Investment

Tencent investor Naspers expects profit boost ahead of spinoff

Bloomberg/Halden Krog

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The Cape Town-based firm state that its core headline earnings per share, which strip out non-operational items, are expected to have grown by between 31 per cent and 33 per cent.

Sunday 16, June 2019

(Bloomberg) --Naspers’ full-year earnings rose by as much as a third ahead of the technology group’s planned asset spinoff in Amsterdam, a move designed to reduce its dominance of Johannesburg’s stock exchange.

The market value of Africa’s biggest listed company has increased by five times in the past six years, largely due to growth in Naspers’ 31 per cent stake in Chinese internet giant Tencent Holdings to about $128 billion.

The company now makes up about 25 per cent of the FTSE/JSE Africa All-Share Index, compared with five per cent in 2013.

Additionally, Naspers plans to separate its global technology and e-commerce investments into a new company in the Netherlands next month. The move will reduce the need for South African institutional investors to sell shares to stay within exposure limits to a single stock while attracting new global shareholders.

While Naspers did not give a reason for improving operating performance, Tencent reported a better-than-expected 17 per cent rise in first-quarter net income last month.

The South African company’s stake in the Chinese firm is worth more than Naspers as a whole, and management led by Chief Executive Officer Bob Van Dijk is striving to reduce that gap.

 

TAGS : Johannesburg Stock Exchange, Naspers, FTSE/JSE Africa All-Share Index, Tencent

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