E-retail investor Naspers posts a big profit gain
June 30, 2015 10:20 AM
(Bloomberg)--Naspers Ltd., Africa’s biggest company by market value, said full-year earnings increased 30 percent due to growth from its investment in Tencent Holdings Ltd. of China and its online retail businesses.
Adjusted net income was 11.2 billion rand ($914 million) in the year through March compared with 8.6 billion rand a year earlier, the Cape Town-based company said in a statement after the market close on Monday. That missed the 11.6 billion-rand average estimate of eight analysts in a Bloomberg survey. Revenue rose 17% to 73.1 billion rand.
The company, which owns 34% of Chinese Internet operator Tencent has online-service interests in about 40 countries and is Africa’s biggest seller of pay TV. Naspers is scouring the globe for its next Internet bet as consumers shift from computers to smart devices.
The shares gained as much as 1.3% and traded 0.6% higher at 1,851 rand as of 10:12 a.m. in Johannesburg on Tuesday, boosting the year’s gain to 22% and valuing the company at 777 billion rand. Naspers said it would pay a gross full-year dividend of 4.70 rand, up 11% on fiscal 2014.
Sales growth was driven by the investments in Tencent and Russian Internet company Mail.ru Group Ltd., while sales from its online retail unit increased 36% to 27.8 billion rand. About 10.7 billion rand was spent on growing the business, up 33% on the previous year.
“The transition of Internet usage from desktop to mobile continues at a rapid rate” in China, Naspers said. “Mail.ru fared well in a rather turbulent geopolitical environment.”
Tencent delivered strong results as it continues to grow, the company said. The Shenzhen, China-based company’s Weixin mobile communication and retail platform helped drive its performance, while it expanded partnerships with several online retailers. Tencent is a major investor in JD.com, No. 1 In the 2015 Internet Retailer China 500.
Ifood, Naspers’ Brazilian online food delivery service, has about 80% of the country’s market share.
Naspers added 727,000 direct-to-home satellite TV users, giving it almost 8 million subscribers for a service that offers English Premier League soccer and dramas such as Game of Thrones. The company more than doubled its digital terrestrial TV users to 2.2 million as African governments began turning off analog signals.
The company is focusing on its online TV service and is producing more African content as it targets further growth in Kenya and Nigeria, according to the statement.
“Competition from international online players with global reach, such as Netflix, Amazon and Google, is increasing,” the company said.
Amazon.com Inc. is No. 1 in the 2015 Internet Retailer Top 500, and Netflix is No. 6.