MUMBAI: The South African media giant, Naspers has posted solid financials for the financial year ended 31 March 2013 with consolidated revenues growing at a healthy 27 per cent. Started about a century ago in one country as a traditional print media business, Naspers has been building a multinational group of media and e-commerce platforms. Against a background of reporting healthy performance over the past few years, Naspers reminds its investors of its growth strategy and reinforces this with the financials it reported in 2013.

NOTE: 1 Rand (R) = Rs 5.95

Financial overview of the figures reported in 2013

Naspers consolidated revenues have shot up by 27 per cent to R50.2billion (bn) owing to the organic expansion of existing businesses and acquisitions, which are also supplemented by the depreciation of the rand. The falling rand has had a positive effect when Naspers foreign revenues are translated into the home currency (R-Rand). Naspers expansion and acquisitions have also leveraged the company?s position with its net interest borrowings amassing to R630m, a 21.8 per cent rise from last year?s R517m.

Development spends which were focused mainly on the expansion of e-commerce business and the roll-out of pay television services across Africa accelerated to R4.3bn as against R2.8bn in 2012. Meeting with these expenses through the income statement have resulted in consolidated trading profits remaining flat at R5.7bn.

Naspers? equity associates, Tencent and Mail.ru have followed suit in positively contributing a healthy R7.3bn to core headline earnings.

Macro-economic down turn in Brazil and increased online competition negatively impacted revenues from the company?s print segment. The setback is coupled with the impairment of equity-accounted capital amounting to R2.1 bn mainly relating to print media investment.

Despite these, Naspers core headline earnings spiked upwards by over 20 per cent to R22.16 per N ordinary share. Also, higher capital expenditure during 2013 has stunted the free cash flows to R3.5bn, lower than last year?s number.

Segmental performance of Naspers during 2013

On an aggregate basis, the internet boom has led to revenues expanding to R34.6bn a jump of over 80 per cent year on year. China?s largest internet service portal and Naspers equity associate, Tencent grew healthily in a competitive environment and garnered over 564m internet users in China at the end of 2012. Its Russian associate Mail.ru also grew over 40 per cent in revenues (In local currency) and boasts a 64m internet user-base in the Russian markets.

The increasing trend of online shopping has led the e-commerce revenues doubling to R11.4bn. Naspers has extended the breadth of its product offerings with greater emphasis on e-retailing and online classifieds. While the heavy investments in this sector have still to break even, the company maintains a positive overall outlook.

Increasing its pay television net subscriber base in Africa to 1.1m, with a reach to more than 6.7m households across the 48 countries has generated R30.3bn revenues, a rise of 20 per cent as against last year.

Producing over 6,000 hours per annum of local broadcasting in South Africa, Nigeria and Kenya, Naspers launched seven more local entertainment channels during the year. The sports channel SuperSport continues to be the largest funder of sport in Africa, contributing more to the sports bodies than any government.

Diversion of advertisement spends to the internet and the cut down in advertisers? budgets have paved a rocky road for the print media globally. This sector remains the most battered for Naspers with almost flat revenues all year round.

Naspers board has recommended a 15 per cent increase in the annual gross dividend to 385c per listed N ordinary share and 77c per unlisted ordinary share.

Naspers acquisitions in the financial year 2013

In the quest of expanding organically, Naspers acquired a 79 per cent stake in Netretail in June 2012. The target company is an online retailer with operations in Czech Republic, Poland, Hungary, Slovakia and Slovenia. Naspers says that the fair value of the acquisition amounted to R1.8bn.

In August 2012, the group acquired a 10 per cent interest in Flipkart Privte, a leading e-commerce platform in India for R858m.

Following this, the group also acquired a controlling stake in Dante International S.A. trading as eMag in October 2012. The target company which is a leading online retailer in Romania was acquired for a consideration of R728m. During the same month Naspers also acquired a 29.6 per cent interest in the online retailer, Souq Group.

In March earlier this year, Naspers contributed its Slando.ru and OLX.ru assets as well as R462m in cash in exchange for a fully diluted interest of 18.6 per cent in a leading general classifieds platform in Russia - Avito Holdings AB.

The group also made various other smaller acquisitions at a combined cost of R450m.