The world is changing fast and to keep up you need local knowledge with global context.
Africa’s biggest company by market value raised HK$76.9 billion ($9.8 billion) in March by selling a 2 percent stake in Tencent – its flagship asset and by far the most lucrative. Naspers then netted a $1.6 billion profit from the sale of a stake in Indian e-commerce startup Flipkart to Wal-Mart Inc. in May.
“The reason why we freed up the money is that there is a lot of opportunity to invest at the moment in our core growth sectors: Food delivery, classified or in our payments business,” Chief Executive Officer Bob Van Dijk said in a phone interview Friday, after Naspers reported a 72 percent rise in full-year earnings. “That is where the bulk of the money will be invested in.”
The South African company has long relied on its stake in fast-growing WeChat creator Tencent to accelerate profit growth, yet its myriad investments in newer online companies around the world are beginning to bear fruit. Classifieds businesses in Brazil and Russia helped to generate the first-ever profit at the division – when U.S. app Letgo is excluded – while Naspers is working to improve profitability at Africa’s largest pay-TV provider.
A recent new investment was the $89 million spent last month on Berlin-based Frontier Car Group – a vehicle-sales company that operates both online and out of physical lots. “People want an easy, hassle-free way to sell their cars,” Van Dijk said. “The model is being replicated by Frontier Cars in Africa, Latin America and Asia. There have to be local tweaks to make it work, but the concept is a very good one.”
Core headline earnings per share, which exclude one-time items, were $2.5 billion in the year through March, Cape Town-based Naspers said in a statement Friday. The company raised the dividend by 12 percent to R6.50 a share.
The shares gained 3.1 percent to R3,315.27 by the close in Johannesburg, the biggest rise since June 1, giving a market value of R1.5 trillion ($111 billion).
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.