Bloomberg News

Naspers Profit Growth Slows on Internet Investment Strategy

June 23, 2014

Naspers Ltd. (NPN), Africa’s largest company by market value, reported the slowest full-year profit growth in at least six years as the media provider invests in Chinese Internet and African TV businesses.

“China as an Internet market is clearly the largest in the world by far and the growth rate outstrips mature markets,” Chief Executive Officer Bob Van Dijk said by phone today from Hoofddorp, the Netherlands. The industry “is still in early days despite its enormous size, so exposure is something that I’m very bullish about.”

Adjusted net income increased by 1 percent to 8.6 billion rand ($810 million) in the 12 months through March, Cape Town-based Naspers said in a statement today. The company also announced a 1.6 billion-rand impairment charge after some e-commerce units including Markafoni of Turkey missed targets.

Naspers, which owns stakes in Hong Kong-based Tencent Holdings Ltd. (700) and Russian Internet company Group Ltd. (MAIL), is reporting its first earnings under Van Dijk, who replaced billionaire Koos Bekker as CEO on April 1. The company plans to spend more than 7 billion rand to expand digital-TV access in Africa and boost the e-commerce unit.

“We are seeing opportunities that require investment now and for several years,” Van Dijk said. “Over time what is sure is that we will see long-term returns that are encouraging. We are very excited about our holding in Tencent and have no intentions of changing it.”

Travel Time

Van Dijk, 41, will be based in Hoofddorp, a town near Amsterdam, and will split his working life between the Netherlands, Hong Kong and Cape Town. He’ll spend more than 70 percent of his time on the road and will visit South Africa every three to four weeks, he said. There are no plans to relocate Naspers’s Cape Town headquarters or its listing on the Johannesburg Stock Exchange.

Naspers shares declined as much as 6.3 percent, the most since April 11, and traded 3.3 percent lower at 1227.75 rand as of 1:13 p.m. in Johannesburg.

Bekker, who will become chairman in 2015, didn’t receive a cash salary or bonus and was paid entirely in company stock. That helped him build a personal fortune of of $1.8 billion. Van Dijk said his compensation will differ from Bekker’s though will retain a bias toward company performance. He declined to disclose details of his remuneration package.

Online Travel

Subscribers to Naspers’s pay-television service increased by 1.3 million to more than 8 million homes, the company said. Revenue rose 26 percent to 62.7 billion rand as Internet sales advanced 65 percent.

E-commerce businesses, including FashionDays, Brandsclub and Markafoni, missed targets, the company said. Naspers also wrote down its investment in Brazilian publisher Abril SA.

Naspers is unlikely to make any significant acquisitions in the immediate future though it may explore opportunities in the online travel business after buying redBus, an Indian online ticketing platform, for about 1 billion rand last year. The company also bought 31 percent of Russian children’s goods retailer for the equivalent of $19 million in February.

“The online travel space is a space we find interesting,” said Van Dijk, who left U.S. online trading company eBay Inc (EBAY:US). last year to join Naspers as head of e-commerce. “We’ll keep looking at merger and acquisition opportunities and we’ll be scrubbing them carefully.”

To contact the reporter on this story: Christopher Spillane in Johannesburg at

To contact the editors responsible for this story: Kenneth Wong at John Bowker, David Risser

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