Naspers earnings rise as classifieds business turns first profit

Naspers first-half earnings climbed 39% as it made further progress in turning a profit at its myriad Internet businesses, it said on Friday.

Core headline earnings were US$1.7-billion. The classifieds business is now profitable, even when including Letgo — which dragged that division down in the 2018 fiscal year. The online retail unit narrowed losses.

Turning classifieds profitable could help Naspers stop being defined by its blockbuster early investment in Chinese Internet giant Tencent.

The Cape Town-based company’s earnings are also based on the performance of several other online firms — from Brazil to Russia and India.

Naspers is working on closing an almost $28-billion valuation gap between its market value and that of the 31% stake it owns in Tencent. To help achieve that, it’s spinning off its pay-TV company in 2019 and may consider similar moves for other businesses.

Despite the valuation discrepancy, there is value in Naspers’s other Internet ventures, according to analysts at Barclays. The classifieds companies are worth $10-billion, the food delivery businesses $3.5-billion and the online payments firms $3-billion, they said in a note earlier this month.

Naspers shares have slumped 18% this year, tracking a 23% fall at Tencent. The stock traded 0.5% higher at R2 834.60 as of 3.27pm in Johannesburg.  — Reported with assistance from Janice Kew, (c) 2018 Bloomberg LP