JOHANNESBURG (Reuters) – 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.
Naspers logo is seen in Johannesburg, South Africa, October 9, 2019. REUTERS/Siphiwe Sibeko
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.
Reporting by Emma Rumney; Editing by Jason Neely and Mark Potter