Wrap Text
Condensed Consolidated Interim Report for the six months ended 30 September 2017
Naspers Limited
Incorporated in the Republic of South Africa
(Registration number 1925/001431/06)
(Naspers)
JSE share code: NPN ISIN: ZAE000015889
LSE share code: NPSN ISIN: US 6315121003
CONDENSED CONSOLIDATED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017
COMMENTARY
Naspers delivered a solid performance for the six months to 30 September 2017 with group revenue, measured on an economic-interest
basis, increasing 33% year on year to US$9.0bn (or 39% in local currency and adjusted for acquisitions and disposals).
This is a 17% increase on last year's growth rate with the ecommerce businesses being key drivers of the acceleration.
Group trading profit increased by 40% (or 52% in local currency and adjusted for acquisitions and disposals) to US$2.1bn
due to a healthy boost from Tencent and increased profitability in the ecommerce businesses - most notably classifieds.
With this as backdrop, group core headline earnings, the board's measure of sustainable operating performance, was
US$1.5bn - a 65% increase year on year.
Ecommerce accelerated its topline growth and reduced losses (in local currency and adjusted for acquisitions and disposals)
as it increased its scale. Classifieds (excluding letgo) turned profitable and our payment service platforms within
PayU also scaled, reducing losses and moving closer to profitability. Notably, the group strengthened its presence in online
food delivery with significant investments in Delivery Hero and Swiggy. Tencent produced another excellent set of results.
Video entertainment, although still navigating weak African macroeconomic conditions - particularly weak currencies - stabilised
its losses in sub-Saharan Africa and saw a significant improvement in cash remittances from Nigeria.
The group's geographic footprint, across more than 120 countries and markets, exposes it to significant foreign exchange
volatility. This materially impacts on reported revenue and trading profit metrics, especially in video entertainment
where revenues are earned in local currencies but costs are predominantly US dollar based. The internet businesses are less
severely affected given their largely local currency denominated revenue and cost bases. Where relevant in this report we
have adjusted amounts and percentages for the effects of foreign currency and acquisitions and disposals to reflect
underlying trends. These adjustments (pro forma financial information) are quoted in brackets after the equivalent metrics
reported under International Financial Reporting Standards (IFRS). A reconciliation of pro forma financial information to
the equivalent IFRS metrics is provided in note 16 of this condensed consolidated interim report.
The following financial commentary and segmental reviews are prepared on an economic-interest basis (including consolidated
subsidiaries and a proportionate consolidation of associated companies and joint ventures), unless otherwise stated.
FINANCIAL REVIEW
On a consolidated basis, excluding equity-accounted investments, group revenue increased 5% (15%) due to accelerating ecommerce
growth, the latter growing revenue 33% in local currency and adjusted for acquisitions and disposals (notably the disposals
of Allegro and Netretail). Consolidated trading profit improved by 56% (165%) to US$70m.
Development spend has reduced year on year on both a consolidated and economic-interest basis.
Development spend of consolidated businesses was down 18% from the prior year as earlier-stage investments improved
their competitive positions, therefore requiring lower investment while continuing to scale. Excluding the investment in
controlled newer initiatives such as letgo and Showmax, which totalled US$155m, development spend on older investments decreased 12%.
The group's share of the results of associates and joint ventures increased 59% year on year to US$1.5bn. Included in this
figure are once-off gains of US$414m and impairment losses of US$121m recognised by these entities. In aggregate, these
equity-accounted investments contributed US$1.7bn to core headline earnings, an improvement of 52% year on year.
Net interest expense on borrowings was down 27% to US$54m due to lower utilisation of credit facilities, the impact of the
proceeds from the Allegro disposal, and the 4.85% coupon achieved by the group on the US$1bn bond issued in July 2017.
Net debt was US$140m at 30 September 2017, reflecting gearing of 1%.
Consolidated free cash outflow of US$96m was recorded, benefiting from dividend income of US$247m from Tencent.
The company's external auditor has not reviewed or reported on forecasts included in the condensed consolidated interim report.
SEGMENTAL REVIEW
Internet
Robust growth saw internet revenues increasing 42% (52%) year on year to US$6.9bn. Boosted by classifieds and another
exceptional performance by Tencent, trading profit for the internet segment was US$1.8bn - up 47% (61%) year on year.
This segment now contributes 77% of group revenue, compared to 72% last year.
Ecommerce
Revenue in ecommerce increased 15% year on year to US$1.6bn. However, when measured in local currency and adjusted for
acquisitions and disposals, growth was 38% - an acceleration of 14 percentage points on last year's growth rate. This growth
was fuelled by strong performances by classifieds, food delivery, payments and etail. Overall trading losses increased 9%
to US$318m, with equity-accounted investments contributing 44% of the loss. Measured in local currency and adjusted for
acquisitions and disposals - in particular the US$83m in trading profits generated by Allegro last year - ecommerce trading
losses decreased by a meaningful 17%.
Trading losses declined in several ecommerce units including classifieds and payments. The group's profitable ecommerce
businesses delivered US$465m in revenues and US$170m in trading profits, growing these metrics by 50% (36%) and
55% (52%) respectively.
Classifieds continued to gain traction across the portfolio. Excluding the additional investment in letgo, the business
turned profitable during the reporting period. Revenue grew 47% (38%) year on year with OLX Europe benefiting from tailwinds
in the vertical businesses, and Avito showing consistent growth. OLX Brazil is on track to reach break-even by the end of
the financial year.
Etail revenues increased 16% year on year in nominal terms. However, in local currency and before the impact of acquisitions
and disposals, revenue was up 37% with strong year-on-year growth from Takealot and Flipkart.
eMAG powered growth in its home market of Romania and across Central and Eastern Europe with gross merchandise value (GMV)
increasing year on year by 33% in Romania, 50% in Hungary and 27% in Bulgaria.
Flipkart, the group's equity-accounted investment in India, continued its growth acceleration and further solidified its
market leadership. During the recent festive season sales period, Flipkart captured around 70% of the total ecommerce market.
Flipkart has also secured substantial capital from investors - including Tencent and Softbank - to continue building its
position as a leading business-to-consumer (B2C) platform in the fast-growing Indian market.
In August 2017 the group invested an additional US$74m to acquire a controlling stake in South Africa's leading etailer,
Takealot, resulting in the business now being consolidated. Takealot made strong progress over the reporting period, recording
GMV growth of 72%, a significant acceleration on last year.
Since the merger of the group's travel business ibibo with MakeMyTrip in January 2017, the travel business has maintained its
rapid growth - increasing revenue by 91% (24%) year on year.
The group's payments and financial services business, PayU, continued to perform well in the key regions of India, Europe,
the Middle East and Africa, and Latin America. Revenue growth of 52% (36%) was recorded on the back of a 75% increase in
transaction volumes year on year. India is PayU's fastest growing market, representing 47% of total payment volumes and
growing payment volumes by 120% year on year. Overall, PayU processed payment volumes of US$11.7bn during the first six
months of the year.
PayU continues to realise scale efficiencies following the consolidation in India with Citrus Pay and from its drive to
automate and consolidate platforms in other markets. With healthy revenue growth and a focus on cost management, the core
payments service provider business is well on track to achieve break-even by the end of the financial year.
Executing on its strategy to expand into consumer credit, PayU invested US$99m for a non-controlling stake in Kreditech,
a credit-scoring business. PayU plans to extend these consumer credit services in its key markets.
The group is expanding its online food-delivery footprint. iFood, majority-owned by Movile, generated revenue growth of
145% (135%) year on year. The group also invested an initial US$426m in Delivery Hero in May 2017, followed by an additional
US$47m top-up when Delivery Hero successfully listed on the Frankfurt stock exchange. Delivery Hero reported 96% year-on-
year revenue growth in its second quarter results. In September 2017 the group entered into a further agreement, subject to
regulatory approval, to acquire an additional stake in Delivery Hero for EUR660m (approximately US$775m), taking the group's
total ownership to around 24% on a fully diluted basis. The group also led an investment round in Swiggy, a leading online
food-delivery business in India, in May 2017, investing US$61m for a 14.8% fully diluted interest.
Naspers Ventures has strengthened its position in the education technology sector with increased investments in Udemy and
Brainly, both global learning platforms in which the group originally invested during the 2017 financial year.
Tencent
Tencent had an outstanding six months, with revenues growing 57% year on year to RMB106.2bn and non-GAAP operating profit
increasing 37% year on year to RMB38.6bn. Smartphone and PC games, online advertising, digital content subscriptions and
payment-related services, all remain growth drivers. Margins contracted due to high channel costs for smartphone games,
revenue mix changes to low-margin products and increased investments in content.
Online games revenue increased by 36% year on year to RMB46.7bn, primarily driven by more smartphone game users and a higher
proportion of paying users, as well as increased average revenue per user (ARPU) from key PC games titles. In the second
quarter of 2017, smartphone titles (including the titles attributable to the social network business) generated more revenue
than PC-based titles for the first time. It is expected that PC client game revenue growth will decelerate in future.
Online advertising revenues increased by 52% year on year, boosted by increased traffic on video and growth in advertising on
Weixin, mobile browsers and other platforms. Digital-content revenue recorded rapid growth over the period, primarily driven
by the strong performance of video and music services subscriptions and virtual gifting within live broadcasts.
At the end of June 2017, Weixin and WeChat monthly active users (MAU) reached 963m, growing 19% year on year. Total MAU for
QQ was 850m, down around 5% from last year due to fewer casual users, while engagement with core users increased.
More information on Tencent's results is available at www.tencent.com/en-us/ir.
Mail.ru
Mail.ru grew overall revenues 33% year on year to RUB26.3bn, reflecting an improving Russian economic environment and solid
growth in advertising and online games revenues. Advertising revenue increased 26% over the period to RUB10.3bn, driven by
growth in advertising on social networks, video and mobile. Massively multiplayer online (MMO) games revenue was up 53% to
RUB7.8bn year on year, the result of both ongoing success in existing titles and new releases such as HAWK and the console
version of Skyforge. Internet value-added services (IVAS) revenue declines were reversed and saw year-on-year growth of 19%,
closing at RUB7.3bn, primarily on the back of cross-platform subscription offerings. VKontakte remains the largest social
network platform in Russia with 60m daily active users. Investments in leveraging Mail.ru's existing user engagement,
including in food delivery and classifieds, are encouraging.
More information on Mail.ru's results is available at https://corp.mail.ru/en/investors/.
Video entertainment
Overall, the video-entertainment business recorded modest subscriber growth over the period with the total subscriber base
closing at 12.2m households on 30 September 2017.
In South Africa, DStv had a stable performance and continued to deliver healthy profits and cash flows. A further development
was the combination of the group's Showmax offering with DStv Now, which is showing encouraging early results. However, the
business still operates against a difficult and weakening economic backdrop.
Outside South Africa, losses in the sub-Saharan African video-entertainment business stabilised year on year, with most
African currencies, except the Nigerian naira, showing less weakness than in the prior year. Assuming no further significant
currency weakness and continued momentum in subscriber growth, the group will be on track to bring the business back to
profitability in the coming years.
In October 2017, Zambia commenced the process of migrating terrestrial television broadcasting from an analogue to a digital
format - a process commonly referred to as analogue switchoff (ASO). The Zambian business is well prepared to capitalise on
this opportunity. Digital terrestrial television (DTT) networks have been rolled out in Mozambique, Nigeria and Ghana although
release dates for the ASO have not been confirmed in these territories.
Although monetary policy in several African economies continues to restrict liquidity due to the limited supply of foreign
currency, there has been a marked improvement in liquidity in Nigeria. This has allowed the group to regularly remit cash.
At 30 September 2017 cash balances of US$166m, held in Angola, Nigeria, Zimbabwe and Mozambique, remain exposed to weakening
currencies. This balance is down 43% since the end of March 2017.
The expansion of Showmax in Poland continued and a sharp focus on local content is showing traction in this market.
With the above as backdrop, the segment reported revenues of US$1.8bn, up 8% (7%) on the prior year. Trading profit was up
marginally by 4% (3%). Persistent currency weakness in Nigeria, where the naira weakened significantly year on year,
translated to lower US dollar revenues.
Management continues to engage regulators and participate in several regulatory reviews in various markets.
Media
Media24 (excluding Novus) achieved satisfactory results with the structural decline in traditional revenue streams offset by
significant cost-reduction initiatives throughout the business. Revenue increased 11% (5%) year on year to US$315m, while
trading profit grew 75%.
The growth businesses, largely the ecommerce and digital media initiatives, contributed 8% of total revenue and grew 24% over
the period in local currency. The segment's focus on audience migration to digital formats and cost containment remains.
In September 2017 the group unbundled the majority of Media24's investment in the listed South African print business Novus,
to Naspers's shareholders. Post unbundling, Media24 retained a 19% interest in Novus and accordingly no longer consolidates
the business. Media24's remaining portfolio comprises newspapers, magazine and book publishing, ecommerce, digital media,
online job classifieds and online travel.
Prospects
Going forward, the group will continue to drive scale to bring its ecommerce business to profitability and cash generation.
In addition, it will manage macro challenges in the more mature businesses through tight cost controls and continued
innovation and repositioning of businesses to counter increasing competition by global players. The group will also continue
to invest in emerging businesses that may power future growth. Naspers's balance sheet remains strong and the group's current
business plan is fully funded.
PREPARATION OF THE CONDENSED CONSOLIDATED INTERIM REPORT
The preparation of the condensed consolidated interim report was supervised by the group's financial director, Basil Sgourdos
CA(SA). These results were made public on 29 November 2017.
Condensed consolidated income statement
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
Notes US$'m US$'m US$'m
Revenue 3 107 2 958 6 098
Cost of providing services and sale of goods (1 824) (1 627) (3 574)
Selling, general and administration expenses (1 252) (1 334) (2 827)
Other gains/(losses) - net (20) (27) (57)
Operating profit/(loss) 11 (30) (360)
Interest received 5 54 29 70
Interest paid 5 (132) (136) (278)
Other finance income/(costs) - net 5 (47) (58) (259)
Share of equity-accounted results 7 1 447 912 1 829
Impairment of equity-accounted investments (17) - -
Dilution losses on equity-accounted investments (41) (71) (119)
(Losses)/gains on acquisitions and disposals (51) 39 2 169
Profit before taxation 6 1 224 685 3 052
Taxation (148) (144) (244)
Profit for the period 1 076 541 2 808
Attributable to:
Equity holders of the group 1 098 554 2 921
Non-controlling interest (22) (13) (113)
1 076 541 2 808
Core headline earnings for the period (US$'m) 4 1 510 914 1 752
Core headline earnings per N ordinary share
(US cents) 350 212 406
Diluted core headline earnings per N ordinary share
(US cents) 344 209 399
Headline earnings for the period (US$'m) 4 916 555 772
Headline earnings per N ordinary share (US cents) 212 129 179
Diluted headline earnings per N ordinary share
(US cents) 207 126 173
Earnings per N ordinary share (US cents) 254 129 677
Diluted earnings per N ordinary share (US cents) 249 125 670
Net number of shares issued ('000)
- at period-end 431 690 431 290 431 540
- weighted average for the period 431 540 431 085 431 207
- diluted weighted average 433 191 432 715 432 684
Condensed consolidated statement of comprehensive income
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Profit for the period 1 076 541 2 808
Total other comprehensive income, net of tax, for the
period(1) 842 291 1 545
Translation of foreign operations(2) 7 (115) 326
Net fair value (losses)/gains (2) 4 (1)
Cash flow hedges 12 (43) (85)
Share of other comprehensive income and reserves of
equity-accounted investments 836 438 1 293
Tax on other comprehensive income (11) 7 12
Total comprehensive income for the period 1 918 832 4 353
Attributable to:
Equity holders of the group 1 974 896 4 492
Non-controlling interest (56) (64) (139)
1 918 832 4 353
Notes
(1) These components of other comprehensive income may subsequently be reclassified to profit or loss except for gains
of US$142m (2016: US$141m and 31 March 2017: US$292m) included in the "Share of other comprehensive income and
reserves of equity-accounted investments".
(2) The movement on the foreign currency translation reserve relates primarily to the effects of foreign exchange rate
fluctuations related to the translation of the group's investments in its foreign operations.
Condensed consolidated statement of financial position
30 September 31 March
Reviewed Reviewed Audited
2017 2016 2017
Notes US$'m US$'m US$'m
Assets
Non-current assets 19 111 15 080 16 291
Property, plant and equipment 1 556 1 861 1 638
Goodwill 8 2 497 3 041 2 442
Other intangible assets 1 137 1 104 1 104
Investments in associates 13 563 8 670 10 784
Investments in joint ventures 84 200 79
Other investments and loans 102 62 82
Other receivables 28 23 32
Derivative financial instruments 5 - 2
Deferred taxation 139 119 128
Current assets 4 960 3 144 5 639
Inventory 214 222 154
Programme and film rights 413 400 193
Trade receivables 470 465 420
Other receivables and loans 669 472 456
Derivative financial instruments 23 14 6
Cash and cash equivalents 3 171 1 545 4 007
4 960 3 118 5 236
Assets classified as held for sale 10 - 26 403
Total assets 24 071 18 224 21 930
Equity and liabilities
Share capital and reserves 16 574 11 103 14 958
Share capital and premium 4 954 4 939 4 944
Other reserves 1 199 (320) 518
Retained earnings 10 421 6 484 9 496
Non-controlling interest 278 348 403
Total equity 16 852 11 451 15 361
Non-current liabilities 4 707 4 486 3 641
Capitalised finance leases 1 111 1 167 1 142
Liabilities - interest bearing 3 193 3 005 2 198
- non-interest bearing 34 13 9
Post-employment medical liability 15 14 14
Derivative financial instruments 76 23 13
Deferred taxation 278 264 265
Current liabilities 2 512 2 287 2 928
Current portion of long-term debt 355 222 915
Trade payables 675 599 487
Accrued expenses and other current liabilities 1 426 1 341 1 333
Derivative financial instruments 50 86 119
Bank overdrafts and call loans 6 34 4
2 512 2 282 2 858
Liabilities classified as held for sale 10 - 5 70
Total equity and liabilities 24 071 18 224 21 930
Net asset value per N ordinary share (US cents) 3 839 2 574 3 466
Condensed consolidated statement of changes in equity
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Balance at the beginning of the period 15 361 10 654 10 654
Changes in share capital and premium
Movement in treasury shares (74) (77) (77)
Share capital and premium issued 84 51 56
Changes in reserves
Total comprehensive income for the period 1 974 896 4 492
Movement in share-based compensation reserve (74) 66 (376)
Movement in existing control business combination reserve (121) 61 47
Direct retained earnings and other reserve movements 88 10 720
Dividends paid to Naspers shareholders (261) (158) (158)
Changes in non-controlling interest
Total comprehensive income for the period (56) (64) (139)
Dividends paid to non-controlling shareholders (124) (96) (116)
Movement in non-controlling interest in reserves 55 108 258
Balance at the end of the period 16 852 11 451 15 361
Comprising:
Share capital and premium 4 954 4 939 4 944
Retained earnings 10 421 6 484 9 496
Share-based compensation reserve 1 216 1 438 1 147
Existing control business combination reserve (257) (123) (137)
Hedging reserve (33) 6 (30)
Valuation reserve 1 873 819 1 387
Foreign currency translation reserve (1 600) (2 460) (1 849)
Non-controlling interest 278 348 403
Total 16 852 11 451 15 361
Condensed consolidated statement of cash flows
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
Notes US$'m US$'m US$'m
Cash flows from operating activities
Cash generated from operating activities (68) 92 294
Interest income received 46 27 63
Dividends received from investments and equity-
accounted companies 250 193 193
Interest costs paid (123) (126) (257)
Taxation paid (175) (157) (333)
Net cash (utilised in)/generated from
operating activities (70) 29 (40)
Cash flows from investing activities
Acquisitions and disposals of tangible and
intangible assets (45) (78) (173)
Acquisitions of subsidiaries, associates and joint
ventures 11 (857) (127) (397)
Disposals of subsidiaries, businesses, associates
and joint ventures 11 179 159 3 383
Cash movement in other investments and loans 2 4 1
Net cash (utilised in)/generated from
investing activities (721) (42) 2 814
Cash flows from financing activities
Proceeds from long- and short-term loans raised 1 114 122 584
Repayments of long- and short-term loans (703) (24) (602)
Outflow from share-based compensation
transactions (9) (8) (36)
Dividends paid by the holding company and its
subsidiaries (313) (261) (281)
Other movements resulting from financing
activities (88) 4 (76)
Net cash generated from/(utilised in)
financing activities 1 (167) (411)
Net movement in cash and cash equivalents (790) (180) 2 363
Foreign exchange translation adjustments on cash
and cash equivalents (48) (19) (50)
Cash and cash equivalents at the beginning of the
period 4 003 1 713 1 713
Cash and cash equivalents classified as held for
sale - (3) (23)
Cash and cash equivalents at the end of the
period 3 165 1 511 4 003
Segmental review
Revenue
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed % Audited
US$'m US$'m change US$'m
Internet 6 938 4 889 42 10 621
Social network services 5 357 3 510 53 7 692
- Tencent 5 241 3 426 53 7 506
- Mail.ru 116 84 38 186
Ecommerce 1 581 1 379 15 2 929
- Etail 877 753 16 1 659
- Travel 128 67 91 123
- Marketplaces - 193 (100) 327
- Payments 126 83 52 186
- Classifieds 289 196 47 426
- Food delivery 56 20 >100 53
- Other 105 67 57 155
Video entertainment 1 777 1 645 8 3 401
Media(2) 315 284 11 588
Corporate services 1 1 - 2
Intersegmental (10) (31) 68 (50)
Economic interest 9 021 6 788 33 14 562
Less: Equity-accounted investments (5 914) (3 830) (54) (8 464)
Consolidated 3 107 2 958 5 6 098
EBITDA(1)
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed % Audited
US$'m US$'m change US$'m
Internet 1 966 1 365 44 2 706
Social network services 2 258 1 632 38 3 388
- Tencent 2 227 1 593 40 3 312
- Mail.ru 31 39 (21) 76
Ecommerce (292) (267) (9) (682)
- Etail (123) (116) (6) (258)
- Travel (29) (58) 50 (87)
- Marketplaces - 89 (100) 146
- Payments (32) (29) (10) (66)
- Classifieds (38) (113) 66 (319)
- Food delivery (7) 2 >(100) 5
- Other (63) (42) (50) (103)
Video entertainment 363 331 10 520
Media(2) 25 21 19 40
Corporate services (8) (6) (33) (14)
Economic interest 2 346 1 711 37 3 252
Less: Equity-accounted investments (2 128) (1 535) (39) (3 180)
Consolidated 218 176 24 72
Notes
(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.
(2) Includes revenue of US$133.0m (2016: US$107.9m and 31 March 2017: US$222.4m), EBITDA of US$33.3m
(2016: US$29.1m and 31 March 2017: US$55.1m) and trading profit of US$33.3m (2016: US$22.4m and 31 March 2017:
US$40.3m) relating to Novus Holdings Limited (Novus). The group distributed the majority of its shareholding in Novus
to its shareholders in September 2017 (refer to note 10).
Trading profit
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed % Audited
US$'m US$'m change US$'m
Internet 1 820 1 241 47 2 454
Social network services 2 138 1 533 39 3 185
- Tencent 2 115 1 501 41 3 125
- Mail.ru 23 32 (28) 60
Ecommerce (318) (292) (9) (731)
- Etail (134) (128) (5) (281)
- Travel (31) (58) 47 (88)
- Marketplaces - 83 (100) 137
- Payments (33) (30) (10) (69)
- Classifieds (45) (117) 62 (328)
- Food delivery (8) 1 >(100) 5
- Other (67) (43) (56) (107)
Video entertainment 234 226 4 287
Media(2) 21 12 75 19
Corporate services (8) (6) (33) (14)
Economic interest 2 067 1 473 40 2 746
Less: Equity-accounted investments (1 997) (1 428) (40) (2 960)
Consolidated 70 45 56 (214)
Notes
(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.
(2) Includes revenue of US$133.0m (2016: US$107.9m and 31 March 2017: US$222.4m), EBITDA of US$33.3m
(2016: US$29.1m and 31 March 2017: US$55.1m) and trading profit of US$33.3m (2016: US$22.4m and 31 March 2017:
US$40.3m) relating to Novus Holdings Limited (Novus). The group distributed the majority of its shareholding in Novus
to its shareholders in September 2017 (refer to note 10).
Reconciliation of trading profit/(loss) to operating profit/(loss)
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Trading profit/(loss) 70 45 (214)
Finance cost on transponder leases 26 20 46
Amortisation of other intangible assets (47) (46) (99)
Other gains/(losses) - net (20) (27) (57)
Retention option expense - (1) (1)
Share-based incentives settled in treasury shares (18) (21) (35)
Operating profit/(loss) 11 (30) (360)
Note
For a reconciliation of operating profit/(loss) to profit before taxation, refer to the condensed consolidated income
statement.
Notes to the condensed consolidated interim report for the six months ended 30 September
1. General information
Naspers Limited (Naspers) is a global internet and entertainment group and one of the largest technology investors in
the world. Founded in 1915, we now operate in more than 120 countries and markets with long-term growth potential,
Naspers builds leading companies that empower people and enrich communities. It runs some of the world's leading
platforms in internet, video entertainment and media.
2. Basis of presentation and accounting policies
The condensed consolidated interim financial statements for the six months ended 30 September 2017 have
been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34 Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, and Financial
Pronouncements as issued by the Financial Reporting Standards Council as well as the requirements of the
Companies Act of South Africa and the JSE Limited Listings Requirements.
The condensed consolidated interim financial statements do not include all the disclosures required for complete
annual financial statements prepared in accordance with IFRS as issued by the International Accounting Standards
Board (IASB). The accounting policies used in preparing the condensed consolidated interim financial statements are
consistent with those applied in the previous annual financial statements.
The group has adopted all new and amended accounting pronouncements issued by the IASB that are effective for
financial years commencing 1 April 2017. None of the new or amended accounting pronouncements that are effective
for the financial year commencing 1 April 2017 had a material impact on the group.
Trading profit excludes amortisation of intangible assets (other than software), equity-settled share-based payment
expenses relating to transactions to be settled through the issuance of treasury shares, 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.
3. Review by the independent auditor
This condensed consolidated interim report has been reviewed by the company's auditor, PricewaterhouseCoopers
Inc., whose unqualified report appears at the end of the condensed consolidated interim report.
4. Calculation of headline and core headline earnings
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Net profit attributable to shareholders 1 098 554 2 921
Adjusted for:
- impairment of property, plant and equipment and other
assets 18 2 26
- impairment of goodwill and other intangible assets 1 24 28
- (profit)/loss on sale of assets (3) (1) 1
- loss on remeasurement of disposal groups classified as
held for sale to fair value less costs of disposal - 2 2
- losses/(gains) on disposals of investments 62 (40) (2 219)
- remeasurement of previously held interest (21) - -
- dilution losses on equity-accounted investments 41 71 119
- remeasurements included in equity-accounted earnings (292) (57) (102)
- impairment of equity-accounted investments 17 - -
921 555 776
Total tax effects of adjustments - (1) (17)
Total adjustment for non-controlling interest (5) 1 13
Headline earnings 916 555 772
Adjusted for:
- equity-settled share-based payment expenses 173 124 296
- amortisation of other intangible assets 398 177 467
- fair-value adjustments and currency translation
differences 13 56 172
- retention option expense - 1 1
- business combination losses 10 1 44
Core headline earnings 1 510 914 1 752
The diluted earnings, headline earnings and core headline earnings per share figures presented on the face of
the condensed consolidated income statement include a decrease of US$20m (2016: US$11m and 31 March 2017:
US$24m) relating to the future dilutive impact of potential ordinary shares issued by equity-accounted investees.
5. Interest received/(paid)
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Interest received 54 29 70
- loans and bank accounts 46 26 56
- other 8 3 14
Interest paid (132) (136) (278)
- loans and overdrafts (100) (100) (198)
- transponder leases (26) (20) (46)
- other (6) (16) (34)
Other finance income/(costs) - net (47) (58) (259)
- net foreign exchange differences and fair-value
adjustments on derivatives (47) (58) (259)
6. Profit before taxation
In addition to the items already detailed, profit before taxation has been determined after taking into account,
inter alia, the following:
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Depreciation of property, plant and equipment 108 99 214
Amortisation 62 59 128
- other intangible assets 47 46 99
- software 15 13 29
Net realisable value adjustments on inventory, net of
reversals(1) 6 15 51
Other gains/(losses) - net (20) (27) (57)
- profit/(loss) on sale of assets 3 1 (1)
- impairment of goodwill and other intangible assets (1) (24) (30)
- impairment of property, plant and equipment and other
assets (18) (2) (26)
- dividends received on investments 2 1 1
- remeasurement of disposal groups classified as held for
sale to fair value less costs of disposal - (2) (2)
- fair-value adjustments on financial instruments (6) (1) 1
(Losses)/gains on acquisitions and disposals (51) 39 2 169
- (losses)/gains on disposal of investments (56) 40 1 990
- gains recognised on loss of control transactions - - 228
- remeasurement of contingent consideration (6) 1 1
- acquisition-related costs (10) (2) (50)
- remeasurement of previously held interest 21 - -
Note
(1) Net realisable value writedowns relate primarily to set-top box subsidies in the video-entertainment segment.
7. Equity-accounted results
The group's equity-accounted investments contributed to the condensed consolidated interim financial results as follows:
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Share of equity-accounted results 1 447 912 1 829
- sale of assets - 8 3
- disposal of investments (414) (206) (381)
- impairment of investments 121 145 268
Contribution to headline earnings 1 154 859 1 719
- amortisation of other intangible assets 376 150 404
- equity-settled share-based payment expenses 157 106 268
- fair-value adjustments and currency translation
differences 3 (3) -
Contribution to core headline earnings 1 690 1 112 2 391
Tencent 1 827 1 183 2 535
Mail.ru 20 27 52
Other (157) (98) (196)
8. Goodwill
Goodwill is subject to an annual impairment assessment. Movements in the group's goodwill for the period are detailed
below:
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Goodwill
- cost 2 790 3 175 3 175
- accumulated impairment (348) (357) (357)
Opening balance 2 442 2 818 2 818
- foreign currency translation effects (30) 95 210
- acquisitions of subsidiaries and businesses 85 138 244
- disposals of subsidiaries and businesses - - (786)
- transferred to assets classified as held for sale - (7) (37)
- impairment - (3) (5)
- remeasurement to fair value less costs of disposal - - (2)
Closing balance 2 497 3 041 2 442
- cost 2 845 3 416 2 790
- accumulated impairment (348) (375) (348)
9. Commitments and contingent liabilities
Commitments relate to amounts for which the group has contracted, but that have not yet been recognised as
obligations in the statement of financial position.
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Commitments 2 626 2 322 2 464
- capital expenditure 14 24 13
- programme and film rights 2 132 1 856 2 015
- network and other service commitments 123 166 158
- transponder leases - 17 -
- operating lease commitments 198 187 163
- set-top box commitments 159 72 115
The group operates a number of businesses in jurisdictions where taxes are payable on certain transactions or
payments. The group continues to seek relevant advice and works with its advisers to identify and quantify such tax
exposures. Our current assessment of possible withholding and other tax exposures, including interest and potential
penalties, amounts to approximately US$155.5m (2016: US$243.8m and 31 March 2017: US$256.7m). No provision has
been made as at 30 September 2017 and 30 September 2016 for these possible exposures.
10. Disposal groups classified as held for sale
During the year ended 31 March 2017, the group announced the unbundling of the majority of its shareholding in its
subsidiary Novus Holdings Limited (Novus), operating in the print industry in South Africa. The assets and liabilities
of Novus were classified as held for distribution as at 31 March 2017. In August 2017 the group received regulatory
approval for the unbundling which was finalised during September 2017. Refer to note 11 for further details.
In May 2017 the group concluded the disposal of its joint venture Souq Group Limited (Souq), following the receipt of
regulatory approval. Souq was classified as held for sale as at 31 March 2017. Refer to note 11 for further details.
The group also concluded the disposals of various other smaller units of which the assets and liabilities were
classified as held for sale as at 31 March 2017.
The group had no assets and liabilities classified as held for sale as at 30 September 2017. Assets and liabilities
classified as held for sale in prior periods are detailed in the following table:
Six months ended Year ended
30 September 31 March
2017 2016 2017
Reviewed Reviewed Audited
US$'m US$'m US$'m
Assets - 26 403
Property, plant and equipment - 6 176
Goodwill and other intangible assets - 7 35
Investment in joint venture - - 102
Deferred taxation assets - 3 7
Inventory - 2 26
Trade and other receivables - 5 34
Cash and cash equivalents - 3 23
Liabilities - 5 70
Deferred taxation liabilities - 1 19
Long-term liabilities - - 6
Trade payables - 1 -
Accrued expenses and other current liabilities - 3 18
Bank overdraft - - 27
The group recognised a loss of US$nil (2016: US$1.6m and 31 March 2017: US$1.6m) on remeasuring the net assets
of businesses classified as held for sale to their fair value less costs of disposal. Fair value was determined based on
third-party sales prices and accordingly represent level 3 fair-value measurements.
11. Business combinations, other acquisitions and disposals
In August 2017 the group invested US$74m to acquire a controlling interest in its associate Takealot Online (RF)
Proprietary Limited (Takealot), the leading etailer in South Africa. Following the investment, the group holds a 58%
effective interest (54% fully diluted) in Takealot. The transaction was accounted for as a business combination with
an effective date of August 2017. The total purchase consideration amounted to US$123m representing the fair value
of the group's previously held equity interest in Takealot. A gain of US$20m has been recognised in "(Losses)/gains
on acquisitions and disposals" in the income statement on the remeasurement of the group's previously held equity
interest in Takealot to its fair value. The US$74m cash invested remains within the group following the transaction
and is accordingly not disclosed as part of the consideration transferred by the group or assets of Takealot acquired,
although it did affect the amount of goodwill recognised in the business combination. The purchase price allocation:
property, plant and equipment US$13m; cash and deposits US$105m; inventories US$28m; trade and other
receivables US$4m; intangible assets US$107m; trade and other payables US$27m; deferred tax liabilities US$30m
and the balance of US$81m to goodwill. The main classes of intangible assets recognised in the business combination
were trade names and brands, customer relationships and technology. The transaction gave rise to the recognition of
non-controlling interest of US$83m, which has been measured at the non-controlling interest's proportionate share of
the identifiable net assets of Takealot as at the acquisition date.
The main factor contributing to the goodwill recognised in the acquisition is Takealot's market presence. The goodwill
that arose is not expected to be deductible for income tax purposes.
The following relates to the group's investments in its equity-accounted investees:
In May 2017 the group invested US$426m in Delivery Hero AG (Delivery Hero), a global online food-ordering and
delivery marketplace. On 30 June 2017, Delivery Hero successfully completed an initial public offering of its shares,
a process during which the group invested a further US$47m. Following these investments, the group holds an 11%
effective interest (10% fully diluted) in Delivery Hero. In June 2017 the group invested US$61m in Bundl Technologies
Private Limited (Swiggy), the operator of a first-party food-delivery marketplace in India. Following the investment,
the group holds a 16% effective interest (15% fully diluted) in Swiggy. The group accounts for its interests in these
investees as investments in associates on account of its board representation.
In May 2017 the group invested US$99m in Kreditech Holding SSL GmbH (Kreditech), a provider of consumer lending
and financial services. The group has also committed to provide convertible loan funding of up to EUR20m to Kreditech
in future. Following the investment, the group holds a 38% effective interest (31% fully diluted) in Kreditech. The group
accounts for its interest in Kreditech as an investment in an associate.
During May 2017 the group invested US$132m in its associate MakeMyTrip Limited (MakeMyTrip) as part of a funding
round. In August and September 2017, following MakeMyTrip's issue of share options to its employees, the group
invested US$23m to maintain its relative shareholding. Following these transactions, the group holds a 43% effective
interest (40% fully diluted) in MakeMyTrip.
The group invested US$71m for an additional interest in its associate Flipkart Limited (Flipkart) in April 2017. The
additional interest was acquired from existing shareholders of Flipkart. Flipkart undertook various funding rounds
during the reporting period in which the group did not participate. These funding rounds resulted in a dilution of the
group's interest in Flipkart and in the recognition of an aggregate net dilution gain of US$11m in "Dilution losses on
equity-accounted investments" in the income statement. Following the dilutions, the group holds a 14% effective
interest (13% fully diluted) in Flipkart.
The following relates to significant disposals by the group during the reporting period:
During May 2017 the group disposed of its investment in its joint venture Souq Group Limited for a consideration of
US$173m. A gain on disposal of US$89m has been recognised in "(Losses)/gains on acquisitions and disposals" in
the income statement following the transaction.
In September 2017, following the receipt of regulatory approval, the group distributed the majority of its shareholding
in Novus Holdings Limited (Novus) to its shareholders. The group recognised the distribution as an in specie dividend,
reducing retained earnings by US$69m, being the fair value of the distributed Novus shares. A loss on disposal of
US$145m has been recognised in "(Losses)/gains on acquisitions and disposals" in the income statement following
the distribution, being the difference between the fair value of the distributed Novus shares and the book value of
the assets distributed as well as the reclassification of reserves of US$112m. After the distribution, the group holds a
19% shareholding in Novus and accounts for its interest as an available-for-sale investment.
12. Issue of listed bond
The group issued a 10-year US$1bn international bond in July 2017. The bond matures in July 2027 and carries a fixed
interest rate of 4.85% per annum. The proceeds were partially utilised to repay the group's US$700m international
bond which matured in July 2017. The remaining proceeds will be utilised for general corporate purposes, including
acquisitions.
13. Financial instruments
The group's activities expose it to a variety of financial risks such as market risk (including currency risk, fair-value
interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The condensed consolidated interim report does not include all financial risk management information and
disclosures required in the annual financial statements and should be read in conjunction with the group's annual
financial statements for the year ended 31 March 2017. There have been no material changes in the group's credit,
liquidity, market risks or key inputs used in measuring fair value since 31 March 2017.
The fair values of the group's financial instruments that are measured at fair value at each reporting period, are
categorised as follows:
Fair-value measurements at
30 September 2017 using:
Quoted prices
in active
markets for Significant
identical other Significant
assets observable unobservable
or liabilities inputs inputs
(level 1) (level 2) (level 3)
US$'m US$'m US$'m
Assets
Available-for-sale investments 40 2 -
Forward exchange contracts - 24 -
Currency devaluation features - - 4
Liabilities
Forward exchange contracts - 50 -
Earn-out obligations - - 64
Interest rate and cross-currency swaps - 74 -
Currency devaluation features relate to clauses in content acquisition agreements that provide the group with
protection against significant currency devaluations. The fair value of currency devaluation features is measured
through the use of discounted cash flow techniques.
The fair value of shareholders' liabilities is determined using a discounted cash flow model. Business-specific
adjusted discount rates are applied to estimated future cash flows.
For earn-out obligations, current forecasts of the extent to which management believes performance criteria will
be met, discount rates reflecting the time value of money and contractually specified earn-out payments are used.
Changes in these assumptions could affect the reported fair value of these financial instruments. The fair value of
level 2 financial instruments is determined with the use of exchange rates quoted in active markets and interest rate
extracts from observable yield curves.
Fair-value measurements at
31 March 2017 using:
Quoted prices
in active
markets for Significant
identical other Significant
assets observable unobservable
or liabilities inputs inputs
(level 1) (level 2) (level 3)
US$'m US$'m US$'m
Assets
Available-for-sale investments 11 2 -
Forward exchange contracts - 2 -
Currency devaluation features - - 6
Liabilities
Forward exchange contracts - 106 -
Shareholders' liabilities - - 18
Earn-out obligations - - 24
Interest rate swaps - 8 -
The group discloses the fair values of the following financial instruments, as their carrying values are not a
reasonable approximation of their fair values:
30 September 2017
Carrying Fair
value value
Financial liabilities US$'m US$'m
Capitalised finance leases 1 177 1 171
Publicly traded bonds 3 200 3 423
31 March 2017
Carrying Fair
value value
Financial liabilities US$'m US$'m
Capitalised finance leases(1) 1 211 1 199
Publicly traded bonds 2 900 3 041
Note
(1) Includes financial liabilities classified as held for sale.
The fair values of the capitalised finance leases have been determined through discounted cash flow analysis. The
fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments as
at the end of the reporting period.
14. Related party transactions and balances
The group entered into various related party transactions in the ordinary course of business. There have been no
significant changes in related party transactions and balances since the previous reporting period.
15. Events after the reporting period
The group signed an agreement to invest EUR660m (approximately US$775m) in its associate Delivery Hero AG (Delivery
Hero) during September 2017. The transaction is subject to regulatory approval. Following the investment, the group
will hold an approximate 24% interest in Delivery Hero on a fully diluted basis.
In October 2017 the group committed to an investment of US$100m in Remitly Inc. (Remitly), the largest independent
digital remittance company in North America. The transaction is subject to regulatory approval. Following the
investment, the group will hold an approximate 20% interest in Remitly on a fully diluted basis.
Following the receipt of regulatory approval in November 2017, the group acquired a 100% interest in The Car Trader
Proprietary Limited (Auto Trader) for cash consideration of R514m (approximately US$36m).
16. Pro forma financial information
The group has presented certain revenue and trading profit metrics on a constant currency, organic basis
(the pro forma financial information) in the tables below. The pro forma financial information is the responsibility
of the board of directors (the board) of Naspers Limited and is presented for illustrative purposes. Information
presented on a pro forma basis has been extracted from the group's management accounts, the quality of which
the board is satisfied with.
Shareholders are advised that, due to the nature of the pro forma financial information and the fact that it has been
extracted from the group's management accounts, it may not fairly present the group's financial position, changes
in equity, results of operations or cash flows.
The pro forma financial information has been prepared to illustrate the impact of changes in foreign exchange
rates and changes in the composition of the group on its results for the periods ended 30 September 2017
and 30 September 2016 respectively. The following methodology was applied in calculating the pro forma
financial information:
1. Foreign exchange/constant currency adjustments have been calculated by adjusting the current period's results
to the prior period's average foreign exchange rates, determined as the average of the monthly exchange rates
for that period. The organic pro forma financial information quoted is calculated as the constant currency results,
arrived at using the methodology outlined above, compared to the prior period's actual IFRS results. The relevant
average exchange rates used for the most significant currencies were: South African rand (2017: 0.0757; 2016:
0.0690); Polish zloty (2017: 0.2714; 2016: 0.2572); Russian rouble (2017: 0.0172; 2016: 0.0154); Chinese yuan renminbi
(2017: 0.1483; 2016: 0.1512); Indian rupee (2017: 0.0155; 2016: 0.0149); Brazilian real (2017: 0.3134; 2016: 0.3000); and
Nigerian naira (2017: 0.0028; 2016: 0.0037).
2. Adjustments made for changes in the composition of the group relate to acquisitions and disposals of
subsidiaries and equity-accounted investments, as well as to changes in the group's shareholding in its equity-
accounted investments. The following significant changes in the composition of the group during the respective
reporting periods have been adjusted for in arriving at the pro forma financial information:
Period ended 30 September 2017
Basis of Reportable Acquisition/
Transaction accounting segment Disposal
Social network
Dilution of the group's interest in Tencent Associate services Disposal
Dilutions of the group's interest in Flipkart Associate Ecommerce Disposal
Disposal of the group's interest in Souq Joint venture Ecommerce Disposal
Acquisition of the group's interest in Delivery Hero Associate Ecommerce Acquisition
Acquisition of the group's interest in Kreditech Associate Ecommerce Acquisition
Effect of merger of ibibo with MakeMyTrip Associate Ecommerce Acquisition and
disposal
Acquisition of the group's interest in Swiggy Associate Ecommerce Acquisition
Acquisition of the group's interest in Takealot Subsidiary Ecommerce Acquisition
Disposal of the group's interest in Novus Subsidiary Media Disposal
Disposal of Allegro and Ceneo Subsidiary Ecommerce Disposal
Disposal of Netretail Subsidiary Ecommerce Disposal
The net adjustment made for all acquisitions and disposals that took place during the period ended
30 September 2017 amounted to a negative adjustment of US$298m on revenue and a negative adjustment
of US$101m on trading profit.
An assurance report issued in respect of the pro forma financial information, by the group's external auditor,
is available at the registered office of the company.
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial
information are presented in the table below:
Six months ended
30 September
2016 2017 2017 2017 2017 2017 2017 2017
A B C D E F(2) G(3) H(4)
Group
Group composi-
composi- tion
tion acquisi- Foreign Local
disposal tion currency Local currency
adjust- adjust- adjust- currency growth IFRS
IFRS(1) ment ment ment growth IFRS(1) % %
US$'m US$'m US$'m US$'m US$'m US$'m change change
Revenue
Internet 4 889 (345) 82 (36) 2 348 6 938 52 42
Social network
services 3 510 (29) 14 (81) 1 943 5 357 56 53
- Tencent 3 426 (26) - (93) 1 934 5 241 57 53
- Mail.ru 84 (3) 14 12 9 116 11 38
Ecommerce 1 379 (316) 68 45 405 1 581 38 15
- Etail 753 (163) 51 17 219 877 37 16
- Travel 67 52 (20) 1 28 128 24 91
- Marketplaces 193 (193) - - - - - (100)
- Payments 83 (5) 17 3 28 126 36 52
- Classifieds 196 - - 18 75 289 38 47
- Food delivery 20 - 8 1 27 56 >100 >100
- Other 67 (7) 12 5 28 105 47 57
Video entertainment 1 645 (28) - 40 120 1 777 7 8
Media 284 (7) - 24 14 315 5 11
Corporate services 1 - - - - 1 - -
Intersegmental (31) - - - 21 (10) 68 68
Economic interest 6 788 (380) 82 28 2 503 9 021 39 33
Trading profit
Internet 1 241 (69) (37) (34) 719 1 820 61 47
Social network
services 1 533 (12) (6) (38) 661 2 138 43 39
- Tencent 1 501 (11) - (41) 666 2 115 45 41
- Mail.ru 32 (1) (6) 3 (5) 23 (16) (28)
Ecommerce (292) (57) (31) 4 58 (318) 17 (9)
- Etail (128) 23 (14) (3) (12) (134) (11) (5)
- Travel (58) 11 4 - 12 (31) 26 47
- Marketplaces 83 (83) - - - - - (100)
- Payments (30) (6) (8) (1) 12 (33) 33 (10)
- Classifieds (117) - - 8 64 (45) 55 62
- Food delivery 1 - (8) 1 (2) (8) >(100) >(100)
- Other (43) (2) (5) (1) (16) (67) (36) (56)
Video entertainment 226 (3) - 4 7 234 3 4
Media 12 - 8 1 - 21 - 75
Corporate services (6) - - - (2) (8) (33) (33)
Economic interest 1 473 (72) (29) (29) 724 2 067 52 40
Notes
(1) Figures presented on an economic-interest basis as per the segmental review.
(2) A + B + C + D + E.
(3) [E/(A+B)] x 100.
(4) [(F/A)-1)] x 100.
Six months ended
30 September
2016 2017 2017 2017 2017 2017 2017 2017
A B C D E F(1) G(2) H(3)
Group
Group composi-
composi- tion
tion acquisi- Foreign Local
disposal tion currency Local currency
adjust- adjust- adjust- currency growth IFRS
IFRS ment ment ment growth IFRS % %
US$'m US$'m US$'m US$'m US$'m US$'m change change
Other metrics
reported
Development spend
- economic interest 496 - (9) 12 (29) 470 (6) (5)
- consolidated 387 - (57) 11 (10) 331 (3) (14)
Consolidated revenue 2 958 (403) 69 94 389 3 107 15 5
Consolidated
ecommerce revenue 1 068 (370) 69 32 232 1 031 33 (3)
Consolidated
trading profit 45 (19) (11) 12 43 70 165 56
Core headline earnings, calculated on a constant currency basis, amounted to US$1.53bn.
Development spend is not an IFRS measure and has therefore been excluded from the assurance report
issued by the group's external auditor.
Notes
(1) A + B + C + D + E.
(2) [E/(A+B)] x 100.
(3) [(F/A)-1)] x 100.
Independent auditor's review report on interim financial statements
TO THE SHAREHOLDERS OF NASPERS LIMITED
We have reviewed the condensed consolidated interim financial statements of Naspers Limited in the accompanying
interim report, which comprise the condensed consolidated statement of financial position as at 30 September 2017 and
the related condensed consolidated income statement and condensed consolidated statements of comprehensive income,
changes in equity and cash flows for the six months then ended, and selected explanatory notes 1 to 15.
Directors' responsibility for the interim financial statements
The directors are responsible for the preparation and presentation of these interim financial statements in accordance
with the International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council and the requirements of the Companies Act of South Africa, and for such internal control as
the directors determine is necessary to enable the preparation of interim financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express a conclusion on these interim financial statements. We conducted our review in
accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed
by the Independent Auditor of the Entity. ISRE 2410 requires us to conclude whether anything has come to our attention
that causes us to believe that the interim financial statements are not prepared in all material respects in accordance with
the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements.
A review of interim financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform
procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and
applying analytical procedures, and evaluate the evidence obtained.
The procedures in a review are substantially less than and differ in nature from those performed in an audit conducted
in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these interim
financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed
consolidated interim financial statements of Naspers Limited for the six months ended 30 September 2017 are not
prepared, in all material respects, in accordance with the International Financial Reporting Standard, (IAS) 34 Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies
Act of South Africa.
Other matter
We have not reviewed future financial performance and expectations expressed by the directors included in the
commentary in the accompanying interim financial statements and accordingly do not express an opinion thereon.
PricewaterhouseCoopers Inc.
Director: Brendan Deegan
Registered Auditor
Cape Town
29 November 2017
Administration and corporate information
Directors
J P Bekker (chair), B van Dijk (chief executive), E M Choi, H J du Toit, C L Enenstein, D G Eriksson, R C C Jafta, F L N Letele,
G Liu, D Meyer, R Oliveira de Lima, S J Z Pacak, T M F Phaswana, V Sgourdos, M R Sorour, J D T Stofberg, B J van der Ross
Company secretary
G Kisbey-Green
Registered office
40 Heerengracht, Cape Town 8001, South Africa
(PO Box 2271, Cape Town 8000, South Africa)
NASPERS LIMITED
+27 (0)21 406 2121
40 Heerengracht
Cape Town 8001
www.naspers.com
Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein 2001, South Africa
(PO Box 4844, Johannesburg 2000, South Africa)
Sponsor
Investec Bank Limited
ADR programme
Bank of New York Mellon maintains a GlobalBuyDIRECTSM plan for Naspers Limited. For additional information, please
visit 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: Bank of New York Mellon, Shareholder Relations Department - GlobalBuyDIRECTSM, 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.
Date: 29/11/2017 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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