Naspers and Prosus ride the online trend


Naspers and Prosus ride the online trend

Published Date: 2020-06-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Naspers and Prosus ride the online trend

Naspers, which owns global consumer internet group Prosus, says it is well positioned as Covid-19 accelerates the shift online.

Naspers says some of its businesses are likely benefit as Covid-19 accelerates the trend towards online shopping and services. Even before the pandemic, its burgeoning Food Delivery operations were cashing in on the online shift, with revenues almost doubling last year.

The group's results for the year to end-March are the first since it listed its global consumer internet operations on Euronext Amsterdam last September. It retained 73.84% of Prosus at listing and subsequently reduced this to 72.49%, which it said it planned to retain.

Prosus's biggest investment remains its 31% stake in Chinese internet and gaming giant Tencent, which underpinned its growth for the year with a 21% rise in revenue. However, the group said all segments of its business made progress. Classifieds and Payments & Fintech continued to deliver growth, and both were profitable at their core. However, despite the strong rise in revenue for Food Delivery, its trading losses rose significantly due to continued investments in growth by the respective underlying businesses.

Group revenue grew 23% to $22.1 billion and trading profit rose 17% to $3.7 billion. Core headline earnings declined 4.5% to $2.86 billion, reflecting a 72.6% contribution from Prosus since its listing compared to the previous year's 100% contribution. Excluding the impact, it said core headline earnings grew 15% year on year. It ended the period with a net cash position of $4.8 billion, which it said positioned it well to continue investing in its businesses and pursuing growth opportunities.

Naspers said it entered the Covid-19 crisis from a position of relative financial strength and with sufficient liquidity to navigate the changing environment. It planned to remain disciplined in its investment approach, deploying capital on growth assets operating in growth industries with an expected return in excess of its cost of capital.

Separately, Prosus reported a 23% increase in revenue to $21.5 billion, with trading profit rising 16% to $3.8 billion and core headline earnings up 13% at $3.4 billion.

Naspers rose 0.3% to R,113.48 yesterday while Prosus gained 0.5% to R1,558.69. The results were released after the close of trade.

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