Naspers soars on satellite, rockets on Chinese growth

The headquarters of Hong Kong-based Tencent. Its contribution to Naspers gained 46%. (Bobby Yip, Reuters)

The headquarters of Hong Kong-based Tencent. Its contribution to Naspers gained 46%. (Bobby Yip, Reuters)

Naspers Ltd, Africa’s largest company by market value, said first-half earnings increased by 39% on growth in e-commerce, TV and the contribution from Hong Kong-based Tencent Holdings Ltd.

Operating profit was R2.25-billion ($204-million) in the six months through September, compared with R1.62-billion a year earlier, the Cape Town-based company said in a statement this week. Revenue rose by 20% to R34.36-billion.

The company was seeing “meaningful increases” in internet traffic, its chief executive officer, Bob van Dijk, said in the statement. “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 television in Africa and has interests in emerging markets around the world, including stakes in Tencent and the Russian internet company Mail.ru Group Ltd.

The company expanded its online ads business earlier this month with a joint venture with several companies, including the Oslo-based Schibsted ASA, in four countries, including Brazil and Indonesia.

Internet revenue gained 44% to R35.82-billion and accounted for more than half of the total, Naspers said.

E-commerce growth rate
The online and e-commerce businesses are growing faster than pay television and print, meaning an increasing amount of income comes from outside South Africa.

Naspers shares are up 35% this year, valuing the company at R620-billion.
South Africa’s benchmark share index is up 9.1%.

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 by 18% to R20.19-billion and Naspers expects further customer growth as African markets move from analogue TV to digital decoders.

The chief financial officer, Basil Sgourdos, said the target was to develop online classifieds, internet retail and digital terrestrial TV to deliver growth.

Naspers also said development spend increased by 42% to R4.4-billion with the company investing 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’s contribution to revenue gained 46% to R22.37-billion, and Mail.ru added R1.31-billion, an increase of 19%.

Advertising revenues in Russia were hurt by political uncertainty and a weakening rouble. – © Bloomberg

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