Media and internet giant Naspers on Friday announced its results for the half-year to September 2018, showing a 29% increase in revenue to $11 billion, driven by e-commerce ventures and its stake in Tencent.
Trading profit grew 34% year on year to $2.0 billion, while core headline earnings grew 39% to US$1.7 billion.
Diluted headline earnings per N ordinary share was up to 632 US cents, from 206 cents previously.
Acquisitions in the period totalled over $700 million as Naspers said it continued to invest in existing and new businesses in classifieds, payments and food-delivery verticals.
Naspers said its video-entertainment segment had a steady six months, growing subscriber numbers by a sizeable 400,000 households to 13.9 million households. Revenue increased 3% to $1.8 billion, but trading profit remained relatively flat at $211 million, it said.
The South African video-entertainment business delivered solid trading profits and generated meaningful cash flows. Subscriber growth was strong in the middle- and mass-market segments, with some churn in premium subscribers as a number of households in this segment appear to be experiencing strains on their disposable income.
The ongoing change in subscriber mix resulted in average revenue per user reducing from $27 last year to $25 this year. In September 2018, the group announced that it will list its video-entertainment business on the JSE as MultiChoice Group.
Also in South Africa, Naspers said that Takealot, South Africa’s number one B2C platform, extended its market leadership and grew gross merchandise volume 58%. Its electronics, home and kitchen categories recorded the highest growth, while its food-delivery service, Mr D Food, increased market share and grew GMV by almost 200%.
Takealot also announced the merger of its online fashion brand, Superbalist, with Spree, the online fashion brand owned by Media24.
Media24 however, saw revenue down 7% due to pressure on advertising and circulation revenue.
For the group, excluding equity-accounted investments (associates and joint ventures), consolidated revenue grew 8% to $3.3 billion. Ecommerce was the main driver of growth, with revenues increasing 32%.
Revenues in the internet segment, which now contributes 82% of total group revenue compared to 77% a year ago, were up 31% to $9.0 billion, while trading profits rose 30% as ecommerce and Tencent continued to stimulate growth.
E-commerce revenue increased 28% to US$2.0bn with meaningful contributions from classifieds, payments, food delivery and B2C.
Tencent, meanwhile, grew total group revenue 39% year on year to RMB147.2 billion for its six months to 30 June 2018. Naspers’ share in Tencent amounts to 31%.
Bob van Dijk, group chief executive, said: “In September, we took a significant step in our evolution into a global consumer internet company, announcing our intention to list our video entertainment business. We believe this will unlock value for Naspers shareholders while creating an empowered, top 40 JSE-listed African entertainment company.
“It means in future, effectively 100% of our revenues and profits will come from online businesses. Throughout the period we continued to invest in growth, strengthening our online food-delivery, classifieds, and payments businesses.”
Koos Bekker, Naspers chairman, added: “The team made good progress in the first half of the year, building a focused consumer internet company that delivers long-term returns for shareholders. We also contribute meaningfully to the communities we serve, and hope to accelerate investing in early-stage technology companies in South Africa and abroad.”
Shares in Naspers climbed on Friday, to R2,822, having endured a bumpy ride so far in 2018 as the group’s share price is heavily linked to Tencent.