Tencent continues to underpin the Naspers growth story, with the Chinese company contributing a stronger-than-expected R6,2bn to the JSE-listed group’s core headline earnings in the six months to end-September 2014.
Indeed, the Internet segment remains the fastest growing part of the Naspers stable and now contributes 58% of group revenues. Internet revenues were up by 44% to R35,8bn.
About 72% of Naspers group revenues, measured on an economic-interest basis, are now earned offshore.
Tencent’s Weixin/WeChat messaging platform increased monthly active users by 39% to 468m accounts year on year.
A strong performance by Tencent, partially offset by higher development spend in Naspers’s e-commerce businesses, resulted in a 67% increase in trading profit to R6,5bn.
“The growth in revenue and increased earnings contribution from Tencent, Mail.ru, pay-television and some e-commerce assets is partially offset by expanded development spend, resulting in core headline earnings growing 24% to R6,1bn,” Naspers said on Tuesday.
Mail.ru, Naspers’s investment in Russia, was hit by “geopolitical issues”, but nevertheless managed to increase its contribution to core headline earnings by 30% to R528m. The top line grew at a slower 22%.
Consolidated group revenues for the period were R34,4bn, 20% higher than last year driven by growth in the e-commerce and pay-television segments. Trading profit was, however, down by 4% to R2,8bn, dragging lower by bigger losses in the e-commerce segment. Earnings before interest, tax, depreciation and amortisation were largely unchanged at R4,2bn.
Despite the growing losses in the e-commerce space — R2,4bn in the latest six-month period, from R1,9bn previously — revenues climbed by 43% to R12,1bn. Development spend was R3,6bn.
In online classifieds, Naspers’s footprint now covers about 40 countries and it said that in many of its e-retail businesses around the world, revenue growth is accelerating.
Pay-TV subsidiary MultiChoice also performed well, though earnings growth lagged the top line due to investment in infrastructure. Pay-TV trading profit grew by 11% to R5bn on the back of subscriber growth. R642m was spent on digital terrestrial television roll-out and on online video initiatives.
Revenue in pay-TV was up by 18% to R20,2bn. The subscriber base reached 8,4m, with MultiChoice now operating digital terrestrial TV networks in 11 countries, with about 873 000 subscribers.
“We continue to scale our transmission platform and place decoders in markets where we expect analogue switch-offs in the foreseeable future,” Naspers said. “These switch-offs, once implemented, should provide momentum for further subscriber growth.”
MultiChoice now has 1,2m customers with personal video recorder decoders. — © 2014 NewsCentral Media
