Naspers interim profits boosted by Tencent

JSE-listed media giant Naspers has reported a big jump in interim profit for the period ended September 2017, on the back of a a surge in its internet businesses which includes a stake in China’s Tencent Holdings.

Group core headline earnings, the board’s measure of sustainable operating performance, was US$1.5 billion – a 65% increase year on year.

Naspers, which owns a 34% stake in Tencent, said headline earnings climbed to $1.5 billion, or 350 cents per share, from $914 million, or 212 cents per share.

The group said that it delivered a solid performance for the six months to 30 September 2017 with group revenue, measured on an economic-interest basis, increasing 33% year on year to US$9.0 billion (or 39% in local currency and adjusted for acquisitions and disposals).

This is a 17% increase on last year’s growth rate with the e-commerce businesses being key drivers of the acceleration, it said.

Group trading profit increased by 40% (or 52% in local currency and adjusted for acquisitions and disposals) to US$2.1 billion, due to a healthy boost from Tencent and increased profitability in the e-commerce businesses – most notably classifieds, it said.

Additional highlights

  • Revenue – US$3.107 billion (up 5.0%, 2016: US$2.958 billion)
  • Headline earnings – US$1.510 billion (up 65.2%, 2016: US$914 million)
  • Profit before tax – US$1.224 billion (up 78.7%, 2016: US$685 million)
  • Profit for the period – US$1.076 billion (up 98.9%, 2016: US$541 million)

Internet businesses

The big performance came from the group’s internet business, where its stake in Tencent drove much of the profit.

The Chinese firm’s gaming and advertising businesses drove the company to an outstanding six months, with revenues growing 57% year on year. Meanwhile, Naspers’ Russian internet business also saw overall revenues grow 33% year on year.

Overall, robust growth saw internet revenues increasing 42% (52%) year on year to US$6.9 billion. Boosted by classifieds and another  exceptional performance by Tencent, trading profit for the internet segment was US$1.8 billion – up 47% (61%) year on year, Naspers said.

This segment now contributes 77% of group revenue, compared to 72% last year.

Revenue in Naspers’ e-commerce increased 15% year on year to US$1.6 billion. However, when measured in local currency and adjusted for  acquisitions and disposals, growth was 38% – an acceleration of 14 percentage points on last year’s growth rate, it said.

Video entertainment

Overall, the video-entertainment business recorded modest subscriber growth over the period with the total subscriber base closing at 12.2 million households on 30 September 2017, the group said.

In South Africa, DStv had a stable performance and continued to deliver healthy profits and cash flows. A further development  was the combination of the group’s Showmax offering with DStv Now, which is showing encouraging early results.

However, the  business still operates against a difficult and weakening economic backdrop, Naspers said.

Multichoice reported that its subscriber base grew by 278,000 to over 6.5 million. Its financial performance was flat compared to last year – with core headline earnings at R3.6 billion, and revenue at R19.4 billion.


Media24 (excluding Novus) achieved satisfactory results with the structural decline in traditional revenue streams offset by  significant cost-reduction initiatives throughout the business. Revenue increased 11% (5%) year on year to US$315 million, while trading profit grew 75%.


Going forward, the group said it will continue to drive scale to bring its e-commerce business to profitability and cash generation.

In addition, it will manage macro challenges in the more mature businesses through tight cost controls and continued  innovation and repositioning of businesses to counter increasing competition by global players.

The group will also continue  to invest in emerging businesses that may power future growth. Naspers’s balance sheet remains strong and the group’s current business plan is fully funded.

Read: Naspers share price hits R4,000

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