Naspers half year earnings up 39%, classifieds turn profitable

Naspers media statement

Group highlights:

  • Revenues increased 29% year on year to $11bn (2017: $9bn).
  • Trading profit grew 34% year on year to $2bn (2017: $1.7bn)
  • Core headline earnings grew 39% to $1.7bn (2017: $1.2bn).
  • Ecommerce reduced trading losses materially on the back of strong contributions from classifieds, which turned profitable including letgo, and the business-to-consumer (B2C) segment.
  • Video-entertainment business to list on the JSE as MultiChoice Group.
  • Strong balance sheet with net cash of $8.7bn positions the group to pursue growth.
  • $750m invested in classifieds, payments, and online food-delivery.
  • IRR of 22% on existing assets (excluding Tencent) since 2008.
  • Flipkart stake sold to Walmart for $2.2bn, at an internal annual rate of return of around 29%.
A logo sits on display inside the headquarters of Naspers Ltd., at the Media24 Ltd. office complex in Cape Town. Photographer: Halden Krog/Bloomberg

Basil Sgourdos, Group Chief Financial Officer, said:

“We executed well in the first half of the financial year, growing revenue 29% to $11bn, and trading profit 34% to $2bn. The classifieds business is now profitable including letgo. Trading-loss margins in etail and payments narrowed considerably as the businesses delivered solid revenue growth and continued to scale. Naspers continues its track record of locking in strong returns with the recent sale of Flipkart.”

Bob van Dijk, Group Chief Executive, added:

“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, commented:

“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.”

Key metrics

1H FY19

1H FY18

$’m

$’m

Revenue

11,022

8,987

Trading profit

2,035

1,665

Core headline earnings

1,664

1,196

Free cash in/(out)flow

271

(96)

Consolidated development spend

233

331

Our approach

We believe great ideas can change the world – addressing big societal needs, bringing people closer together, improving their lives, making them more enjoyable and enriching. We believe the best ideas often start locally, so we look for exceptional entrepreneurs that meet the needs of the people and communities they understand best. And when we see those same needs elsewhere, with our backing and their ambition, the businesses we invest in and help build can become global game changers. When we invest in entrepreneurs, it’s a partnership. We bring resources, scale, experience, and expertise, and they bring their insight, ideas, passion and ambition. Together, we work hard to take their company as far as it can go.