Naspers profit plummets by R147 billion
Naspers has released its annual financial results, reporting an over 46% decrease in profit from $18.5 billion (R318 billion) to $9.95 billion (R171 billion).
Sister company Prosus posted a similar performance, with its annual profit decreasing from $18.6 billion (R319 billion) to $10.0 billion (R172 billion).
The poor performance comes after the companies warned two weeks ago that they expect their headline earnings per share to drop by between 74% to 82%.
Naspers and Prosus are two of the biggest companies on the Johannesburg Stock Exchange.
Naspers is the parent company of Takealot Group and Media24 and holds a stake in Prosus.
Prosus is the vehicle for Naspers’ former international investments and has holdings in Tencent, Trip.com, and Delivery Hero, among a host of other companies.
It also holds a stake in Naspers, and owns emerging-markets financial technology company PayU, which it is reportedly looking to offload.
Naspers recorded an increase in revenue from continuing operations of $6.3 billion (R108 billion) to $6.8 billion (R116 billion).
However, its operating losses also increased from $985 million (R16.9 billion) to $1.4 billion (R23.7 billion).
We used the R17.15 per dollar exchange rate Naspers listed in its financial report for the foreign exchange conversions.
Naspers and Prosus blamed their after-tax performance on lower contributions from associates, particularly Tencent, which it said was impacted by Covid–19 lockdowns and new regulations in China.
The companies said their operating environment during the fiscal year ended 31 March 2023 was characterised by significant geopolitical and macroeconomic uncertainty.
“E-commerce consolidated trading losses from continuing operations of US$639m reflected incremental investment in the group’s
e-commerce growth extensions as we continued to invest in high-conviction growth areas,” they stated.
“Market conditions deteriorated significantly for this business in the second half of the year and the group is completing an exit of OLX Autos.”
To counter the deterioration, the companies said they aggressively cut costs, including a 30% reduction in corporate-level workforce costs.
“We are committed to achieving consolidated e-commerce profitability during the first half of [the 2024/25 financial year],” they said.
“Our efforts to drive profits with peer-leading growth will deliver long-term value to the group’s shareholders.”
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