Chris Spillane
NASPERS, Africa’s largest company by market value, yesterday said first-half earnings increased 39 percent on growth in e-commerce, TV and the contribution from Hong Kong-based Tencent Holdings.
Operating profit was R2.25 billion in the six months through September, compared with R1.62bn a year earlier, the Cape Town-based company said. Revenue rose 20 percent to R34.36bn.
The company is seeing “meaningful increases” in internet traffic, chief executive Bob van Dijk said.
“We aim to build leading positions in markets that we believe have the potential to grow significantly faster than mature economies,” the company said.
Naspers dominates satellite TV in Africa and has interests in emerging markets around the world, including stakes in Tencent and Russian Internet company Mail.ru Group.
The company expanded its online ads business earlier this month with a joint venture with companies including Oslo-based Schibsted across four countries, including Brazil and Indonesia.
Internet revenue gained 44 percent to R35.82bn, and now accounted for more than half of the total, Naspers said. The online and e-commerce businesses were growing faster than pay television and print, meaning an increasing amount of income came from outside South Africa.
Naspers shares declined 1.62 percent to R1 487.35 on the JSE at the close, after a 1.84 percent gain on Monday.
The stock is up 35 percent this year, valuing the company at R620bn. South Africa’s benchmark share index is up 9.1 percent.
The company added 342 000 customers to its pay TV business and now has 8.4 million subscribers to a service that offers English Premier League soccer and dramas such as Game of Thrones.
Sales from the unit increased 18 percent to R20.19bn and Naspers expects further customer growth as African markets move from analogue TV to digital decoders.
The target is to develop online classifieds, internet retail and digital terrestrial TV to deliver growth, chief financial officer Basil Sgourdos said.
Development spend increased by 42 percent to R4.4bn as the company invested in online retail and payment businesses. Further spending in the second half could result in lower core headline earnings for that period, Naspers said.
Tencent contribution to revenue gained 46 percent to R22.37bn, while Mail.ru added R1.31bn, an increase of 19 percent. Advertising revenues in Russia were hurt by political uncertainty and a weakening rouble. – Bloomberg