Africa’s largest tech investor and the most valuable company, Naspers is reporting a 41% rise in its headline earnings for the year to USD1.8 billion.
Full group revenue rose by 19% on a year on year basis to USD14.6 billion. Using the local currency of South Africa, Naspers said its revenue rose by 29% when adjustments for acquisitions and disposals are factored in.
For the full year, the group’s consolidated development spend was up 22% compared 13% to USD861 million.
The result shows that Tencent, the largest Internet company in China where Naspers has 60% stake is still the mainstay of the group. Tencent reported RMB151.9 billion for the year which is approximately 48% year on year growth.
Nsspers said it expended the sums on to of its newest startupsL LetGo, Showmax to accelerate their growth. Showmax is Naspers answer to combat the global incursion of Amazon to its African market where its media and entertainment business is struggling to stay afloat.
Its media and entertainment unit, DSTV and Multichoice was acknowledged by the group to have been impacted by the harsh economic condition. Earlier this month, Naspers said it was entering a content partnership with MTN Group, Africa’s largest mobile network that has been rumoured to be in talks with Naspers to acquire DSTV, its payTV arm.
Naspers disclosed that DSTV’s total subscriber base now stand at 11,9 million households. The figure has not shown serious lift as the company did disclose in its advertising package earlier this year that its total subscriber base was 11 million, out of which .
Naspers said the digital terrestrial television (DTT) business added a total of 597,000 homes. To stem the tide of losses in the unit, Naspers said it focused on bouquet restructuring, better customer retention and cost reduction, ‘is improving the business for the long term’.
Providing context to the result, “The group now has 21 profitable eCommerce businesses, delivering US$699m in revenues and US$229m in trading profits”.
He added that “Classifieds performed well, boosted by Avito and accelerated growth in our European markets led by Poland, Ukraine, Romania and Portugal. Our B2C, travel and payments businesses all generated strong revenue growth and were further strengthened by additional investments to drive scale,” he said.
“In the year ahead we will keep scaling the ecommerce businesses to drive profitability and cash generation. In our more mature businesses, such as media and video entertainment, the focus will be on managing macroeconomic and sectoral headwinds through cost containment,” said CFO, Basil Sgourdos. “We will continue to drive innovation and transformation of existing businesses, while investing to fuel the next wave of growth,” he added.
However, for the year, Naspers has taken various steps to deleverage and change the perception that it is a ‘one-hit wonder’ company that is only basking in the glory of its USD33 million investment in China’s Tencent that rose in value by geometric proportion.
Naspers along side other investors sold Souq.com, Middle East’s largest eCommerce site to Amazon after rejecting offers from Emaar Malls, the region’s largest real estate investor.
The group also shocked the world when it closed down Markaforni, its Turkish eCommerce company that did not break even since it started business.