Africa’s biggest company Naspers reported a hefty 72% rise in annual profit on Friday, on a strong showing from its Chinese money spinner Tencent, sending its share rising.
Founded more than 100 years ago in Stellenbosch, South Africa, Naspers has transformed itself from a newspaper publisher into a $104 billion behemoth with private equity style investments in e-commerce platforms such auction sites, classified and online retail.
Naspers, which owns about 31% of the Chinese technology firm Tencent, said core headline earnings totaled $2.5 billion, or 581 cents per share, in the year ended March compared with $1.5 billion, or 337 cents per share, a year ago.
Core headline EPS is Naspers’ main profit measure that strips out non-operational and one-off items.
Shares in Naspers rose 3.6% to R3 323 as of 13:36 GMT, outpacing a 1.5% rise in the blue-chip JSE Top-40 index.
Naspers owes its hefty valuation to its 31% stake in Tencent, which is worth $149 billion, or roughly 40% more than Naspers. The discount has prompted some investors to urge Chief Executive Bob van Dyk to find ways to narrow it.
Van Dyk, at helm since 2014, has ruled out spinning off the Tencent stake, saying the discount would be closed when the company’s other e-commerce ventures swing into profit.
However, the discount has been widening over the last year, confirming investors’ concerns that van Dyk and his team are not creating value with the company’s other businesses.
Naspers said its e-commerce division, which excludes Tencent and houses assets such as OLX, the biggest classifieds sites in India and Brazil, narrowed it core losses, or EBITDA, by 10% to $615 million.
- Moneyweb
