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Financial review
This review reflects highlights of the group’s financial perform ance for the past year. Full details can be found in the annual financial statements presented here.

OVERVIEW OF GROUP RESULTS

Revenue

Revenue growth of 30% in the aggregate to R26,7 billion was recorded over the period. Drivers were both existing operations, which grew by 19%, and new acquisitions, which added 11%.

The internet segment was boosted by the inclusion of Allegro and Ricardo (formerly Tradus). Pay-television revenues increased by 29%, thanks to improved gross subscriber growth.

Operating profit

Operating profit before amortisation and other gains/losses increased by 21% to R5,1 billion (2008: R4,2 billion). A reduction in group margins followed sharper competition in pay-television markets. Total development costs were R1,2 billion (2008: R1,1 billion).

Finance income

Net interest cost for the year amounted to R306 million, compared with net income of R503 million in the previous year. This resulted from funding new acquisitions. Other finance income includes preference dividends of R377 million (2008: R336 million) and mark-to-market losses of R375 million, compared with gains of R166 million in the previous year.

Equity-accounted results

Naspers’s share of the equity-accounted results of its associates, mainly Tencent, mail.ru and Abril, grew to R1,47 billion (2008: R654 million). All three enterprises performed excellently under exceptional leadership teams.

The impairment of equity-accounted investments refers mostly to our withdrawal from a German mobile-TV project, due to an unfavourable regulatory environment.

Discontinuance of operations

A R2,97 billion profit from discontinued operations relates to the sale of pay-television businesses in Greece and Cyprus. The proceeds are once-off in nature and were applied to long-term debt.

Headline earnings and core headline earnings

The net effect of the above is that core headline earnings for the year grew by 9% to R4,4 billion. A “Calculation of headline and core headline earnings” is detailed in the table on the right.
 

Calculation of headline and core headline earnings  

          
      Year ended  
31 March  
2009  
R'm  		 Year ended  
31 March  
2008  
R'm  
Net profit attributable to shareholders     5 761   3 418  
Adjusted for:            
– impairment of goodwill and other assets     26   48  
– loss/(profit) on sale of assets     27   (15) 
– discontinuance of operations     (2 965)  82  
– gain on loan settlement     —   (87) 
– (profit)/loss on sale of investments     (10)  512  
– impairment of equity-accounted investments     214   348  
      3 053   4 306  
Total tax effects of adjustments     5   (486) 
Total minority interest of adjustments     7   (14) 
Headline earnings     3 065   3 806  
Discontinued operations     (129)  (258) 
Headline earnings from continuing operations     2 936   3 548  
Headline earnings     3 065   3 806  
Adjusted for:            
– (profit)/loss from discontinued operations     (129)  48  
– creation of deferred tax assets     (58)  (244) 
– treasury-settled share scheme charges     258   47  
– amortisation of intangible assets     958   410  
– fair-value adjustments and currency translation differences     279   (71) 
Core headline earnings     4 373   3 996  
 
As regularly reported to shareholders, the board remains of the view that core headline earnings is an appropriate measure of the group’s it excludes once-off and non-operating items.
 

SEGMENTAL REVIEW

The segmental analysis below was prepared on an economic interest basis and includes our proportionate share of our major associates’ results.
    Revenue     EBITDA  
    2009  
R’m  		 2008  
R’m  		 % 
Change  		 2009  
R’m  		 2008  
R’m  		 %  
Change  
Pay television   14 858   11 542   29   5 197   4 272   22  
Internet *   7 256   3 037   +100   1 985   613   +100  
Technology   1 514   1 081   40   (75)  (126)  41  
Print **   10 520   9 082   16   1 363   1 357   —  
Corporate services   4   —   —   (210)  (40)  —  
Economic interest   34 152   24 742   38   8 260   6 076   36  
Less: Associates   (7 462)  (4 224)      (2 234)  (1 176)     
Consolidated   26 690   20 518   30   6 026   4 900   23  
                           
    Operating profit before
amortisation and other
gains/losses  		 Operating profit  
    2009  
R’m  		 2008  
R’m  		 % 
Change  		 2009  
R’m  		 2008  
R’m  		 %  
Change  
Pay television   4 737    3 940   20   4 269    3 845   11  
Internet *   1 696   483   +100   1 026   363   +100  
Technology   (132)    (168)  21   (308)  (250)  (23) 
Print **   1 058   1 149   (8)  762   707   8  
Corporate services   (213)  (42)  —   (212)  (43)  —  
Economic interest   7 146   5 362   33   5 537   4 622   20  
Less: Associates   (2 030)  (1 124)      (1 754)  (744)     
Consolidated 5 116   4 238   21   3 783   3 878   (2) 
* Including our share of Tencent and mail.ru.
** Including our share of Abril.
 
 
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Naspers