Naspers earnings soar as revenue climbs to $14.6 billion

 ·23 Jun 2017
Naspers up rise increase

Naspers on Friday recorded positive results for the year to March 2017, increasing revenue by 19% year on year to US$14.6 billion.

Excluding acquisitions, disposals and currency movements, growth was 29%. Businesses outside South Africa contributed 80% of revenues, compared to 77% a year ago, the internet giant said.

Core headline earnings grew 41% to US$1.8 billion, while Naspers recommended the annual gross dividend be increased by 12% to 580 cents, from 520 cents previously.

  • Internet revenue climbed 29% to $10.621 billion
  • Ecommerce revenue climbed 11% to $2.929 billion
  • Tencent revenue climbed 39% $7.506 billion
  • revenue climbed 8% to $186 million
  • Video entertainment was flat at $3.401 billion
  • Media revenue declined 3% to $588 million

“Naspers produced satisfactory results for the year,” said Naspers chair Koos Bekker. “Tencent continued its growth, while we scaled various e-commerce businesses. Video entertainment is facing new competition from international players based in the US.”

Foreign currencies affect the group’s segments to varying degrees. In video entertainment, weakened currencies have a large impact on earnings (given pricing in local currencies, but a high US dollar cost base).

In the internet segment, the effect is lessened by a diverse geographic spread and a cost base generally denominated in local currencies, Naspers said.

Revenue in the internet segment, which now accounts for 73% of group revenues (67% last year), was up 29%, mainly due to Tencent’s excellent results and increased profitability of the more mature e-commerce assets. Naspers has a 30% stake in China based Tencent.

“The group now has 21 profitable e-commerce businesses, delivering US$699m in
revenues and US$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.”

Read: Naspers backed Delivery Hero prepares for IPO

The group acquired Citrus Pay in the Indian online-payments market and merged its Indian online travel platform, ibibo, with Nasdaq-listed MakeMyTrip.

The US operations of mobile app-only classifieds platform letgo were merged with Wallapop and results to date are encouraging, Naspers said.

In January 2017, the group disposed of Allegro and Ceneo in Poland, generating net proceeds of US$3.2 billion.

The group also expanded its footprint in the online food delivery segment, whilst Naspers Ventures made a number of investments in earlier-stage technology companies.

The digital terrestrial television (DTT) business added a total of 597,000 homes.

“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.

By 15h50, shares in Naspers climbed 2.2% to R2,628 on the JSE, giving the group a market cap of R1.14 trillion.

Read: Naspers expects bumper earnings  

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