Friday, June 14, 2024

Naspers expects higher headline profit thanks to e-commerce boost, Tencent | Business

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Naspers and Prosus expect higher annual headline earnings, thanks in part to the “accelerated profitability” of their e-commerce businesses.

Naspers owns a majority stake in its subsidiary and consumer internet business Prosus, which almost completely accounts for its earnings. Prosus houses its stake in the Chinese tech giant Tencent, as well as its investments in online classifieds, food delivery, payments and fintech and education technology. It owns stakes in companies such as iFood in Brazil, PayU and Swiggy in India.

The group had set a target of reaching consolidated profitability in its e-commerce businesses, which have reported large trading losses, in the first half of its 2025 financial year. But it later said this would happen sooner, by the end of March, 2024.

“We are on track to fulfil our promises of consolidated e-commerce profitability and cash flow generation,” Naspers said in a trading statement on Tuesday.

“These factors, combined with improved profitability from our investments, and the continuation of the share repurchase programme, supported meaningful growth in core headline earnings per share.”

Naspers holds around 25% of Tencent, which last month reported a 62% increase in net income thanks to surging ad income. The group has been trimming its stake in Tencent over recent months, using the proceeds to buy back its own shares.

Naspers expects that its core headline earnings per share (which excludes certain nonoperating items) from continuing operations will more than double (+107% to +113.4%) for the year to end-March. Apart from a profitability boost from its e-commerce businesses and Tencent, an increase in its net interest income also bolstered its earnings.

In the past year, Prosus has sold or closed down all of its OLX Autos operations, which are presented as discontinued operations.

Last month, Fabricio Bloisi, 47, was appointed as the new Naspers and Prosus CEO. He replaces Bob van Dijk, who resigned in September. Bloisi was previously the head of the group’s iFood business.

Naspers shares have gained almost 40% so far this year.

News24 is in the Naspers-owned Media24 stable.

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