Naspers reported a fivefold improvement in earnings before interest and tax (EBIT) for the six months to September 30 after their multinational internet companies became profitable.
Amsterdam-based e-commerce subsidiary, Prosus, plans more listings after last month’s initial public offering (IPO) of Swiggy in India. More than $2 billion (R36.4bn) of assets were sold during the period, including exiting its Trip.com position in China.
The results indicate a significant improvement in operations - a key factor behind the appointment of the Group CEO Fabio Bloisi on July 1, 2024, was that the e-commerce investments needed to become profitable because, at the time, Naspers and Prosus’ share price valuations were based purely on the stake in China software and gaming group Tencent.
Prosus hopes to list PayU next year, and other Indian investments, including e-commerce startup Meesho and online jewellery retailer Bluestone, in the next 18 months, Reuters reported.
The results generated much commentary on the “X” social media platform, with, for instance, WeeTracker (@weetracker) commenting: “Naspers has sounded the alarm on escalating competitive pressures as Amazon and Temu aggressively challenge Takealot Group’s once-dominant position in South Africa’s e-commerce market.”
Brand Icon Image (@BrandIconImage) said: “SA’s Naspers to launch more IPOs in next 18 months following Swiggy success.”
Kevin Xu (@kevinsxu) said: “The first generation of Chinese internet successes catapulted quite a few little-known investment outfits to brand name status; Tencent made Hillhouse, Coatue, Naspers/Prosus relevant, and JD powered Tiger Global…”
Naspers’ topline growth was a robust 24%, with consolidated e-commerce revenue at $3.3bn. E-commerce adjusted EBIT swung to a profit of $181 million, from a loss of $36m. Equity accounted profit increased by $1.3bn to $2.5bn, driven by Tencent’s increased profitability as well as higher contributions of associates of $404m, offset by impairment loss increases of $146m - the group currently holds 24.3% of Tencent.
Core headline earnings for continuing operations increased to $1.5bn from $866m, while Prosus’ core headline earnings increased to $3.5bn from $2bn. Consolidated e-commerce revenue at Prosus grew by 26% driven by continued strong revenue growth in payments and fintech, e-tail, and food delivery.
Prosus forecast $400m profit and revenue of $6.2bn for the financial year to the end of March 2025.
Trimming the group’s Tencent position by 0.5% to fund the Prosus share repurchase programme resulted in a gain of $2.4bn.
“We recently celebrated the listing of Swiggy, valued at $11.3bn. Our buyback has created $36bn of value since launch, with 12% NAV (net asset value) per share accretion, and is the largest globally of any tech company as a portion of market capitalisation,” Bloisi said yesterday in a statement.
He said the AI opportunity was being actively explored for the group’s more than 2 billion customers to accelerate growth and profitability.
In the e-commerce portfolio, in food delivery, iFood achieved a record profit, with adjusted EBIT of $98m, up 387%. iFood’s Gross Merchandise Value (GMV) was up 32%, with orders up 29% and revenue increasing 30%. iFood’s core restaurant business grew adjusted EBIT by 85% to $148 m.
Delivery Hero grew GMV by 6%, with revenue up 19% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) at €241m, well up from €9m in the first half of 2023.
In the Classifieds business, OLX Group saw a strong performance, with continued growth and expanding margins.
Classifieds consolidated revenue grew 20%, with standout performances by motors and real estate verticals. Motors and real estate verticals grew revenue by 26% and 27% respectively, reflecting new pricing strategies, improved monetisation, and higher adoption of value-added services. Adjusted EBIT increased 42% to $133m.
BUSINESS REPORT