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Naspers eyes more opportunities in food delivery

Nov 30 2018 19:57
Lameez Omarjee

Food delivery is a key area of focus for internet and media group Naspers [JSE:NPN], says Chief Financial Officer Basil Sgourdos.

In a telephonic interview with Fin24, following the release of the multinational internet and media group's half-year results on Friday, Sgourdos said all businesses delivered ahead of internal plans set, and the group would continue to uncover "great opportunities" for investment. 

The results reflected revenue growth of 29% to $11bn. Core headline earnings grew 39% to $1.7bn and trading profit grew 34% to $2bn.

Contributions from the food delivery segment - which includes businesses Delivery Hero, iFood and Swiggy - tripled revenue growth to $181m. 

"We are at the very early stages of the tech disruption around food. Most of our businesses are sitting at 1%  penetration," said Sgourdos.

"We have leadership positions in most of the 40 markets we are in," he added. The group will focus on increasing penetration and investment to grow that area of the business.

In his remarks on the results release, CEO Bob van Dijk said that in future, 100% of the group's revenue and profit would come from online businesses.

During the period, Naspers announced its intention to unbundle video entertainment business MultiChoice. Asked if the group, which is the second largest company listed on the JSE, would consider unbundling other traditional businesses, Sgourdos said that Naspers was instead looking at additional listings of businesses, or segments.

Tencent

Sgourdos also spoke on Nasper's 31% stake in Chinese tech giant, Tencent, which has yielded revenue growth of 39% year-on-year for the group during the six-month period.

"The long-term future of Tencent is unquestionable in my mind," said Sgourdos. Tencent, which has faced headwinds, having lost over $200bn in value this year, still managed to report growth during the third quarter, Sgourdos noted.

"Overall growth remains strong," he said of Tencent. The company has been expanding its product lines, he explained. "It's a great company which will continue to innovate."

Naspers shares, which opened at R2 826.16 were trading 0.71% stronger at R2 840 by 15:40 on Friday.

*Fin24 is part of Media24, a subsidiary of Naspers.

*CORRECTION: This article was updated at 12:00 on December 2, 2018 to correctly state that Naspers' is in leadership positions in most of the 40 markets in which it operates. A previous version incorrectly stated 14. 

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