Tencent Investor Naspers Sees Profit Boost Ahead of Spinoff

(Bloomberg) -- Naspers Ltd.’s 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.

. Core headline earnings per share, which strip out non-operational items, are expected to have grown by between 31% and 33%, the Cape Town-based company said in a statement ahead of more detailed financials scheduled for June 21.

. 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’s 31% stake in Chinese internet giant Tencent Holdings Ltd. to about $128 billion. The company now makes up about 25% of the FTSE/JSE Africa All-Share Index, compared with 5% in 2013.

. To rectify that, 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, Naspers said last month.

. While Naspers didn’t give a reason for the improving operating performance, Tencent reported a better-than-expected 17% 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 are striving to reduce that gap.

. The shares rose 0.8% to 3,489.41 rand as of 11:35 a.m. in Johannesburg, valuing Naspers at 1.5 trillion rand ($101 billion). The stock has gained 24% this year, compared with a 13% rise on the FTSE/JSE Africa Top40 Index.

. To contact the reporter on this story: Thomas Pfeiffer in London at tpfeiffer3@bloomberg.net

. To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, John Bowker

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Tencent Investor Naspers Sees Profit Boost Ahead of Spinoff

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