HILARY GUSH, Johannesburg | Friday
SOUTH African media group Naspers has reported wider headline losses for the six months to end-September 2000 after heavy investments in Internet and technology development.
The losses were expected, and Naspers forecast more hefty spending on its tech businesses in the period ahead.
It realised exceptional profits of R3.5bn – mainly from the merger of OpenTV and Spyglass – lifting net income attributable to shareholders to R1.3bn from R598m.
Naspers owns more than two-thirds of MIH Holdings, whose subsidiary MIH Limited holds 36.5% of interactive television software maker OpenTV.
”The group’s turnover for this period amounted to R4.2bn, representing a total increase of 26%,” Naspers Chairman Ton Vosloo said. ”We invested aggressively in Internet and technology developments, resulting in an EBITDA loss of R115m.”
This compares to earnings before interest, tax, depreciation and amortisation of R8.0m in the first half of 1999.
Analysts said the figures were in line with expectations.
”Their strategy foresaw this Internet expansion and their OpenTV plans,” said one media analyst, who declined to be named.
He said moves in OpenTV’s share price would continue to drive Naspers’ share, which closed down almost 15% at R32 on Thursday ahead of the results on poor Nasdaq sentiment.
”OpenTV is extremely positive for Naspers as it is entrenching itself as the leader in interactive TV. Investors who hang in there with Naspers will be rewarded in the long term,” the analyst added.
Apart from its OpenTV interests, Naspers has large stakes in Internet service provider M-Web and pay TV channels. It owns a number of South Africa’s leading newspapers and magazines, has a book publishing arm and education interests.
Naspers said despite continued wild swings in investor sentiment towards the Internet sector, it would plough ahead with its development plans.
”It is clear that the Internet … will transform all the sectors of the market in which we are active. New investments will be made, and a growth in turnover, with substantial development costs, is forecast.”
It expected a steady performance in the pay-TV market, but said dollar strength was a concern which necessitated cost savings and price increases. In print media, circulation would keep steady, but trends in adspend would remain unpredictable.
In the short term, a healthy performance in book publishing was expected, but Naspers said in two to fours years the Internet would start affecting this market. – Reuters
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