Tencent drives profit increase at Naspers

Johannesburg - Naspers [JSE:NPN], Africa's largest company by market value, on Tuesday reported a 22% increase in first-half earnings, helped by a strong contribution from Hong Kong-based internet business Tencent.

Naspers, which has classifieds and e-commerce interests across dozens of countries including India and Brazil, increased revenue by 20% to R34.4bn.

"I am really pleased with the progress that we are making in our internet business," chief executive Bob van Dijk said. "We are making good headway particularly in our mobile activities."

The Cape Town-based company made the bulk of its revenue from Tencent, of which Naspers owns more than a third. Tencent's revenue grew by 46% to R22.4bn.

Naspers e-commerce operations also grew strongly to R12bn, up 43% from last year, as it snapped up internet firms across emerging markets.

Earlier this month, Naspers teamed up with Schibsted and Telenor in Norway and Singapore Press Holdings to accelerate its e-commerce operations in four fast-growing emerging markets.

READ: Naspers ties up with rivals to boost online offering

"They will no longer be fighting a strong competitor (Schibsted)," Reuben Beelders, portfolio manager at Gryphon Asset Management, said. "One would anticipate that there will be reduced cash burn."

Naspers is also in talks to sell its Swiss online retailer Ricardo in a deal potentially worth up to $413m, according to people familiar with the sale, which would allow it to invest more in its target markets.

Naspers increased its development spending by more than 40% to R4.4bn as it increased its stakes in online retailers and invested in expanding a global payments business.

Core headline earnings for the six months to end-September were 1 528 cents per share from 1 248c a year ago.

Its shares are up 35% this year, giving it a market value of $57.5bn (about R634bn). By comparison, Johannesburg's blue-chip index is up about 8%.

ALSO READ: Naspers delivers solid growth


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