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NASPERS LIMITED
(REGISTRATION NUMBER: 1925/001431/06)
("NASPERS")
INTERIM REPORT
THE UNAUDITED RESULTS OF THE NASPERS GROUP FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2000 ARE STATED BELOW:
COMMENTARY
GROUP REVENUES FOR THE PERIOD AMOUNTED TO R4,2 BILLION, AN AGGREGATE INCREASE
OF 26%. EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (EBITDA)
AMOUNTED TO A NEGATIVE R115 MILLION, BECAUSE OF AGGRESSIVE INTERNET AND
TECHNOLOGY DEVELOPMENT EXPENDITURE.
EXCEPTIONAL PROFITS OF R3,5 BILLION WERE REALISED. NET INCOME ATTRIBUTABLE TO
NASPERS SHAREHOLDERS AMOUNTED TO R1,3 BILLION, COMPARED TO LAST YEAR'S R598
MILLION. HEADLINE LOSSES WERE R192 MILLION, WHICH EQUATE TO 129C PER SHARE
COMPARED TO 56C LAST YEAR. ON 30 SEPTEMBER 2000, THE GROUP HAD NET CONSOLIDATED
CASH RESOURCES OF R2,7 BILLION, MOST OF WHICH RESIDED IN MIHL, THE
NASDAQ-LISTED GROUP.
OPERATIONAL HIGHLIGHTS FOR THE PERIOD INCLUDE:
* MIH LIMITED (MIHL) CONCLUDED A SECONDARY OFFERING OF SHARES AND RAISED $175
MILLION. THESE FUNDS WILL BE USED PRIMARILY TO FUND DEVELOPMENTS IN ASIA.
* OPENTV CONCLUDED ITS MERGER WITH SPYGLASS INC. THIS MERGER ADDS INTERNET
FUNCTIONALITY AND A COMPREHENSIVE SUITE OF WIRELESS TECHNOLOGIES TO THE OPENTV
PRODUCT OFFERING. THE MERGER RESULTED IN AN EXCEPTIONAL PROFIT OF R2,7 BILLION.
* INTERNET BUSINESSES WERE LAUNCHED IN CHINA AND INDONESIA, WHILE MARKET
LEADERSHIP WAS MAINTAINED IN THAILAND AND SOUTH AFRICA.
* THE PRINT MEDIA MAINTAINED OR GREW MARKET SHARE, BUT INDIFFERENT MARKET
CONDITIONS ARE LIMITING PROFIT GROWTH.
* THE PAY-TV BUSINESSES PERFORMED STEADILY, WHILE MAKING THE GRADUAL TRANSITION
FROM ANALOGUE TO DIGITAL TECHNOLOGIES.
SEGMENTAL PERFORMANCE
REVENUE
SIX MONTHS ENDED 30 SEPT SIX MONTHS ENDED 30 SEPT
2000 1999 % 2000 1999 %
R'M R'M CHANGE R'M R'M CHANGE
TELEVISION PLATFORMS 2 147 1 880 14 156 105 49
PRINT MEDIA 973 891 9 170 154 10
INTERNET 188 98 92 (295) (172) (72)
TECHNOLOGY 405 271 49 (157) (44) (257)
BOOK PUBLISHING 174 143 22 (14) (15) 7
PRIVATE EDUCATION 275 28 * 31 (14) *
CORPORATE SERVICES - - - (6) (6) -
4 162 3 311 26 (115) 8 -
* NOT COMPARABLE
TELEVISION PLATFORMS
REVENUES GREW BY 14% TO R2,1 BILLION, LARGELY DUE TO INCREMENTAL GROWTH IN THE
SUBSCRIBER BASE, WHICH NOW TOTALS 2,1 MILLION HOUSEHOLDS. OF THESE, 1,4 MILLION
ARE ON THE AFRICAN CONTINENT AND THE MIDDLE EAST, 346 000 IN GREECE/CYPRUS AND
348 000 IN THAILAND. THE MIGRATION FROM ANALOGUE TO DIGITAL SERVICES GATHERED
PACE IN ALL MARKETS AND DIGITAL REVENUES NOW EXCEED REVENUES FROM ANALOGUE
SUBSCRIBERS. IMPROVED OPERATING MARGINS AND THE CAPITALISATION OF SATELLITE
TRANSPONDER LEASES RESULTED IN EBITDA GROWING BY 49% TO R156 MILLION.
M-NET/SUPERSPORT REPORTED ATTRIBUTABLE EARNINGS OF R67,9 MILLION, OF WHICH
NASPERS' EQUITY ACCOUNTED SHARE WAS R19,4 MILLION. IN ADDITION THE GROUP'S
SHARE OF UBC THAILAND'S REPORTED ATTRIBUTABLE LOSSES WAS R48 MILLION.
PRINT MEDIA
OVERALL, PRINT MEDIA REVENUES GREW BY 9% TO R973 MILLION. REVENUES FROM THE
PAARL POST WEB TRANSACTION WERE CONSOLIDATED FOR THE FIRST TIME AND, ADJUSTING
FOR THIS FACTOR, SHOWS THAT REAL GROWTH WAS A MODEST 6%. MARKET CONDITIONS WERE
INDIFFERENT OVER THE YEAR, WITH AGGREGATE CIRCULATION STABLE, BUT THE DEMAND
FOR ADVERTISING SOFTENING. A NEW WOMEN'S HEALTH MAGAZINE, SHAPE, WAS LAUNCHED.
INTERNET
THE INTERNET REMAINS THE GROUP'S FASTEST GROWING BUSINESS WITH REVENUES
INCREASING BY 92% OVER THE PERIOD.
SOUTH AFRICA: M-WEB STRENGTHENED ITS POSITION AS THE LEADING SOUTH AFRICAN
ONLINE SERVICE PROVIDER, CONTENT PORTAL AND CORPORATE E-BUSINESS ENABLER. WITH
MORE THAN 36 MILLION MONTHLY PAGE VIEWS, 850 000 UNIQUE VISITORS AND 256 000
PAYING SUBSCRIBERS, M-WEB IS AFRICA'S PREMIER INTERNET EXPERIENCE.
THAILAND: M-WEB IS THE LEADING INTERNET COMPANY IN THAILAND, WITH MORE THAN
140 000 PAYING SUBSCRIBERS AND MORE THAN 300 000 UNIQUE VISITORS AND 100
MILLION PAGE VIEWS PER MONTH. IT GREW ITS POSITION AS THE LEADING INTERNET
CONTENT PORTAL, PROVIDING SUPERIOR TOOLS AND SERVICES, WITH LARGE LOCAL
COMMUNITIES.
CHINA: THE GROUP IS OPTIMISTIC ABOUT THE OPPORTUNITIES OFFERED BY THIS
RAPIDLY GROWING INTERNET MARKET. WHILE GREATER CLARITY IS GRADUALLY DEVELOPING,
THE REGULATORY ENVIRONMENT REMAINS UNCERTAIN. CHINA'S ENTRY INTO THE WORLD
TRADE ORGANISATION (WTO) IS PROGRESSING AND IS EXPECTED TO HAVE A MAJOR IMPACT
ON THE STRUCTURE OF THE INTERNET AND TELECOMMUNICATIONS ENVIRONMENTS.
HOWEVER, WHILE THE CURRENT UNCERTAIN REGULATORY CLIMATE PREVAILS, A PRUDENT
APPROACH WILL BE ADOPTED.
M-WEB HAS LAUNCHED A CHINESE PORTAL AND INVESTED IN 21 VIANET, AN ONLINE
SERVICE PROVIDER, EEFOO, A FINANCIAL PORTAL, AND SPORTS CN, A SPORTS SITE. THE
M-WEB PORTALS IN CHINA NOW RECEIVE 95 MILLION PAGE VIEWS PER MONTH.
INDONESIA: M-WEB INDONESIA WAS RECENTLY ESTABLISHED THROUGH THE ACQUISITION OF
AN ISP AND A CONTENT PORTAL. WITH A POPULATION OF MORE THAN 210 MILLION,
INDONESIA PRESENTS A POTENTIALLY LUCRATIVE INTERNET BUSINESS OPPORTUNITY. MORE
INVESTMENTS WILL FOLLOW IN DUE COURSE.
THE GROUP IS AWARE OF THE SUBSTANTIAL RISKS ASSOCIATED WITH THE LONG-TERM
NATURE OF INTERNET INVESTMENT AND WILL CONTINUE TO EVALUATE THE NATURE AND
EXTENT OF EXPENDITURE IN THE DEVELOPMENT OF ITS INTERNET BUSINESSES.
TECHNOLOGY
REVENUES FROM OUR TECHNOLOGY BUSINESSES GREW SIGNIFICANTLY BY 49% TO R405
MILLION.
OPENTV REINFORCED ITS POSITION AS WORLD LEADER IN ITS MARKET, AND PRESENTLY HAS
11 MILLION DIGITAL DECODERS INSTALLED WITH ITS RUNTIME SYSTEM BY 35 NETWORK
OPERATORS IN 50 COUNTRIES.
MINDPORT IBS AGREED TO MERGE WITH NOOCHEE SOLUTIONS INC, AN INTERNET
INFRASTRUCTURE AND APPLICATION SOFTWARE COMPANY. THE COMBINED ENTITY WILL BE
STRATEGICALLY REPOSITIONED TO ADDRESS THE EMERGING BROADBAND MARKET.
BOOK PUBLISHING
AFTER THE TRAVAILS THAT THIS INDUSTRY SUFFERED OVER THE PAST THREE YEARS, IT IS
PLEASING TO NOTE SIGNS OF RECOVERY. REAL REVENUE GROWTH OF 11% WAS RECORDED AND
THE INCLUSION OF LUX VERBI FOR THE FIRST TIME INCREASED REVENUE GROWTH TO 22%.
DEVELOPMENT OF THE INTERNET-BASED BOOKSTORE, KALAHARI.NET, CONTINUED.
PRIVATE EDUCATION
OUR EDUCATION BUSINESSES HAVE NOW MERGED WITH THOSE OF EDUCOR AND,
CONSEQUENTLY, COMPARISON WITH THE PREVIOUS YEAR IS MEANINGLESS.
PROSPECTS
* PAY-TV MARKETS:
A STEADY PERFORMANCE IS EXPECTED FOR THE REST OF THE FINANCIAL YEAR. THE
STRENGTH OF THE US DOLLAR IS A CONCERN IN SEVERAL OF OUR OPERATING MARKETS, AND
WILL NECESSITATE COST SAVING MEASURES AND PRICE INCREASES.
* PRINT MEDIA:
TRENDS IN ADVERTISING EXPENDITURE IN THE SA MARKET PROVED UNPREDICTABLE IN THE
FIRST HALF OF THE YEAR. IT IS NOT CLEAR WHETHER THE RECENT HEAVY CONSUMER
SPENDING ON STATE GAMBLING, CELLPHONES AND MICROLENDING HAVE BEEN FULLY
ABSORBED, OR WILL CONTINUE TO DISTORT THE MARKET. CIRCULATION SHOULD REMAIN
STEADY.
* BOOK PUBLISHING:
IN THE SHORT-TERM A HEALTHY PERFORMANCE IS EXPECTED. HOWEVER, IN A TIME FRAME
OF TWO TO FOUR YEARS THE INTERNET WILL START IMPACTING ON THIS MARKET DIRECTLY,
WITH DIGITAL DELIVERY OF ACADEMIC AND LOW VOLUME, NON-GLOSSY BOOKS BECOMING A
REALITY.
* PRIVATE EDUCATION:
UNDER ITS PREVIOUS OWNERSHIP STRUCTURE THE VARIOUS BUSINESSES OF EDUCOR WERE
ACQUIRED PIECEMEAL FROM ENTREPRENEURS AND NEVER FULLY INTEGRATED. THIS PROCESS
WILL NOW COMMENCE. THE TRANSITION FROM A PAPER AND BLACKBOARD METHODOLOGY TO
USING THE INTERNET RECENTLY BEGAN, AND WILL ENTAIL SUBSTANTIAL START-UP COSTS.
* TECHNOLOGY:
A CONTINUATION OF RAPID GROWTH IS EXPECTED.
* INTERNET:
WIDE SWINGS IN INVESTOR SENTIMENT REGARDING THIS SECTOR MAY WELL CONTINUE. WE
INTEND TO PLOUGH STEADILY AHEAD REGARDLESS OF THE PREVAILING WISDOM OF THE
MOMENT. IT IS CLEAR THAT THE INTERNET WILL BRING ABOUT MASSIVE CHANGES IN THE
WORLD ECONOMY, AND TRANSFORM ALL THE SECTORS OF THE MARKET IN WHICH WE ARE
ACTIVE. NEW INVESTMENTS WILL BE MADE, AND A GROWTH IN TURNOVER, WITH
SUBSTANTIAL DEVELOPMENT COSTS, IS FORECAST.
ACCOUNTING POLICIES
THESE ABRIDGED CONSOLIDATED INTERIM FINANCIAL STATEMENTS WERE PREPARED IN
ACCORDANCE WITH AC127 INTERIM FINANCIAL REPORTING. THE SAME ACCOUNTING POLICIES
AND METHODS OF COMPUTATION HAVE BEEN FOLLOWED IN THIS INTERIM REPORT AS IN THE
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2000, EXCEPT FOR THE
ADOPTION OF AC129 AND AC131 FOR THE TREATMENT OF INTANGIBLE ASSETS AND
GOODWILL. PREVIOUSLY, GOODWILL AND INTANGIBLE ASSETS WERE WRITTEN OFF IN FULL
AGAINST ATTRIBUTABLE RESERVES ON ACQUISITION. AS FROM 1 APRIL 2000, INTANGIBLES
AND GOODWILL ARE STATED AT HISTORICAL COST AND AMORTISED THROUGH THE INCOME
STATEMENT ON A STRAIGHT-LINE BASIS OVER THE PERIOD OF EXPECTED BENEFIT. THESE
CHANGES IN ACCOUNTING POLICIES WILL SUBSTANTIALLY DECREASE PROFITABILITY IN THE
YEARS AHEAD AND WILL INCREASE INVESTORS' FOCUS ON EBITDA AS A MEASURE TO
PROPERLY ASSESS THE OPERATIONAL PERFORMANCE OF THE GROUP.
ON BEHALF OF THE BOARD:
TON VOSLOO KOOS BEKKER
CHAIRMAN MANAGING DIRECTOR
DIRECTORS
T VOSLOO (CHAIRMAN), JF MALHERBE (VICE-CHAIRMAN), JP BEKKER (MANAGING
DIRECTOR), E BOTHA, MJ DE VRIES, GJ GERWEL, LN JONKER, SJZ PACAK, JDT
STOFBERG, LM TAUNYANE, BJ VAN DER ROSS, NP VAN HEERDEN, JJM VAN ZYL.
COMPANY SECRETARY: GM COETZEE
NASPERS LIMITED
ABRIDGED INCOME STATEMENT
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
REVENUE 4 162 3 311 7 146
EARNINGS BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION (EBITDA) (115) 8 7
DEPRECIATION (231) (170) (362)
AMORTISATION (223) - -
LOSS BEFORE INTEREST AND TAXATION (569) (162) (355)
FINANCE COSTS (49) (73) (154)
INCOME FROM INVESTMENTS - - 3
SHARE OF EQUITY-ACCOUNTED RESULTS (22) (11) (6)
EXCEPTIONAL ITEMS 3 537 1 203 4 743
PROFIT BEFORE TAXATION 2 897 957 4 231
TAXATION (26) (14) (60)
MINORITY INTEREST (1 565) (345) (665)
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS 1 306 598 3 506
HEADLINE LOSS FOR THE PERIOD (R'M) (192) (72) (145)
EARNINGS PER N ORDINARY SHARE (CENTS) 881 471 2 700
HEADLINE LOSS PER N ORDINARY SHARE (CENTS) (129) (56) (111)
FULLY DILUTED EARNINGS PER N ORDINARY
SHARE (CENTS) 853 462 2 596
DIVIDEND PER N ORDINARY SHARE (CENTS) - - 24
NUMBER OF SHARES ISSUED ('000):
- WEIGHTED AVERAGE
FULLY DILUTED WEIGHTED AVERAGE 148 262 126 982 129 851
153 868 130 986 135 457
NASPERS LIMITED
ABRIDGED BALANCE SHEET
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
ASSETS
NON-CURRENT ASSETS 11 812 4 232 5 147
PROPERTY, PLANT AND EQUIPMENT 3 001 2 072 2 448
GOODWILL AND OTHER INTANGIBLES 5 912 - -
INVESTMENTS AND LOANS 1 813 1 528 1 783
PROGRAMME AND FILM RIGHTS 1 017 632 833
DEFERRED TAXATION 69 - 83
CURRENT ASSETS 6 342 2 952 4 793
TOTAL ASSETS 18 154 7 184 9 940
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES 3 287 1 229 1 804
MINORITY INTEREST 7 802 776 1 503
NON-CURRENT LIABILITIES 3 197 2 371 3 066
TRANSMISSION EQUIPMENT LEASES 1 532 1 067 1 082
LOANS - INTEREST-BEARING
- NON-INTEREST-BEARING 500 571 843
955 597 949
POST-RETIREMENT BENEFIT LIABILITY 114 100 116
DEFERRED TAXATION 96 34 76
CURRENT LIABILITIES 3 868 2 808 3 567
TOTAL EQUITY AND LIABILITIES 18 154 7 184 9 940
NET ASSET VALUE PER N ORDINARY
SHARE (CENTS) 2 217 968 1 217
NASPERS LIMITED
ABRIDGED STATEMENT OF CHANGES IN EQUITY
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
BALANCE AT BEGINNING OF PERIOD 1 804 721 721
SHARE CAPITAL AND PREMIUM ISSUED - - 1 452
FOREIGN CURRENCY TRANSLATION 116 (10) 10
CURRENT PERIOD WRITE-OFFS
- GOODWILL AND OTHER INTANGIBLES - (80) (3 859)
- DEFERRED TAXATION - - 9
ADJUSTMENTS TO PRIOR YEAR GOODWILL 61 - -
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS 1 306 598 3 506
DIVIDENDS - - (35)
BALANCE AT END OF PERIOD 3 287 1 229 1 804
ABRIDGED CASH FLOW STATEMENT
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
CASH (UTILISED IN)/AVAILABLE FROM OPERATIONS (372) 99 313
DIVIDENDS PAID (35) (28) (28)
CASH FLOW FROM OPERATING ACTIVITIES (407) 71 285
CASH FLOW FROM INVESTMENT ACTIVITIES (355) (795) (1 583)
CASH FLOW FROM FINANCING ACTIVITIES 1 028 1 358 3 582
NET MOVEMENT ON CASH AND CASH EQUIVALENTS 266 634 2 284
ANALYSIS OF EXCEPTIONAL ITEMS
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
PROFIT ON SALE OF INVESTMENTS 125 238 2 976
PROFIT ON DILUTION OF SUBSIDIARIES 3 415 959 1 796
ASSET IMPAIRMENTS AND WRITE-OFFS (3) - (13)
WARRANTIES IN RESPECT OF BUSINESS DISPOSALS - - (22)
SHARE OF EQUITY ACCOUNTED EXCEPTIONAL ITEMS - 6 6
GROSS EXCEPTIONAL ITEMS 3 537 1 203 4 743
MINORITIES AND TAXATION (1 998) (533) (1 092)
NET EXCEPTIONAL ITEMS 1 539 670 3 651
CALCULATION OF HEADLINE LOSS
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS 1 306 598 3 506
ADJUSTED FOR:
- EXCEPTIONAL ITEMS (1 539) (670) (3 651)
- AMORTISATION OF GOODWILL 41 - -
HEADLINE LOSS (192) (72) (145)
SUPPLEMENTARY INFORMATION
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
UNAUDITED UNAUDITED AUDITED
R'M R'M R'M
DIVIDENDS RECEIVED - - 3
FINANCE COSTS 49 73 154
- INTEREST RECEIVED (131) (46) (125)
- INTEREST PAID 158 109 255
- NET FOREIGN EXCHANGE DIFFERENCES 22 10 24
INVESTMENTS AND LOANS 1 813 1 528 1 783
- LISTED INVESTMENTS 249 606 265
- UNLISTED INVESTMENTS 578 405 702
- LOANS TO SHARE INCENTIVE SCHEMES 986 517 816
MARKET VALUE OF LISTED INVESTMENTS 1 026 1 855 1 695
DIRECTORS' VALUATION OF UNLISTED
INVESTMENTS AND LOANS
872 563 1 116
COMMITMENTS 731 470 1 074
- CAPITAL EXPENDITURE AUTHORISED 247 136 461
- PROGRAMME AND FILM RIGHTS 195 56 259
- NETWORK COMMITMENTS 239 267 272
- DECODER COMMITMENTS 50 11 82
OPERATING LEASE COMMITMENTS 1 143 596 1 193
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