Naspers profit doubles on Tencent, e-commerce performance

Naspers, a global internet group and technology investor, has posted impressive earnings results with a doubling of profits, driven by the stellar performance of its e-commerce division. The company, listed on the Johannesburg Stock Exchange (JSC), saw its share price surge by 3.99%, making it one of the best-performing shares on the exchange. Processor, another key player, followed closely behind with a 3.6% increase. The market was pleasantly surprised by Naspers' e-commerce segment turning profitable, a feat that was achieved through strategic decisions and hard work by the entire team. Evan Tu, the interim group CEO, credited the team's collaborative efforts for this milestone achievement. Tu, who is set to become the company's group president and chief investment officer effective July 1, emphasized that this success is just the beginning and highlighted a continued trajectory of growth and profitability. The financial results for the fiscal year 2023-2024 showcased a 19% increase in top-line revenue, outpacing industry peers who grew at a rate of 7%. The company's key divisions, including iFood, payments, and FinTech, all reported substantial growth contributing to the overall positive performance. iFood, a $1.2 billion business, saw a 22% growth, while the payments division recorded a remarkable 38% increase. Tu also mentioned the strategic emphasis on leveraging artificial intelligence (AI) across the business, with a focus on enhancing productivity and operational efficiency. Naspers has made significant investments in AI, leading to tangible improvements in various business segments. Tu expressed optimism about the economic outlook for South Africa and the broader African continent. The company is actively exploring growth opportunities and remains committed to driving sustainable growth and innovation. When asked about the recent political developments in the country, Tu underscored the importance of stability and market signals, indicating a cautious approach towards future investments. Naspers' relationship with Tencent, a key investment holding, was also discussed during the interview. Tu reiterated the company's admiration for Tencent's ecosystem and highlighted the partnership beyond financial returns. Naspers has initiated a share buyback program to capitalize on the discounted valuation of its own stock. The buyback program has generated significant value for shareholders, with over $32 billion created through the initiative. While the company's shareholding in Tencent has decreased to 25%, Tu clarified that there are no plans to further reduce the stake beyond the ongoing repurchase program. In conclusion, Naspers' impressive financial results underscore its strategic focus on e-commerce growth, operational efficiency, and strategic investments in AI. The company's commitment to sustainable growth and value creation for shareholders positions it as a key player in the global technology and internet industry.