Naspers' earnings skyrocket
South African tech and media giant Naspers on Friday recorded positive results for the year to March 2017, increasing revenue by 19% year on year to $14.6 billion. Core headline earnings at Naspers rose 41% to $1,8 billion for the year. Positive results from Chinese behemoth Tencent took the edge of its stuttering pay-TV and other e-commerce ventures, with businesses outside SA contributed 80% of revenues, compared to 77% a year ago.
"Naspers produced satisfactory results for the year," said Naspers chair Koos Bekker (pictured). "Tencent continued its growth, while we scaled various e-commerce businesses. Video entertainment is facing new competition from international players based in the USA."
Naspers noted that the financial results were satisfactory, despite tough conditions in the South African economy, stating that the weak rand resulted in cost inflation and margin pressure.
"The group now has 21 profitable e-commerce businesses, delivering $699m in revenues and $229 million in trading profits," said CEO Bob van Dijk.
"Classifieds performed well, boosted by Avito and accelerated growth in our European markets led by Poland, Ukraine, Romania and Portugal. Our B2C, travel and payments businesses all generated strong revenue growth and were further strengthened by additional investments to drive scale."
Founded in 1915, JSE-listed Naspers is a global internet and entertainment group and one of the largest technology investors in the world. Operating in more than 120 countries and markets with long-term growth potential, Naspers builds leading companies that empower people and enrich communities. The group has sizeable investments in Tencent, Mail.ru, MakeMyTrip and Flipkart.
"In the year ahead we will keep scaling the e-commerce businesses to drive profitability and cash generation. In our more mature businesses, such as media and video entertainment, the focus will be on managing macroeconomic and sectoral headwinds through cost containment," said CFO Basil Sgourdos.
"We will continue to drive innovation and transformation of existing businesses, while investing to fuel the next wave of growth," he added.
Naspers, South Africa's biggest company by market value, has invested around $4 billion since 2012 into the business to drive development in e-commerce platforms and reduce its dependence on Tencent and pay-TV - the latter is a money-spinner in its native South Africa, but faces fierce competition in other regions.
The $85 billion multinational holds private equity-style investments in e-commerce platforms such as auction sites, online retail and e-classifieds, with much of its valuation down to a 33% Tencent stake.