Naspers’ half-year profit boosted by e-commerce businesses
- Naspers said revenue rose by 16 per cent year-on-year to $6.8 billion driven by its businesses outside South Africa, which accounted for 80 per cent of revenue.
Naspers, Africa’s largest company by market capitalization, announced today that its core headline earnings – the company’s main profit measure – rose by 31 per cent to $914 million for the half-year ended September 30.
The Johannesburg-based company attributed the increase in profit to the strong performance of its Internet and e-commerce divisions, which includes a significant stake in Tencent, a Chinese Internet giant.
“We experienced a satisfactory first six months to the financial year,” said Koos Bekker, Naspers’ Chairman. “The ecommerce businesses and Tencent performed well, while video entertainment and print did their best in a pretty tough environment.”
Naspers said revenue rose by 16 per cent year-on-year to $6.8 billion driven by its businesses outside South Africa, which accounted for 80 per cent of revenues as against 75 per cent in the same period last year.
Revenues in the Internet division, which accounts for 72 per cent of Naspers’ revenues, rose by 30 per cent to $4.9 billion. The division’s trading profits increased 54 per cent driven by Tencent and higher profits or contracting losses in several ecommerce units.
“The group now has 23 profitable ecommerce businesses, up from 18 a year ago,” said Bob van Dijk, Naspers’ CEO. “Classifieds delivered strong results across the portfolio, boosted in particular by Avito. Our retail, travel and payments businesses all performed well.”
Naspers’ said its digital terrestrial television (DTT) business and African video entertainment division were impacted by weak currencies across the continent even as subscribers reached 11 million. The division reported an 8 per cent drop in revenue to $1.6 billion, with trading profits also dropping by 43 per cent to $226 million.
“The focus remains on giving subscribers the very best quality local and international content, while managing costs, improving customer service and retaining customers in an environment where there is intensifying competition from global players such as Amazon, Netflix, Apple and Google. ShowMax, the subscription video-on-demand service, is growing steadily,” the company said.
As part of its regular portfolio reviews, Naspers said it concluded four ecommerce transactions. The company said it sold Allegro, a Polish auction website, for $3.25 billion and agreed to the merger of ibibo and MakeMyTrip – two of India’s online travel booking platforms. Naspers said it acquired Citrus Pay, an Indian online payment firm. In the United States, the company said it agreed to merge Wallapop and Letgo – two classifieds websites.
“The group will continue investing in long-term opportunities, and seek further promising models within the internet segment,” said Basil Sgourdos, Naspers’ Chief Financial Officer. “In the US, we expect to accelerate Letgo’s development spend to further strengthen its position. In video entertainment, we will battle a tough environment by reducing costs to counter the impact of falling currencies and we aim to grow DTT customers by offering increased value.”
With a valuation of about $60 billion, Naspers is a global Internet and entertainment company with operations in 130 countries. The company has made investments in internet companies, including Tencent, a Chinese Internet giant; Konga, a Nigeria-based online retailer; and OLX, a classifieds website. Naspers also controls Multichoice, owners DSTV, and other associated media brands such as Super Sport.
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