Tencent drives profit increase at South Africa's Naspers

By Helen Nyambura-Mwaura JOHANNESBURG (Reuters) - Naspers, Africa's largest company by market value, on Tuesday reported a 22 percent increase in first-half earnings, helped by a strong contribution from Hong Kong-based Internet business Tencent. Naspers, which has classifieds and e-commerce interests across dozens of countries including India and Brazil, increased revenue by 20 percent to 34.4 billion rand ($3.1 billion) (1.98 billion pounds). "I am really pleased with the progress that we are making in our Internet business," Chief Executive Bob van Dijk said. "We are making good headway particularly in our mobile activities." The Cape Town-based company made the bulk of its revenue from Tencent, of which Naspers owns more than a third. Tencent's revenue grew by 46 percent to 22.4 billion rand. Naspers e-commerce operations also grew strongly to 12 billion rand, up 43 percent from last year, as it snapped up Internet firms across emerging markets. Earlier this month, Naspers teamed up with Schibsted and Telenor in Norway and Singapore Press Holdings to accelerate their e-commerce operations in four fast-growing emerging markets. "They will no longer be fighting a strong competitor (Schibsted)," Reuben Beelders, portfolio manager at Gryphon Asset Management, said. "One would anticipate that there will be reduced cash burn." Naspers is also in talks to sell its Swiss online retailer Ricardo in a deal potentially worth up to $413 million, according to people familiar with the sale, which would allow it to invest more in its target markets. Naspers increased its development spending by more than 40 percent to 4.4 billion rand as it increased its stakes in online retailers and invested in expanding a global payments business. Core headline earnings for the six months to end-September were 1,528 cents per share from 1,248 cents a year ago. Its shares are up 35 percent this year, giving it a market value of $57.5 billion. By comparison, Johannesburg's blue-chip index is up about 8 percent. (Editing by Jane Merriman)