OVERVIEW

In summary, Naspers recorded a 5% increase in revenues to R28bn for the past financial year. Operational profit advanced 10% to R5,4bn, whilst core headline earnings grew 22% to R5,3bn. Our financial performance is analysed in the financial review.

The internet industry showed bold growth in emerging markets. Our pay-television operations held up well, whilst the technology business returned to operational profitability. However, print businesses globally, including our own, suffered in the recession.

Over the past year the Naspers group continued to expand. Most emerging markets in which we operate survived the global economic downturn reasonably well, when compared to developed economies.

The internet segment, comprising mainly Allegro in Central Europe, Tencent in China and Mail.ru in Russia, all grew, with revenues up 24%.

Our pay-television businesses again proved resilient to economic conditions and recorded revenue growth of 12%, with slightly lower operating margins as we invested to grow the subscriber base. Irdeto, the TV technology business, also felt economic headwinds, but cut costs.

The print media businesses, however, suffered a 5% decline in its top line because of anaemic advertising revenues.

INTERNET

In aggregate, the internet segment recorded revenue up by 24% to R9,2bn. Operational profit grew to R2,4bn.

In China Tencent performed ahead of expectations with revenue higher by 49%. Registered peak concurrent users to the instant-messaging (IM) platform now total 105 million. Tencent’s contribution to core headline earnings increased by 76% to R2,1bn.

The strong rand had a significant effect on the other internet businesses where, nominally, revenues were marginally up and profits down. Calculated on a stable currency basis, we estimate revenues and operational profits would have grown 19%.

The Allegro platform in Poland continued to deliver solid growth. In local currency, gross merchandising value transacted on the platform grew by 20%, generating revenue growth of 24%. New services were launched.

In India ibibo, our joint venture with Tencent, is developing social-gaming and e-commerce platforms.

In Russia Mail.ru expanded its base to 81 million active email users. This business contributed R70m to our core headline earnings. This was impacted by increased taxes on dividend payments and the strong rand. Mail.ru has completed the acquisition of Astrum, the online games platform operator in Russia.

In Latin America BuscaPé was added to the group in September 2009. This unit is growing its core comparison shopping business and broadening its base by rolling out new services including electronic payments, classified advertising and affiliate advertising networks.

In South Africa 24.com remains a leading local internet publisher, growing its users by 34%.

PAY TELEVISION

Overall, the pay-television segment expanded revenues by 12%, due to subscriber growth of 634 000 net households. After a satisfactory festive season, subscriber growth did slow in the last quarter of the financial year. Operating margins were slightly lower due to the cost of building the subscriber base, as well as higher content costs resulting from increased competition and more local content production.

In South Africa the base grew by 450 000 to 2,85 million homes. The service now offers nine different bouquet offerings and three high-definition channels. With a strong content offering, including soccer, general entertainment and movies, the mid-priced Compact and Family bouquets attracted customers. Advertising revenues were marginally better. The coming year will see more competitors entering this market.

In the other 47 countries in the rest of sub-Saharan Africa, a focus on local content and additional sport delivered 184 000 additional subscribers, taking the base to 1,1 million homes. The Compact and Family bouquets stand at 447 000 subscribers. Hausa and Yoruba language channels were added in Nigeria.

SuperSport is now one of the main funders of local sports leagues across the African continent, which means higher content costs for us. However, if African sport is to become globally competitive, someone needs to fund it.

Mobile-TV operations were launched in Ghana, Kenya, Namibia and Nigeria, whilst we still await a licence in South Africa.

IRDETO

Irdeto delivered some 15,8 million conditional access units in the period under review, a 5% increase. Revenues in other divisions were flat due to the global slowdown. Consolidation of various technology businesses into Irdeto has reduced operating costs and this segment reversed an operational loss last year into a profit of R47m.

PRINT MEDIA

The print media operations in South Africa recorded a top-line decline of 5%. Circulation of newspapers and magazines held up remarkably, but advertising felt the blows. In a recession people read more, but advertisers spend less. Operating costs have been reduced and capital expenditure reigned in. We were able to grow market share marginally.

In Brazil the magazine publisher Abril also experienced a challenging year, particularly in advertising. This was largely offset with prudent cost controls. Abril’s contribution to our core headline earnings amounted to R318m (2009: R414m), partly influenced by the strong rand and a higher tax charge in the period.

DIVIDEND

The board recommends that the annual dividend be increased 14% to 235 cents (previously 207 cents) per N ordinary share, and 47 cents (previously 41 cents) per unlisted A ordinary share. If approved by shareholders, at the annual general meeting on Friday 27 August 2010, dividends will be payable to shareholders recorded in the books on Thursday 23 September 2010 and will be paid on Monday
27 September 2010. The last date to trade cum dividend will be on Thursday 16 September 2010. Shares will therefore trade ex dividend from Friday 17 September 2010.