Wrap Text
The reviewed results of the Naspers group
for the six months to 30 September 2013
Naspers Limited
(Registration number: 1925/001431/06)
("Naspers")
Share code: NPN ISIN: ZAE000015889
LSE ADS code: NPSN ISIN: US 6315121003
Interim report
The reviewed results of the Naspers group
for the six months to 30 September 2013
Commentary
Naspers now earns the majority of its revenues, including associates, offshore instead of in South Africa, and from the
internet businesses instead of pay television.
Over the past six months, the group achieved 28% top-line growth as we expanded operations. Core headline earnings per
share grew by 16%. We caution, though, that over the next six months an acceleration of investment into growth areas will
lower earnings.
We are building ecommerce platforms, in particular online classifieds. In addition, we are rolling out digital terrestrial
television (DTT) across many cities in Africa. The pace of investment in these opportunities will accelerate sharply in the
second half of the current financial year. We expect development spend to exceed R7bn for the full financial year to March
2014, compared to R4,3bn last year.
As this investment is largely made through the income statement, it will have a dampening effect on both earnings and cash
flows in the second half of the current financial year and, cumulatively, for the year as a whole.
FINANCIAL REVIEW
Consolidated revenues grew 28% to R28,8bn, driven to a large extent by our internet businesses and boosted by a
depreciating rand. Expanding our ecommerce and DTT operations as outlined above has resulted in development spend
accelerating by 87% compared to the same period last year (R3bn vs R1,6bn). As a consequence, our consolidated trading
profits were down 15% compared to last year.
Net interest on borrowings has increased to R507m (2012: R277m), mainly due to a depreciation of the rand, as well as
increased borrowings.
Both Tencent and Mail.ru reported good growth and contributed R4,4bn and R405m, respectively, to core headline
earnings. Our share of equity-accounted results includes gains of R1,3bn flowing from Mail.ru's sale of shares in Facebook
and Qiwi. This has been excluded from core headline earnings.
An impairment charge of R1,1bn has been recognised in other gains/losses and relates mainly to some fashion
businesses in our ecommerce segment, including FashionDays and Markafoni. We impaired some goodwill and other
intangibles.
A theoretical dilution loss of US$84m on our equity-accounted investments was booked, mainly stemming from Tencent
buying back its own shares.
As a net result of these activities, core headline earnings grew 16% to R12,48 per N ordinary share. Free cash flow for the
period was R787m.
Consolidated balance sheet gearing stands at a healthy 20%, excluding transponder leases and non-interest bearing
liabilities.
Any forecasts in this interim report have not been reviewed or reported on by the company's external auditor.
SEGMENTAL REVIEW
This segmental review reflects consolidated subsidiaries, plus a proportional consolidation of associated companies and
joint ventures.
Internet
In the aggregate, revenues across all our internet platforms grew 76% to R24,9bn. The step-up in development spend in this
segment resulted in slower trading profit growth of 24% to R3,9bn.
Tencent:
Performed well, despite a more competitive environment. The core businesses made progress in advertising, mobile
and ecommerce initiatives. Monthly active instant-messaging accounts were around 816m, whilst the combined monthly
active users of WeChat and Weixin increased to 272m. The launch of integrated mobile games on Weixin and Mobile QQ
generated lively user interest. Given growth opportunities in Chinese ecommerce, Tencent is investing in regional and
category expansion.
Mail.ru:
Investing in product development across several of its business units. Its online advertising and games businesses drove
growth. The Mail.ru portal now attracts 33m unique Russian users and expanded its mobile product offering and audience.
Ecommerce:
This segment is growing well with revenues almost doubling to R7,9bn. We are investing aggressively in marketing, people
and product. Development spend was R2,3bn with trading losses of R1,8bn.
Our classifieds businesses in most markets, Brazil and India in particular, widened their leadership over competitors on key
metrics. We now have 277m daily page views across various classifieds sites, a more than two fold increase year on year.
Engagement with users is also growing. Over the next six months we intend to step up further.
The etailing segment saw revenue growth as we broaden categories and improve our fulfilment and delivery capabilities.
We responded to some lagging flash-sales fashion units by impairing some investments and are repositioning them to
include in-season, full-price merchandise.
Our price comparison businesses are growing ahead of market and are looking to deepen their relationship with both
buyers and sellers. We have consolidated our online payment businesses under a single brand, PayU. Average daily payment
value processed across our platforms grew approximately 82% since last year.
Pay television
This business grew revenues 18% to R17,1bn. The subscriber base increased by a net 560 000 and now totals 7,3m
households in 48 countries in Africa. However, as a consequence of the development of DTT services, trading profits inched
ahead only 11% to R4,5bn.
Locally, M-Net launched two new local content channels, Mzansi Wethu and Mzansi Bioskop, showcasing South African
content. The DStv service was boosted with several new channels, including Telemundo, ANN7, M-Net Series Showcase,
M-Net Series Reality, M-Net Series Zone, kykNET en Kie and M-Net Movies Zone.
We launched our next-generation high-definition PVR decoder, Explora, with an improved hard drive, expanded video-on-
demand capability and a livelier user interface.
Outside South Africa the expansion of the DTT service under the GOtv brand continues and we now operate in eight
countries. The DTT subscriber base grew to 547 000 paying households.
Print media
This industry continues to experience difficult conditions globally. Overall our print businesses saw flat revenues, but most
remain profitable due to cost reductions. We wrote down our investment in Abril, the Brazilian magazine publisher, by
R750m.
Directorate
On 16 October 2013 Messrs Craig Enenstein, Don Eriksson, Roberto Oliveira de Lima and Yuanhe Ma were appointed
independent non-executive directors of Naspers, and Cobus Stofberg was appointed a non-executive director. All of them
previously served on the board of Naspers's subsidiary MIH Holdings (Pty) Limited. On the same date, after many years
of excellent service on the board, Messrs Lourens Jonker, Neil van Heerden and Prof Hein Willemse stepped down as
directors. On 21 November 2013 Mr Lambert Retief (non-executive) stepped down from the board. We wish to thank them
for their profound devotion and commitment. On 22 November 2013 Mr Nolo Letele was appointed as a non-executive
director. Messrs Ton Vosloo (non-executive chair) and Koos Bekker (executive director and CEO) have agreed, at the board's
request, to stay in their present positions.
The abridged curricula vitae of all directors may be found on Naspers's website www.naspers.com.
Steve Pacak (executive director and CFO) will retire as CFO on 30 June 2014, but will remain on the board as a non-executive
director. Basil Sgourdos, presently CFO of Naspers's subsidiary MIH Holdings (Pty) Ltd, will succeed Steve Pacak.
BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The interim report is prepared in accordance with the requirements of the JSE Limited Listings Requirements and the South
African Companies Act No 71 of 2008. The Listings Requirements require interim reports to conform with the framework
concepts, the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and must also, as a minimum, contain
information required by IAS 34 Interim Financial Reporting.
Except as noted below, accounting policies used for the interim results are consistent with those applied during the previous
financial year. The group has adopted all the new, revised or amended accounting pronouncements as issued by the IASB,
which were effective for financial years commencing on 1 April 2013. The following key new pronouncements have been
adopted:
IFRS 10 Consolidated Financial Statements
The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements
when an entity controls other entities. The group has adopted the principles of IFRS 10 as a new accounting policy and
applied these principles in the preparation of the group's consolidated financial statements. The adoption of IFRS 10 did not
result in any material change in the consolidation of the group.
IFRS 11 Joint Arrangements
IFRS 11 requires that the group applies equity accounting for joint ventures and eliminates the proportionate consolidation
option. Previously, the group proportionately consolidated its joint ventures, which required that it included its share of
assets, liabilities, income and expenses of joint ventures on a line-by-line basis in the consolidated financial statements.
Under the equity method, the investments in joint ventures are initially recognised at cost and the carrying amounts are
increased or decreased to recognise the group's share of the profit or loss and movements in other comprehensive income
of joint ventures after the acquisition date. The group's share of the profit or loss of joint ventures is now recognised
as a single line item in the income statement under the equity method. The new policy has been applied in accordance
with the transitional provisions of IFRS 11. The change in accounting policy has been applied from 1 April 2012 with the
group recognising its investment in joint ventures as the net carrying amounts of the assets and liabilities previously
proportionately consolidated. This is the deemed cost of the group's investments in its joint ventures for purposes of
applying equity accounting. This change in accounting policy resulted in a change in individual asset, liability, income,
expense and cash flow line items with no impact on equity or profit attributable to shareholders.
IFRS 13 Fair Value Measurement
IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source
of fair value measurement and disclosure requirements for use across IFRS. IFRS 13 was adopted and applied prospectively
and it was assessed that the adoption did not result in any material impact on the financial results of the group.
These interim results have been reviewed by the company's auditor, PricewaterhouseCoopers Inc., whose unqualified report
is available for inspection at the registered office of the company. The auditor's report does not necessarily cover all
information contained in this interim report. Shareholders are therefore advised that in order to obtain a full understanding
of the nature of the auditor's work, they should obtain a copy of that report, together with the accompanying financial
information from the registered office of the company.
Trading profit excludes amortisation of intangible assets (other than software), equity-settled share-based charges,
retention option expenses and other gains/losses, but includes the finance cost on transponder leases.
Core headline earnings exclude once-off and non-operating items. We believe it is a useful measure of the group's sustainable
operating performance. However, this is not a defined term under IFRS and may not be comparable with similarly titled
measures reported by other companies.
The preparation of the financial results was supervised by the financial director, Steve Pacak, CA(SA). These results were
made public on 26 November 2013.
SUBSEQUENT EVENTS
No significant events have occurred between the period end and the date of this interim report.
On behalf of the board
Ton Vosloo Koos Bekker
Chair Chief executive
Cape Town
26 November 2013
Revenue
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Segmental Reviewed Reviewed % Audited
review R'm R'm Change R'm
Internet 24 887 14 108 76 34 587
– Tencent 15 285 8 978 70 20 532
– Mail.ru 1 100 721 53 1 669
– Ecommerce 7 907 3 991 98 11 433
– Other internet 595 418 42 953
Pay television 17 077 14 426 18 30 257
Print 5 642 5 638 – 11 932
Economic interest 47 606 34 172 39 76 776
Less: Equity-accounted investments (18 851) (11 767) 60 (26 907)
Consolidated 28 755 22 405 28 49 869
EBITDA
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Segmental Reviewed Reviewed % Audited
review R'm R'm Change R'm
Internet 4 748 3 661 30 7 389
– Tencent 5 839 3 986 46 8 603
– Mail.ru 601 386 56 895
– Ecommerce (1 620) (646) >(100) (1 979)
– Other internet (72) (65) (11) (130)
Pay television 5 375 4 617 16 8 933
Print 408 458 (11) 1 167
Economic interest 10 531 8 736 21 17 489
Corporate services (63) (77) (138)
Less: Equity-accounted investments (6 336) (4 364) 45 (9 565)
Consolidated 4 132 4 295 (4) 7 786
Trading profit
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Segmental Reviewed Reviewed % Audited
review R'm R'm Change R'm
Internet 3 879 3 130 24 6 163
– Tencent 5 192 3 590 45 7 702
– Mail.ru 546 342 60 798
– Ecommerce (1 779) (726) >(100) (2 192)
– Other internet (80) (76) (5) (145)
Pay television 4 477 4 020 11 7 559
Print 214 247 (13) 743
Economic interest 8 570 7 397 16 14 465
Corporate services (64) (77) (139)
Less: Equity-accounted investments (5 580) (3 858) 45 (8 414)
Consolidated 2 926 3 462 (15) 5 912
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Reconciliation of trading profit Reviewed Reviewed Audited
to operating profit R'm R'm R'm
Trading profit 2 926 3 462 5 912
Finance cost on transponder leases 173 72 231
Amortisation of intangible assets (410) (479) (996)
Other gains/(losses) – net (958) (378) (735)
Retention option expense (74) (41) (138)
Equity-settled share-based charge (36) (88) (175)
Operating profit 1 621 2 548 4 099
Note: For a reconciliation of Operating profit to Profit before taxation, refer to the "Consolidated income
statement".
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Consolidated Reviewed Reviewed Audited
income statement R'm R'm R'm
Revenue 28 755 22 405 49 869
Cost of providing services and sale of goods (15 856) (11 725) (27 676)
Selling, general and administration expenses (10 320) (7 754) (17 359)
Other gains/(losses) – net (958) (378) (735)
Operating profit 1 621 2 548 4 099
Interest received 257 224 443
Interest paid (1 055) (703) (1 495)
Other finance income/(costs) – net (117) – (258)
Share of equity-accounted results 5 139 3 990 8 778
– excluding net gain on disposal of investments 3 853 2 444 6 130
– net gain on disposal of investments 1 286 1 546 2 648
Impairment of equity-accounted investments (753) – (2 137)
Dilution losses on equity-accounted investments (836) (41) (96)
Gains/(losses) on acquisitions and disposals 614 23 (53)
Profit before taxation 4 870 6 041 9 281
Taxation (1 447) (1 383) (2 533)
Profit for the period 3 423 4 658 6 748
Attributable to:
Equity holders of the group 3 112 4 150 6 047
Non-controlling interest 311 508 701
3 423 4 658 6 748
Core headline earnings for the period (R'm) 4 920 4 127 8 533
Core headline earnings per N ordinary share (cents) 1 248 1 073 2 216
Fully diluted core headline earnings per N ordinary
share (cents) 1 215 1 034 2 164
Headline earnings for the period (R'm) 3 641 3 194 6 630
Headline earnings per N ordinary share (cents) 923 830 1 722
Fully diluted headline earnings per N ordinary
share (cents) 899 800 1 681
Earnings per N ordinary share (cents) 789 1 079 1 570
Fully diluted earnings per N ordinary share (cents) 769 1 040 1 533
Net number of shares issued ('000)
– At period end 395 883 385 414 394 272
– Weighted average for the period 394 272 384 714 385 064
– Fully diluted weighted average 404 898 399 131 394 365
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Condensed consolidated Reviewed Reviewed Audited
statement of comprehensive income R'm R'm R'm
Profit for the period 3 423 4 658 6 748
Total other comprehensive income, net of tax,
for the period* 5 313 (1 817) 1 527
Translation of foreign operations 3 750 1 090 5 292
Cash flow hedges (34) 37 237
Share of associates' and joint ventures' other
comprehensive income and reserves 1 561 (2 925) (3 946)
Tax on other comprehensive income 36 (19) (56)
Total comprehensive income for the period 8 736 2 841 8 275
Attributable to:
Equity holders of the group 8 372 2 324 7 463
Non-controlling interest 364 517 812
8 736 2 841 8 275
* These components of other comprehensive income may subsequently be reclassified to profit or loss, except for
R365m (2012: R228m) included in the Share of associates' and joint ventures' other comprehensive income and
reserves.
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Condensed consolidated Reviewed Reviewed Audited
statement of changes in equity R'm R'm R'm
Balance at beginning of the period 55 853 49 576 49 576
Changes in share capital and premium
Movement in treasury shares (245) (269) (1 695)
Share capital and premium issued 304 288 2 067
Changes in reserves
Total comprehensive income for the period 8 372 2 324 7 463
Movement in share-based compensation reserve 214 201 441
Movement in existing control business combination (52) (333) (700)
Movement in valuation reserve – – 39
Direct retained earnings movements – – (98)
Dividends paid to Naspers shareholders (1 525) (1 292) (1 291)
Changes in non-controlling interest
Total comprehensive income for the period 364 517 812
Dividends paid to non-controlling shareholders (1 034) (1 102) (1 180)
Movement in non-controlling interest in reserves 237 209 419
Balance at end of period 62 488 50 119 55 853
Comprising:
Share capital and premium 15 120 14 708 15 061
Retained earnings 29 310 25 919 27 723
Share-based compensation reserve 4 576 3 563 4 006
Existing control business combination reserve (733) (291) (688)
Hedging reserve (155) (319) (175)
Valuation reserve 2 817 2 778 1 623
Foreign currency translation reserve 9 874 2 076 6 191
Non-controlling interest 1 679 1 685 2 112
Total 62 488 50 119 55 853
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Condensed consolidated statement Reviewed Reviewed Audited
of financial position R'm R'm R'm
Assets
Non-current assets 90 304 68 227 76 120
Property, plant and equipment 15 644 12 490 13 716
Goodwill 24 609 19 577 21 593
Other intangible assets 5 738 4 304 4 802
Investments in associates 41 364 29 050 33 150
Investments in joint ventures 838 433 237
Other investments and loans 1 119 1 643 1 808
Derivatives 16 70 72
Deferred taxation 976 660 742
Current assets 30 965 22 232 27 143
Inventory 2 486 1 588 1 936
Programme and film rights 3 147 2 830 1 868
Trade receivables 5 007 4 294 4 042
Other receivables and loans 3 530 2 843 3 149
Derivatives 501 284 449
Cash and cash equivalents 16 262 10 363 15 653
30 933 22 202 27 097
Assets classified as held-for-sale 32 30 46
Total assets 121 269 90 459 103 263
Equity and liabilities
Share capital and reserves 60 809 48 434 53 741
Share capital and premium 15 120 14 708 15 061
Other reserves 16 379 7 807 10 957
Retained earnings 29 310 25 919 27 723
Non-controlling shareholders' interest 1 679 1 685 2 112
Total equity 62 488 50 119 55 853
Non-current liabilities 36 223 23 289 29 176
Capitalised finance leases 6 730 5 355 5 868
Liabilities – interest-bearing 27 225 15 455 20 571
– non-interest-bearing 463 246 276
Post-retirement medical liability 173 146 161
Derivatives 336 937 972
Deferred taxation 1 296 1 150 1 328
Current liabilities 22 558 17 051 18 234
Current portion of long-term debt 2 192 1 786 2 296
Trade payables 5 669 4 056 4 107
Accrued expenses and other current liabilities 12 245 9 484 10 228
Derivatives 875 149 180
Bank overdrafts and call loans 1 577 1 576 1 423
Total equity and liabilities 121 269 90 459 103 263
Net asset value per N ordinary share (cents) 15 360 12 567 13 630
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Condensed consolidated Reviewed Reviewed Audited
statement of cash flows R'm R'm R'm
Cash flow generated from operating activities 2 598 4 168 10 035
Cash flow utilised in investing activities (4 210) (2 726) (6 409)
Cash flow generated from/(utilised in) financing
activities 1 552 (1 483) 1 286
Net movement in cash and cash equivalents (60) (41) 4 912
Foreign exchange translation adjustments 515 180 670
Cash and cash equivalents at beginning of the period 14 230 8 648 8 648
Cash and cash equivalents at end of the period 14 685 8 787 14 230
Six months ended Year ended
30 September 31 March
2013 2012 2013
Calculation of (Restated) (Restated)
headline and core Reviewed Reviewed Audited
headline earnings R'm R'm R'm
Net profit attributable to shareholders 3 112 4 150 6 047
Adjusted for:
– insurance proceeds – – (2)
– impairment of property, plant and equipment and
other assets 24 41 97
– impairment of goodwill and intangible assets 1 063 289 588
– (profit)/loss on sale of property, plant and equipment
and intangible assets (99) (3) 17
– (gains)/losses on acquisitions and disposals of
investments (111) 4 (11)
– step-up acquisition (gain)/loss (516) 21 –
– dilution losses on equity-accounted investments 836 41 96
– remeasurements included in equity-accounted
earnings (1 286) (1 333) (2 278)
– impairment of equity-accounted investments 753 – 2 137
3 776 3 210 6 691
Total tax effects of adjustments (103) (6) (29)
Total adjustment for non-controlling interest (32) (10) (32)
Headline earnings 3 641 3 194 6 630
Adjusted for:
– equity-settled share scheme charges 429 339 850
– recognition of deferred tax assets (49) (26) (195)
– special dividend income – – (423)
– taxation adjustment – – (191)
– amortisation of intangible assets 690 583 1 403
– fair value adjustments and currency translation
differences 125 35 273
– retention option expense 72 41 135
– business combination losses/(gains) 12 (39) 51
Core headline earnings 4 920 4 127 8 533
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Supplementary Reviewed Reviewed Audited
information R'm R'm R'm
Depreciation of property, plant and equipment 940 691 1 494
Amortisation 503 549 1 146
– intangible assets 410 479 996
– software 93 70 150
Other gains/(losses) – net (958) (378) (735)
– profit/(loss) on sale of property, plant and equipment
and intangible assets 99 3 (17)
– impairment of goodwill and intangible assets (1 063) (289) (588)
– impairment of property, plant and equipment and
other assets (24) (54) (97)
– insurance proceeds – – 2
– fair value adjustment on shareholders' liability 30 (38) (35)
Interest received 257 224 443
– loans and bank accounts 242 203 408
– other 15 21 35
Interest paid (1 055) (703) (1 495)
– loans and overdrafts (656) (480) (1 044)
– transponder leases (173) (72) (231)
– other (226) (151) (220)
Other finance income/(cost) – net (117) – (258)
– net foreign exchange differences and fair value
adjustments on derivatives (165) (76) (383)
– preference dividends received 48 76 125
Gains/(losses) on acquisitions and disposals 614 23 (53)
– profit on sale of investments 111 40 68
– losses recognised on loss of control transactions – (44) (44)
– remeasurement of contingent consideration – 75 13
– acquisition-related costs (13) (37) (73)
– remeasurement of previously held interest 516 – –
– other – (11) (17)
Goodwill
– cost 24 077 19 610 19 610
– accumulated impairment (2 484) (1 873) (1 873)
Opening balance 21 593 17 737 17 737
– foreign currency translation effects 1 988 556 2 103
– acquisitions 1 701 1 533 2 423
– disposals (9) (8) (164)
– impairment (664) (241) (506)
Closing balance 24 609 19 577 21 593
– cost 27 873 21 638 24 077
– accumulated impairment (3 264) (2 061) (2 484)
Six months ended Year ended
30 September 31 March
2013 2012 2013
(Restated) (Restated)
Supplementary Reviewed Reviewed Audited
information (continued) R'm R'm R'm
Investments and loans 43 321 31 126 35 195
– listed investments 37 417 24 481 29 157
– unlisted investments 5 904 6 645 6 038
Commitments 18 088 16 983 18 073
– capital expenditure 837 416 1 064
– programme and film rights 13 491 13 500 13 559
– network and other service commitments 1 244 1 287 1 158
– transponder leases 422 372 399
– operating lease commitments 1 577 1 010 1 333
– set-top box commitments 517 398 560
Share of equity-accounted results 5 139 3 990 8 778
– sale of investments (1 286) (1 546) (2 648)
– impairment of investments – 213 348
– gains on acquisitions and disposals – – (8)
Contribution to headline earnings 3 853 2 656 6 470
– amortisation of intangible assets 376 261 692
– equity-settled share scheme charges 393 251 675
– business combination costs – – 13
– special dividend income – – (423)
– taxation adjustment – – (191)
– fair value adjustments and currency translation
differences (72) (75) (61)
– recognition of deferred tax assets (49) (26) (195)
Contribution to core headline earnings 4 501 3 068 6 980
Tencent 4 380 2 986 6 652
Mail.ru 405 250 652
Abril (153) (95) (69)
Other (131) (73) (255)
Six months ended
30 September 2012
Change in
Previously accounting
Impact of the reported policy Restated
application for IFRS 11 R'm R'm R'm
Income statement
Revenue 22 597 (192) 22 405
Cost of providing services and sale of goods (11 808) 83 (11 725)
Selling, general and administration expenses (7 919) 165 (7 754)
Other gains/(losses) – net (378) – (378)
Operating profit 2 492 56 2 548
Interest received 218 6 224
Interest paid (706) 3 (703)
Other finance income/(costs) – net – – –
Share of equity-accounted results 4 064 (74) 3 990
– excluding net gain on disposal of investments 2 520 (76) 2 444
– net gain on disposal of investments 1 544 2 1 546
Impairment of equity-accounted investments – – –
Dilution losses on equity-accounted investments (41) – (41)
Gains/(losses) on acquisitions and disposals 25 (2) 23
Profit before taxation 6 052 (11) 6 041
Taxation (1 394) 11 (1 383)
Profit for the period 4 658 – 4 658
Statement of cash flows
Cash flow generated from operating activities 4 092 76 4 168
Cash flow utilised in investing activities (2 590) (136) (2 726)
Cash flow (utilised in)/generated from financing
activities (1 488) 5 (1 483)
Net movement in cash and cash equivalents 14 (55) (41)
Foreign exchange translation adjustments 184 (4) 180
Cash and cash equivalents at beginning of the period 8 791 (143) 8 648
Cash and cash equivalents at end of the period 8 989 (202) 8 787
Year ended
31 March 2013
Change in
Previously accounting
Impact of the reported policy Restated
application for IFRS 11 (continued) R'm R'm R'm
Income statement
Revenue 50 249 (380) 49 869
Cost of providing services and sale of goods (27 852) 176 (27 676)
Selling, general and administration expenses (17 751) 392 (17 359)
Other gains/(losses) – net (831) 96 (735)
Operating profit 3 815 284 4 099
Interest received 433 10 443
Interest paid (1 501) 6 (1 495)
Other finance income/(costs) – net (248) (10) (258)
Share of equity-accounted results 9 001 (223) 8 778
– excluding net gain on disposal of investments 6 359 (229) 6 130
– net gain on disposal of investments 2 642 6 2 648
Impairment of equity-accounted investments (2 057) (80) (2 137)
Dilution losses on equity-accounted investments (96) – (96)
Losses on acquisitions and disposals (47) (6) (53)
Profit before taxation 9 300 (19) 9 281
Taxation (2 552) 19 (2 533)
Profit for the period 6 748 – 6 748
Statement of cash flows
Cash flow generated from operating activities 9 845 190 10 035
Cash flow utilised in investing activities (6 213) (196) (6 409)
Cash flow generated from financing activities 1 280 6 1 286
Net movement in cash and cash equivalents 4 912 – 4 912
Foreign exchange translation adjustments 687 (17) 670
Cash and cash equivalents at beginning of the period 8 791 (143) 8 648
Cash and cash equivalents at end of the period 14 390 (160) 14 230
Six months ended
30 September 2012
Change in
Previously accounting
Impact of the reported policy Restated
application for IFRS 11 (continued) R'm R'm R'm
Statement of financial position
Assets
Non-current assets 68 172 55 68 227
Property, plant and equipment 12 574 (84) 12 490
Goodwill and other intangible assets 24 027 (146) 23 881
Investments in associates and joint ventures 29 070 413 29 483
Other investments and loans 1 768 (125) 1 643
Derivatives 70 – 70
Deferred taxation 663 (3) 660
Current assets 22 546 (314) 22 232
Inventory 1 592 (4) 1 588
Programme and film rights 2 830 – 2 830
Trade and other receivables and loans 7 245 (108) 7 137
Derivatives 284 – 284
Cash and cash equivalents 10 565 (202) 10 363
22 516 (314) 22 202
Assets classified as held-for-sale 30 – 30
Total assets 90 718 (259) 90 459
Total equity 50 119 – 50 119
Non-current liabilities 23 312 (23) 23 289
Long-term debt 21 069 (13) 21 056
Post-retirement medical liability 148 (2) 146
Derivatives 937 – 937
Deferred taxation 1 158 (8) 1 150
Current liabilities 17 287 (236) 17 051
Current portion of long-term debt 1 786 – 1 786
Trade payables 4 117 (61) 4 056
Accrued expenses and other current liabilities 9 659 (175) 9 484
Derivatives 149 – 149
Bank overdrafts and call loans 1 576 – 1 576
Total equity and liabilities 90 718 (259) 90 459
Year ended
31 March 2013
Change in
Previously accounting
Impact of the reported policy Restated
application for IFRS 11 (continued) R'm R'm R'm
Statement of financial position
Assets
Non-current assets 76 109 11 76 120
Property, plant and equipment 13 810 (94) 13 716
Goodwill and other intangible assets 26 440 (45) 26 395
Investments in associates and joint ventures 33 150 237 33 387
Other investments and loans 1 891 (83) 1 808
Derivatives 72 – 72
Deferred taxation 746 (4) 742
Current assets 27 427 (284) 27 143
Inventory 1 941 (5) 1 936
Programme and film rights 1 868 – 1 868
Trade and other receivables and loans 7 310 (119) 7 191
Derivatives 449 – 449
Cash and cash equivalents 15 813 (160) 15 653
27 381 (284) 27 097
Assets classified as held-for-sale 46 – 46
Total assets 103 536 (273) 103 263
Total equity 55 853 – 55 853
Non-current liabilities 29 192 (16) 29 176
Long-term debt 26 720 (5) 26 715
Post-retirement medical liability 164 (3) 161
Derivatives 972 – 972
Deferred taxation 1 336 (8) 1 328
Current liabilities 18 491 (257) 18 234
Current portion of long-term debt 2 298 (2) 2 296
Trade payables 4 179 (72) 4 107
Accrued expenses and other current liabilities 10 411 (183) 10 228
Derivatives 180 – 180
Bank overdrafts and call loans 1 423 – 1 423
Total equity and liabilities 103 536 (273) 103 263
Business combinations
In June 2013 the group acquired an effective 80% interest in redBus, an Indian online ticketing platform. The fair
value of the total purchase consideration was R1bn in cash. The purchase price allocation: property, plant and
equipment R4m; intangible assets R402m; cash R29m; trade and other receivables R27m; trade and other payables
R41m; deferred tax liability R120m and the balance to goodwill.
During June 2013 the option to subscribe for new shares in MIH India Global Internet Limited (MIH India), held by
Tencent Holdings Limited, expired. MIH India operates ecommerce platforms under the ibibo brand. In terms of
IFRS 10 the group exercised control over MIH India from the date that the option expired. The group previously
accounted for MIH India as a joint venture. The fair value of the total deemed purchase consideration was R321m,
being the acquisition date fair value of the interest held in MIH India. A gain of R274m has been recognised as a result
of remeasuring to fair value the existing interest in MIH India. The purchase price allocation: property, plant and
equipment R5m; intangible assets R162m; cash R71m; trade and other receivables R64m; trade and other payables
R31m; deferred tax liability R51m and the balance to goodwill.
In July 2013 the group acquired an additional interest of 28,6% in Dubizzle, an online classifieds platform centred
on Dubai. The group's total interest in Dubizzle increased to 53,6% and the group now accounts for Dubizzle as
a subsidiary. The fair value of the total purchase consideration was R939m, consisting of R477m in cash for the
additional interest and R462m being the acquisition date fair value of the existing interest held in Dubizzle. The
purchase price allocation: property, plant and equipment R2m; intangible assets R507m; cash R35m; trade and other
receivables R16m; trade and other payables R37m and the balance to goodwill. A non-controlling interest of R303m
was recognised at the acquisition date. A gain of R209m has been recognised as a result of remeasuring to fair value
the group's existing interest in Dubizzle before the acquisition of the additional interest.
The main factor contributing to the goodwill recognised in these acquisitions is their market presence. This goodwill
is not expected to be deductible for income tax purposes. The non-controlling interest was measured using the
proportionate share of the identifiable net assets.
The group made various smaller acquisitions with a combined cost of R193m. Total acquisition-related costs of R13m
were recorded in "Gains/(losses) on acquisitions and disposals" in the income statement. Had the revenues and net
results of redBus and Dubizzle been included from 1 April 2013, it would not have had a significant effect on the
group's consolidated revenue and net results.
The following investments in associated companies and joint ventures were made:
In June 2013 the group acquired an additional 6,1% interest in Souq Group Limited, an online retailer, marketplace
and payment platform business, with operations in the UAE, Saudi Arabia, Egypt and Kuwait, for R296m in cash. The
group now has a 35,8% interest in Souq Group Limited.
In July 2013 the group acquired an additional 8,6% interest in Flipkart Private Limited, a leading ecommerce site in
India, for R1 376m in cash. The group now has a 16,7% interest in Flipkart on a fully diluted basis.
The above acquisitions were primarily funded through the utilisation of existing credit facilities.
Financial instruments
The information below analyses financial assets and financial liabilities, which are carried at fair value at each reporting
period, by level of hierarchy as required by IFRS 7 and IFRS 13.
Fair value measurements at
30 September 2013 using:
Quoted prices
in active
markets for Significant
identical other Significant
assets observable unobservable
or liabilities inputs inputs
(Level 1) (Level 2) (Level 3)
R'm R'm R'm
Assets
Foreign exchange contracts – 495 –
Other derivatives – 22 –
Liabilities
Foreign exchange contracts – 22 –
Shareholders' liabilities – – 796
Interest rate swaps – 392 –
There have been no transfers between level one, two or three during the period, nor were there any significant
changes to the valuation techniques and inputs used to determine fair values.
Reconciliation of level 3 financial instrument liabilities
The following table presents the changes in level 3 instruments for the period ending 30 September 2013:
Shareholders'
liabilities
R'm
Opening balance at 1 April 2013 704
Issues 73
Foreign currency translation effects 30
Cancellations (11)
Closing balance at 30 September 2013 796
The fair value of level three financial instruments are determined using the discounted cash flow model. Business
specific adjusted discount rates are applied to estimated future cash flows. Changes in these assumptions could
affect the reported fair value of these financial instruments. The fair value of level two financial instruments are
determined with the use of exchange rates quoted in an active market and interest rate extracts from observable
yield curves.
Naspers Limited
(Registration Number: 1925/001431/06)
("Naspers")
Share code: NPN ISIN: ZAE000015889
LSE ADS code: NPSN ISIN: US 6315121003
Directors
T Vosloo (chair), J P Bekker (chief executive), C L Enenstein, D G Eriksson, F-A du Plessis, R C C Jafta,
F L N Letele, Y Ma, D Meyer, R Oliveira de Lima, S J Z Pacak, T M F Phaswana, J D T Stofberg,
B J van der Ross, J J M van Zyl
Company secretary
G Kisbey-Green
Registered office
40 Heerengracht, Cape Town 8001
(PO Box 2271, Cape Town 8000)
Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein 2001
(PO Box 4844, Johannesburg 2000)
Sponsor
Investec Bank Limited
ADR programme
The Bank of New York Mellon maintains a GlobalBuyDIRECTTM plan for Naspers Limited. For additional information,
please visit The Bank of New York Mellon's website at www.globalbuydirect.com or call Shareholder Relations at
1-888-BNY-ADRS or 1-800-345-1612 or write to: The Bank of New York Mellon, Shareholder Relations Department –
GlobalBuyDIRECTTM, Church Street Station, PO Box 11258, New York, NY 10286-1258, USA.
Important information
The report contains forward-looking statements as defined in the United States Private Securities Litigation Reform
Act of 1995. Words such as "believe", "anticipate", "intend", "seek", "will", "plan", "could", "may", "endeavour"
and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means
of identifying such statements. While these forward-looking statements represent our judgements and future
expectations, a number of risks, uncertainties and other important factors could cause actual developments and
results to differ materially from our expectations. These include factors that could adversely affect our businesses
and financial performance. We are not under any obligation to (and expressly disclaim any such obligation to) update
or alter our forward-looking statements, whether as a result of new information, future events or otherwise. Investors
are cautioned not to place undue reliance on any forward-looking statements contained herein.
www.naspers.com
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