The Prosus internet group. Picture: Ian Landsberg
Naspers, the global internet and its Netherland subsidiary Prosus’s share prices surged after they said a complex cross-holding structure between them would be removed, and in spite of Naspers reporting a sharp loss for the year to March 31.
Naspers, which owns Takealot.com and Media24 in South Africa, reported a 48% decline in core headline earnings to $1.1 billion (R20.3bn), a decrease of 48% or $1bn primarily due to lower contributions from the group’s associates ($1.3bn), of which $1.1bn related to Tencent.
Naspers’ biggest investment, the China-based internet giant Tencent was hit by Covid-19 lockdowns in China and geopolitical and macroeconomic uncertainty, and losses by its e-commerce businesses.
Naspers’ share price surged 9.27% to R3276.16 and the Prosus share price had gained 8.49% to R1394.69 by early Tuesday afternoon on the JSE.
Naspers group trading profit declined by 32% to $3.3bn (R61bn), reflecting Tencent’s lower contribution and an increase in the group’s share of losses from e-commerce associates.
Prosus’s operating loss widened to $1.34bn (R20.96bn) from $950m (17.56bn). Prosus holds Naspers’ former international investments with stakes in Tencent, Trip.com, Delivery Hero and financial technology company PayU, among a host of other companies.
Naspers’s revenue increased to $6.8bn (R125.6bn) from $6.3bn. Operating losses increased to $1.4bn (R25.9bn) from $985m (R18.1bn). Core headline earnings per share fell 27.9% to 507 US cents from 703 US cents
“E-commerce consolidated trading losses from continuing operations of $639m reflected incremental investment in the group’s e-commerce growth extensions as we continued to invest in high-conviction growth areas,” Naspers directors said.
To counter the deterioration, costs were cut, including a 30% reduction in workforce costs.”
The directors added that the profitability of the e-commerce businesses had improved in the second half.
The group has previously said it would bring its e-commerce businesses to profitability in the first half of the 2025 financial year.
BUSINESS REPORT