WATCH: Naspers has the firepower to grow, says CEO

Cape Town – Naspers [JSE:NPN] has the financial firepower and appetite for more mergers and acquisitions, CEO Bob van Dijk said on Tuesday.

Speaking to Fin24 from the Netherlands after Naspers released its year-end results, Van Dijk said Naspers is in a strong position to find the right investments.

Asked about his war chest to spend on mergers and acquisitions, he said: “We still have significant firepower. There is a part of it that is onshore in South Africa and some of it is offshore.”  

WATCH: Interview with Bob van Dijk

“If we want to do more or bigger things, we always have an opportunity to do so.”

Core headline earnings grew 30% to R11.2bn in the year ended March 31 2015, while R10.7bn was invested in development spend in growing the business.

“In terms of e-commerce, we’re already in many markets, particularly our classifieds business, which has a very large footprint,” said Van Dijk.

“We basically look at markets and specific businesses on their own merits,” he said. “We will invest in a new geography if we understand the business model and believe it has a good theme. So we’re not dogmatic on where we invest and in which models, but we’re very critical about specific investment opportunities we get in.”

Results well received

While Bloomberg said the results missed the R11.6bn average estimated by eight of its analysts, Van Dijk said investors were relatively satisfied.

“There was consensus that it was around that mark,” he said. “Maybe it was slightly below, maybe it was somewhat on. I think generally the results have been well received so far.”

The results were mainly due to increased earnings contributions from Tencent, in which Naspers has a 34% stake, and some of the profitable e-commerce businesses.

“We have no intention of reducing our shareholding in Tencent,” said Van Dijk. “There is a lot of competition no doubt, but I think Tencent is well positioned.”

Tencent opportunity

Explaining his belief in the Chinese investment, he said the Tencent management team is “one of the very best in the world”.

“The Chinese internet market is the largest in the world, but still growing much faster than many others,” he said. “You’ve seen a lot of innovation happen in China before it happens anywhere else.

“It’s pretty good at being ahead of the growth of innovation,” he said. “If you take those three ingredients… with that ability to change, I think that’s an opportunity rather than something we would worry about.”  

Van Dijk, who is based in the Netherlands, has spent most of his first year as CEO on the “internet side of the house, but also on the video entertainment and I do check in with the Media24 team quite regularly”.

On April 1 2014, Van Dijk replaced Koos Bekker, who moved to the role of chairperson on April 1 2015 after a one-year sabbatical.

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