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First-half profit at Naspers almost halves

Results reflect a drop in gains from its stake Tencent.
Image: Waldo Swiegers, Bloomberg

South African e-commerce giant Naspers reported a 48% slump in half-year profit on Friday, at the better end of its guidance range after a previously-flagged drop in gains on investments at China’s Tencent.

Founded more than 100 years ago, Naspers has transformed itself from a newspaper publisher into an empire worth almost $70 billion, with its 31% stake in Tencent the jewel in its crown.

Naspers said earlier this week its profits could fall by up to 53.6% after a reduction in fair value gains on investments held by Tencent from $1.4 billion in 2018 to $400 million this year.

Headline earnings per share, the main profit measure in South Africa, fell to 326 cents from a revised 624 cents a year earlier, but Naspers said the performance of its main businesses was promising.

“The progress of our core segments, which are growing fast and scaling well, gives us confidence in our ability to continue identifying opportunities to unlock significant value,” its statement said.

Its shares were up 1.4% by 1327 GMT.

Naspers said core profits from continuing operations rose 8% to $1.7 billion, largely thanks to improving profitability at Tencent and its more established e-commerce businesses.

A hefty discount between Naspers’ own value and that of its stake in Tencent prompted the company to spin off its internet assets and list them separately in Amsterdam earlier this year, in a company called Prosus.

Core headline earnings from continuing operations also stood at $1.7 billion at Prosus, a 7% increase.

In its payments and fintech business, Naspers said the core payment service provider business had reached profitability.

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Question to the clever guys : what would be the most astounding longterm short instrument to invest on Naspers if I had a view to 50% drop in under 24 months?

This is the by definition THE journal-entry company right now : shades of Enron. Zero correlation between reported results and cashflow. May as well toss a seventeen sided dice.

Naspers literally just got lucky with Tencent… their entire business model is just based on trying to get lucky again by throwing money at companies..

Look at lack of quality and innovation in Multichoice.. they are hanging on a thread with sports…

Naspers will slowly start to fall over the years..without Tencent they are nothing… and even Tencent is set to fall soon in the Chinese market

Why is Tencent “set to fall”?

Yes why

Hey dog! You don’t have the faintest idea what Naspers is about, do you? 🙂

Well at least they still made a profit and are worth billions.

You are only as good as your last financial results.
If Tencent declines further, and all indications are that they will, will Naspers have enough eggs in other baskets to cover those losses?
My guess is no.

End of comments.

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