Naspers Logo. The removal of the cross-holding agreement between Prosus and Naspers was completed in September 2023, to simplify the group structure. File picture: Simphiwe Mbokazi/Independent Newspapers
Naspers said its 15% revenue growth was more than double that of its peers and core headline earnings more than doubled, increasing 112%, due to improved e-commerce and profitability at its China investment in Tencent.
The group, which has Europe-based internet group Prosus as a subsidiary, said on Wednesday’s results for the six months to September 30 that the fundamentals of its e-commerce businesses were improving.
The meaningful improvement in profitability had enabled the group to bring forward its Prosus e-commerce profitability target by six months, to the second half of the 2024 financial year.
Naspers’s consolidated e-commerce trading loss came to only $38 million (R730), representing a 9% margin improvement year-on-year. Consolidated e-commerce revenue came to $2.9 billion.
Cash flow increased eight times year-on-year to $677m. The balance sheet was strong with cash of $15.1bn.
The removal of the cross-holding agreement between Prosus and Naspers was completed in September 2023, to simplify the group structure.
“We are making substantial progress against our commitment to drive profitable growth. Through active management of our portfolio, we have delivered improved results as our e-commerce portfolio is now close to breakeven and growing at scale.
“We’ve simplified our group structure, and the open-ended buyback programme is driving daily NAV per share growth – magnifying returns over the long term, interim group CEO Erwin Tu said in a statement.
Naspers and Prosus group chief financial officer Basil Sgourdos said: “I expect this trajectory to continue at pace. Our Classifieds and Food Delivery segments are both profitable, and PayU is making strong progress towards profitability.
“Core headline earnings have doubled and the impact of the strong improvements in e-commerce and Tencent are also evident in our free cash flow, which has increased six times.”
The share buyback would compound value over time and the removal of the cross-holding agreement had simplified the group’s structure, said Tu.
”With deep institutional knowledge across a number of technology domains, including AI, we are well positioned to support exceptional technology companies around the world. We remain ambitious in our plans and disciplined in our approach to drive real returns for all of our stakeholders,” said Tu.
Naspers’s share price fell 1.02% to R3404.85 by midday Monday on the JSE, while Prosus’ share price was down 1.33% to R609.79 at the same time.
BUSINESS REPORT