Naspers and Prosus have the resources to endure Covid-19


Naspers and Prosus have the resources to endure Covid-19

Published Date: 2020-04-09 | Source: Stephen Gunnion | Author: Stephen Gunnion

Naspers and Prosus have the resources to endure Covid-19

The global consumer internet groups have cash on hand and measures are in place to protect employees and support key partners affected by the virus.

Naspers and subsidiary Prosus says they've been proactive in implementing policies to protect their employees and support key partners that have been affected by the Covid-19 pandemic. And the companies say they're in a strong financial position to get through the current uncertainty.

Prosus was unbundled and listed last September, with Naspers retaining a majority stake in the global consumer internet group. Although it was too soon to estimate the potential impact on their operations and financial performance, Naspers finished its financial year at the end of March with more than $4 billion in net cash and a $2.5 billion undrawn revolving credit facility. Prosus raised $1.25 billion through a bond offering in January, which will be used to redeem its $1 billion notes due in July. It has no debt maturities until 2025.

The group said all its businesses had continuity plans in place and it was actively assessing potential impacts and supporting businesses as they took appropriate, market-specific action.

Its largest investment, Tencent, continued to grow off a very large base, with China appearing to be emerging relatively well from the impact of Covid-19. While its European payment and fintech businesses seemed to be resilient, online classifieds had suffered a decline in traffic to its various marketplaces. Steps had been taken to assist customers and partners.

In food delivery, while the group was experiencing increased demand across its portfolio, it wasn't always able to meet it due to supply issues as restaurants closed. In SA, although food delivery was allowed as an essential service, restaurants and their kitchens were barred from operating, limiting the items that Mr D Food can deliver. It said Mr D Food continued to operate in a limited capacity through the delivery of essential goods.

The group's local online retail operation, Takealot, has been impacted by a restriction on certain categories of goods it can sell. Although it initially ceased trading in compliance with the full lockdown, it reopened on 30 March for the sale and delivery of essential goods.

Naspers's local media operations continued as an essential service, with viewership increasing since the onset of Covid-19. It expected to continue publishing a number of its print newspapers and magazines for as long as it was practical to do so, although the distribution footprint had been reduced to comply with the lockdown.

Apart from R1.5 billion in emergency aid contributed to the SA government's response to Covid-19, Naspers and Prosus said they had also launched a number of community initiatives, at a group and subsidiary level.

Naspers fell 0.9% to R2,591.66 yesterday while Prosus shed 1.9% to R1,238. The announcement was made after the close of trade.

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