Naspers could be cut to junk at next review

NASPERS’S credit rating may be cut to junk at its next review by S&P Global Ratings.

The ratings agency said yesterday it had changed its outlook on Naspers’s BBB-credit rating to negative‚ indicating it may cut the media group’s rating to BB+ or worse within six months to two years.

BBB- is the lowest rating considered investment grade. Everything under that is “junk”.

“The outlook revision reflects our view that Naspers’s profitability will weaken in its 2017 fiscal year ending March 31‚ following its lacklustre reported revenues and profitability in 2016‚” S&P said in its analysis of Naspers.

In June‚ Naspers reported a 20% drop in aftertax profit of $1.26-billion (R17.9-billion) for its past financial year, during which its pay-TV subscriber base in South Africa and neighbouring countries fell by 288 000.

Naspers finds itself squeezed between lower revenue and rising costs because it pays US dollars to licence its programmes.– BDlive