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Naspers positive growth bolstered by Tencent investment

Johannesburg - Naspers produced positive results for the year ending 31 March 2017, with a 41% growth, spurred by strong earnings from Chinese money spinner Tencent.

Core headline earnings were reported at $1.8bn or 406 cents per share with annual gross dividend increased to 580 cents, up from 520 cents.

The contribution to core headline earnings by associates and joint ventures was up 50% to US$2.4bn after adjusting for these non-recurring items.

On the back of contributions from Tencent and ecommerce, group revenue grew 19% to US$14.6bn or 29% in South African currency.

READ: Naspers shareholders to get boost in earnings

Consolidated revenue increased 3% mainly due to strong performances by the ecommerce businesses which grew 11%.

While Naspers continued to scale ecommerce businesses, video entertainment has become both more mature and more competitive.

“The video-entertainment segment continued to face the effects of weakened African currencies and higher content costs. This translated into a marginal decrease in year-on-year revenue and significant pressure on profitability, although the business recorded strong subscriber growth, particularly outside South Africa,” the company said.

Net interest expense on borrowings was down 17% to US$142m, due to lower utilisation of credit facilities and, to a lesser extent, cash retained from the US$3.2bn Allegro disposal.  

In January 2017 the group concluded the merger of its online travel businesses ibibo and redBus with Nasdaq-listed MakeMyTrip, creating India's leading online travel business. Post merger, Naspers holds a 40% fully diluted stake in MakeMyTrip. To fund further expansion, the group invested an additional US$132m in MakeMyTrip after year-end.

READ: Naspers invests R5.6bn in German food delivery service

In Poland the disposals of Allegro and Ceneo concluded in January 2017, generated net proceeds of US$3.2bn. These businesses contributed revenue of US$327m and a trading profit of US$137m to the results for the year.

Naspers recently announced an investment of €387m for a minority stake in Germany-based Delivery Hero, the leading global online food ordering and delivery marketplace, at a valuation in line with Delivery Hero’s previous valuation.

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