FILE PHOTO: The headquarters of Media 24, owned by intenet, entertainment and media group Naspers, in Cape Town
JOHANNESBURG -  South Africa media and e-commerce giant Naspers reported a hefty 72 percent rise in annual profit on Friday, thanks to a strong showing from its Chinese money spinner Tencent. Naspers, which owns about 30 percent of the Chinese technology firm Tencent, said core headline earnings totaled $2.5 billion, or 581 cents per share, in the year ended March compared with $1.5 billion, or 337 cents per share, a year earlier.

Core headline EPS is Naspers’ main profit measure that strips out non-operational and one-off items. deploy

Naspers lines up R110  billion war chest

Naspers plans to also deploy its $8.2 billion (R110  billion) war chest to step up growth in its e-commerce ventures, its chief executive said, part of a push to cut the company’s dependence on its Chinese money spinner Tencent.

Founded more than 100 years ago in Stellenbosch, South Africa, Naspers has transformed itself from a newspaper publisher into Africa’s biggest company, a $104 billion behemoth with private equity-style investments in e-commerce platforms such as auction sites, classified and online retail.

Naspers owes its hefty valuation to a 31 percent stake in Tencent, which is worth $149 billion, or roughly 40 percent more than Naspers. The discount has prompted some investors to urge Chief Executive Bob van Dyk to find ways to narrow it.

Van Dyk, at the helm since 2014, has ruled out spinning off the Tencent stake, saying the discount would be closed when the company’s other e-commerce ventures swing into profit.

“We will use our strong balance sheet to accelerate the growth of our classifieds, food delivery and fintech businesses globally,” van Dyk said in a statement. “Also to pursue other growth opportunities when they arise.”

While the cash will be used primarily to grow existing businesses, he said, it could also be used for mergers and acquisitions.

Naspers netted $1.6 billion from the sale of its 11 percent stake in Indian e-commerce start-up Flipkart in May, almost two months after raising around $10 billion from the sale of a 2 percent stake in Tencent.

-REUTERS