By Chris Spillane
Nov. 25 (Bloomberg) — Naspers Ltd., Africa’s largest media company, said first-half earnings increased 39 percent on growth in e-commerce, TV and the contribution from Hong Kong-based Tencent Holdings Ltd.
Operating profit was 2.25 billion rand ($204 million) in the six months through September, compared with 1.62 billion rand a year earlier, the Cape Town-based company said in a statement today. Revenue rose 20 percent to 34.36 billion rand.
The company is seeing “meaningful increases” in Internet traffic, Chief Executive Officer Bob van Dijk said in the statement. “We aim to build leading positions in markets that we believe have the potential to grow significantly faster than mature economies,” the company said.
Naspers dominates satellite TV in Africa and has interests in emerging markets around the world, including stakes in Tencent and Russian Internet company Mail.ru Group Ltd. The company expanded its online ads business earlier this month with a joint venture with companies including Oslo-based Schibsted ASA across four countries, including Brazil and Indonesia.
Internet revenue gained 44 percent to 35.82 billion rand, and now accounts for more than half of the total, Naspers said. The online and e-commerce businesses are growing faster than pay television and print, meaning an increasing amount of income comes from outside South Africa.
TV Subscribers
The company added 342,000 customers to its pay TV business and now has 8.4 million subscribers to a service that offers English Premier League soccer and dramas such as Game of Thrones. Sales from the unit increased 18 percent to 20.19 billion rand and Naspers expects further customer growth as African markets move from analogue T.V. to digital decoders.
The target is to develop online classifieds, Internet retail and digital terrestrial T.V. to deliver growth, Chief Financial Officer Basil Sgourdos said.
Development spend increased by 42 percent to 4.4 billion rand as the company invested in online retail and payment businesses. Further spending in the second half could result in lower core headline earnings for that period, Naspers said.
Tencent contribution to revenue gained 46 percent to 22.37 billion rand, while Mail.ru added 1.31 billion rand, an increase of 19 percent. Advertising revenues in Russia were hurt by political uncertainty and a weakening ruble.
Naspers shares have gained 38 percent this year, valuing the company at 632 billion rand. South Africa’s benchmark share index is up 9.7 percent. – BLOOMBERG
