Prosus and Naspers ride on Tencent stake


Prosus and Naspers ride on Tencent stake

Published Date: 2020-11-17 | Source: Stephen Gunnion | Author: Stephen Gunnion

Prosus and Naspers ride on Tencent stake

The companies have benefitted from growth in e-commerce and their investment in Chinese internet giant Tencent.

Naspers and subsidiary Prosus have prepared shareholders for a big increase in first-half earnings due to growth in their e-commerce businesses and a strong performance from associate Tencent. However, Naspers's results will be skewed by last year's unbundling and listing of Prosus on Euronext Amsterdam.

In trading statement, Prosus said although it faced challenges due to Covid-19, particularly in countries where government lockdown regulations were wide ranging and long lasting, all impacted businesses recovered sharply as contingency plans produced results once restrictions were eased.

Prosus said earnings per share (EPS) for the six month ended September would be 17% to 23% higher than the 154 US cents reported last year while core headline EPS would be up by 24% to 31%. It said core headline EPS was the most appropriate indicator of its operating performance as it adjusted for non-operational items.

Separately, Naspers said its core headline EPS would be 1.3% to 7.4% lower than the 380c reported last year. While Prosus represents the majority of its operations, it now only recognises a 72.66% contribution from the global consumer internet business after creating a free-float of the shares so other investors could participate following its listing in Europe

Although forward visibility remained difficult given the challenges some countries faced in dealing with the longer-term effects of Covid-19, Prosus said it was confident it would benefit from the acceleration of the trends that had propelled growth of the consumer internet.

Prosus fell 2.7% to R1,610.91 yesterday while Naspers declined by 1.25 to R3,141.52.The trading statements were released after the close of trade.

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