 3 626 2 375 53 (67) (96) 30
MAGAZINES 840 746 13 113 106 7
NEWSPAPERS 628 588 7 97 92 5
BOOKPUBLISHING AND
EDUCATION 471 481 (2) (8) (17) 53
INTERNET 124 30 (251) (70)
GROUP SERVICES - - (5) 2
5 689 4 220 35 (121) 17 -
TELEVISION PLATFORMS
THE MIH REVENUE BASE GREW TO R3,6 BILLION. THIS STRONG GROWTH OF 53% IS MAINLY
DUE TO THE INCREASE IN ITS SUBSCRIBER BASE WHICH NOW TOTALS 1,95 MILLION
HOUSEHOLDS - 1,3 MILLION ON THE AFRICAN CONTINENT AND IN THE MIDDLE EAST, 350
000 IN GREECE/ CYPRUS AND 300 000 IN THAILAND.
MIH REPORTED A REDUCTION IN OPERATING LOSSES TO R67 MILLION. IN ADDITION, THE
EQUITY ACCOUNTED LOSSES OF MIH'S JOINT VENTURES, MAINLY UBC, AMOUNTED TO R148
MILLION. M-NET/SUPERSPORT REFLECTED STEADY GROWTH IN ATTRIBUTABLE EARNINGS TO
R113 MILLION, OF WHICH NASPERS' DIRECT EQUITY ACCOUNTED SHARE WAS R29 MILLION.
MAGAZINES
THE MAGAZINE DIVISION EXPERIENCED A SATISFACTORY YEAR IN AN ENVIRONMENT
CHARACTERISED BY INCREASED COMPETITION. A STRONG FOCUS ON MARKETING DROVE
ADVERTISING SALES AND BOOSTED REVENUES BY 13%, WHILE OPERATING INCOME GREW BY
7% TO R113 MILLION. FINANCE WEEK WAS ACQUIRED DURING THE YEAR AND SUCCESSFULLY
MERGED WITH F & T WEEKLY.
THE PRINTING WORKS INSTALLED AT MONTAGUE GARDENS, CAPE TOWN, TWO YEARS AGO, ARE
RUNNING SMOOTHLY AND ACHIEVED EXCELLENT RESULTS.
NEWSPAPERS
THE NEWSPAPER DIVISION REFLECTED 7% REVENUE GROWTH, WHILE THE OPERATING INCOME
GREW TO R97 MILLION. THE DAILIES TURNED IN A SOLID PERFORMANCE, DESPITE THE
WEAK ECONOMY. FURTHER INVESTMENTS WILL BE MADE IN THE SUNDAY TITLES THIS YEAR.
A COMPREHENSIVE RENEWAL OF THE INFRASTRUCTURE FOR THE PRINTING WORKS IN
JOHANNESBURG, CAPE TOWN AND PORT ELIZABETH IS ON SCHEDULE AND WILL BE COMPLETED
TOWARDS THE END OF THIS YEAR.
BOOK PUBLISHING AND EDUCATION
THE BOOK PUBLISHING INDUSTRY HAD ANOTHER DIFFICULT YEAR IN A MARKET THAT
CONTINUES TO SUFFER FROM A LACK OF ORDERS FOR SCHOOL TEXTBOOKS.
ALTHOUGH REVENUE DECLINED BY 6%, RESTRUCTURING SAW OPERATING LOSSES REDUCED
FROM R17 MILLION TO R8 MILLION. NATIONAL PRIVATE COLLEGES, THE LEADING
LONG-DISTANCE EDUCATION SERVICE IN SOUTH AFRICA, CONTINUED TO SHOW PROGRESS AND
INCREASED ITS REVENUE BY 21%.
INTERNET
M-WEB EXCEEDED EXPECTATIONS BY GROWING ITS SUBSCRIBER BASE FROM 35 000 TO 143
000 HOUSEHOLDS OVER THE PAST YEAR. THE COMBINED PAGE VIEWS AT M-WEB PORTALS NOW
TOTAL MORE THAN 15,5 MILLION PER MONTH. THIS EXCEPTIONAL GROWTH HAS RESULTED IN
SIGNIFICANT INVESTMENTS IN INFRASTRUCTURE, WHICH WILL CONTINUE UNTIL CRITICAL
MASS IS ACHIEVED. REVENUES QUADRUPLED OVER THE YEAR TO R124 MILLION, WHILE
DEVELOPMENT LOSSES AMOUNTED TO R251 MILLION. SINCE THIS IS THE FIRST FULL
OPERATIONAL YEAR THESE RESULTS ARE NOT COMPARABLE WITH THOSE REPORTED LAST YEAR
M-CELL
NASPERS' EQUITY INTEREST IN M-CELL FOR THE CURRENT YEAR WAS R22 MILLION. IN
FUTURE NASPERS WILL ACCOUNT FOR THIS INVESTMENT ACCORDING TO DIVIDENDS RECEIVED
GROUP RESULTS
GROUP REVENUES FOR THE YEAR AMOUNTED TO R5,7 BILLION REFLECTING, ON A
COMPARABLE BASIS, AN INCREASE OF 35%. DEVELOPMENT EXPENSES IN MIH AND M-WEB
CONTRIBUTED TO A NET TOTAL OPERATING DEFICIT OF R121 MILLION FOR THE YEAR.
NET EXCEPTIONAL PROFITS OF R748 MILLION WERE REPORTED, MAINLY DUE TO A GAIN
ARISING FROM THE SWOP OF M-CELL SHARES, TERMINATION OF WARRANTY PROVISIONS,
RATIONALISATION COSTS AND A NET GAIN FROM THE SALE OF CERTAIN NON-CORE ASSETS.
FINANCING COSTS INCREASED DUE TO DEVELOPMENTS AT M-WEB AND MIH, AND THE
INVESTMENT IN THE PRINTING CAPACITY AND INFRASTRUCTURE IN THE MAGAZINE AND
NEWSPAPER DIVISIONS. NET INCOME ATTRIBUTABLE TO NASPERS SHAREHOLDERS AMOUNTED
TO R591 MILLION.
FOR THE FIRST TIME THE BALANCE SHEET REFLECTS THE COMPLETE CONSOLIDATION OF MIH
AND M-WEB. FOLLOWING THE LISTING IN NEW YORK AND AMSTERDAM OF AN MIH
SUBSIDIARY, MIH'S ACCOUNTING POLICY IS NOW MORE IN LINE WITH THE INTERNATIONAL
ACCOUNTING STANDARDS. IN COMPLIANCE WITH NEW ACCOUNTING STANDARDS, MIH NOW
REFLECTS AN AMOUNT OF R1,2 BILLION ON ITS BALANCE SHEETS FOR NEW LONG-TERM
CONTRACTS IN RESPECT OF THE LEASE OF TRANSMISSION EQUIPMENT. IN ADDITION, THERE
ARE ALSO TV PROGRAMMING CONTRACTS, COMPRISING MAINLY FILMS SHOWN ON A
CENT-PER-SUBSCRIBER BASIS.
IN ADDITION, GOODWILL TOTALLING R608 MILLION, ARISING ON MIH'S ACQUISITION OF
AN INTEREST IN UBC AND OPENTV, WAS WRITTEN OFF AGAINST THE DISTRIBUTABLE
RESERVES OF MIH.
DIVIDEND
THE BOARD WOULD LIKE TO ESTABLISH A CONSISTENT DIVIDEND PATTERN, DESPITE
FLUCTUATIONS IN EARNINGS AS REFLECTED ABOVE. ACCORDINGLY IT HAS RECOMMENDED
THAT THE ANNUAL DIVIDEND BE INCREASED TO 22 CENTS PER SHARE (PREVIOUSLY 20
CENTS PER SHARE), AND THAT NO DIVIDEND BE DECLARED ON A ORDINARY SHARES.
PROSPECTS
MIH IS COMMITTED TO A STRATEGY OF GROWING ITS EXISTING BUSINESSES
WHILE EXPLORING NEW OPPORTUNITIES IN TELEVISION PLATFORMS, THE SALES OF DIGITAL
TECHNOLOGY AND THE INTERNET IN ASIA.
MIH'S TECHNOLOGY DIVISION, MINDPORT, IS EMERGING AS AN IMPORTANT INTERNATIONAL
SUPPLIER OF COMPUTER SOFTWARE TO CLIENTS FROM AMERICA TO CHINA.
SUBSEQUENT TO YEAR-END, AN OFFSHORE SUBSIDIARY, MIH LIMITED, WAS SUCCESSFULLY
LISTED ON THE NASDAQ NATIONAL MARKET IN NEW YORK AND THE AMSTERDAM STOCK
EXCHANGE AND APPROXIMATELY US$170 MILLION WAS RAISED TO FUND THESE
OPPORTUNITIES.
WORLDWIDE, THE INTERNET CONTINUES TO CHANGE AND GROW AT A PHENOMENAL PACE. THE
SOUTH AFRICAN INTERNET MARKET HAS ALSO BEEN CHARACTERISED BY RAPID CHANGE OVER
THE PAST YEAR, A TREND WHICH IS LIKELY TO CONTINUE FOR THE NEXT FEW YEARS.
M-WEB HAS DEMONSTRATED A FLEXIBILITY WHICH HAS ALLOWED IT TO ADAPT TO THESE
CHANGES AND HAS SECURED A LEADING POSITION IN THE SOUTH AFRICAN MARKET. WHILE
THE DEVELOPMENT COSTS INCURRED IN THIS PROCESS ARE SUBSTANTIAL, AND FURTHER
LOSSES CAN BE EXPECTED FOR AT LEAST THE NEXT TWO YEARS, THE POTENTIAL TO CREATE
SHAREHOLDER VALUE REMAINS PROMISING.
THE NEWSPAPER AND MAGAZINE DIVISIONS CAN MAINTAIN THEIR MARKET POSITIONS, AND
ACHIEVE MODERATE GROWTH. BY THE END OF THE YEAR THESE DIVISIONS WILL HAVE THE
BEST PRINTING WORKS IN THE COUNTRY.
THE BOOK PUBLISHING DIVISION REMAINS EXPOSED TO THE EDUCATION CRISIS IN SOUTH
AFRICA, MAKING PLANNING IN THIS ENVIRONMENT VERY DIFFICULT.
THE DIVISION HAS UNDERGONE MAJOR RESTRUCTURING TO ADAPT TO THE CHANGED
ENVIRONMENT AND IS WELL POSITIONED TO BENEFIT FROM ANY RECOVERY.
KALAHARI.NET, AN INTERNET BOOKSTORE, WAS LAUNCHED DURING THE YEAR AND HAS
ALREADY ESTABLISHED ITSELF AS THE LARGEST SELLER OF BOOKS, VIDEOS AND MUSIC ON
THE INTERNET IN SOUTHERN AFRICA.
THE GROUP INTENDS GROWING ITS EDUCATION INTERESTS. SUBSEQUENT TO YEAR-END, THE
EMPOWERMENT GROUP, THEBE SCITECH, ACQUIRED A 35% INTEREST IN NATIONAL PRIVATE
COLLEGES.
YEAR 2000
UNITS IN THE NASPERS GROUP CONTINUE TO REVIEW THEIR OPERATIONS TO DETERMINE
WHETHER THEIR PRODUCTS, SERVICES AND CRITICAL BUSINESS SYSTEMS HAVE ACHIEVED AN
ACCEPTABLE LEVEL OF YEAR 2000 COMPLIANCE. SEVERAL EVALUATIONS HAVE BEEN
UNDERTAKEN AND ADAPTATIONS INTRODUCED. THE GROUP RELIES, IN THE PROVISION OF
ITS SERVICES, ON SYSTEMS, SUPPLIERS AND THIRD PARTIES WHICH, FREQUENTLY, ARE
NOT CONTROLLED BY THE GROUP. THESE MAY NOT BE YEAR 2000 COMPLIANT AND MAY HAVE
AN ADVERSE EFFECT ON THE GROUP'S BUSINESS.
ON BEHALF OF THE BOARD:
T VOSLOO JP BEKKER
CHAIRMAN MANAGING DIRECTOR
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, JDUT STOFBERG
THESE RESULTS ARE ON THE INTERNET AT HTTP://WWW.NASPERS.COM/NASPERS1/YEAR_99.HT
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