Naspers and Prosus investments analysed
Naspers recently released its financial results for the year ended 31 March 2023, which revealed a big decline in profit and earnings per share.
Revenue from continuing operations increased from $6.3 billion to $6.8 billion, but that is about where the good news ended.
Naspers’ operating loss widened from $985 million to $1.4 billion, and profit for the year declined from $18.5 billion to $10.0 billion.
Naspers explained that the reason for the weaker operating profitability was due to its lower share of Tencent profits.
This is to be expected as Naspers sold 2% of its Tencent position during the 2022 financial year for total proceeds of $14.6 billion, and it sold 3% in the 2023 financial period for $10.7 billion.
Naspers’ shareholding in Tencent reduced from 29% to 26.16%, significantly affecting its profitability going forward as Tencent is by far its most profitable asset.
Naspers defended its open-ended share buyback scheme financed by selling Tencent shares, saying it created significant value for shareholders.
It added that it has increased confidence in achieving its H1 2025 profit ambition while continuing to deliver high growth.
It said it achieved strong revenue growth of 36% across four core segments of Food Delivery, Classifieds, Payments and Fintech, and Edtech.
“Overall, growth in consolidated eCommerce revenue was 15%, with strong growth in the core segments partially offset by a decline in the Group’s consolidated etail business,” it said.
Naspers CEO Bob van Dijk said they have made good progress across all of their strategic objectives over the last year.
“The eCommerce portfolio has performed well, and the open-ended buyback programme is driving improved NAV per share,” he said.
Performance on non-Tencent investments
The tables below give a breakdown of the financial results from some material investments made by Naspers and Prosus.
Overview (USD millions)
| Naspers | 2022 | 2023 | % change |
|---|---|---|---|
| Total Revenue | $7,940 | $8,404 | 6% |
| Total profit | $11,980 | $3,069 | -74% |
Revenue (USD millions)
| Naspers and Prosus investments | 2022 | 2023 | % change |
|---|---|---|---|
| Payments and fintech | |||
| Remitly | $109 | $147 | 35% |
| LazyPay | $28 | $83 | 196% |
| PayU | $686 | $903 | 32% |
| Food delivery | |||
| iFood | $991 | $1,374 | 39% |
| Delivery Hero | $1,755 | $2,429 | 38% |
| Swiggy | $212 | $297 | 40% |
| Classifieds | |||
| Olx Group | $723 | $722 | -0.14% |
| Edtech | |||
| Stackoverflow | $54 | $94 | 74% |
| Goodhabitz | $29 | $40 | 38% |
| Skillsoft | $119 | $222 | 87% |
| Etail | |||
| eMAG | $2,259 | $1,953 | -14% |
| Takealot | $827 | $808 | -2% |
| Social and internet | |||
| Tencent | $25,261 | $22,269 | -12% |
Profit (USD millions)
| Naspers and Prosus | 2022 | 2023 | % change |
|---|---|---|---|
| Payments and fintech | |||
| Remitly | -$9 | -$27 | -200% |
| LazyPay | -$1 | -$2 | -139% |
| PayU | -$46 | -$83 | -100% |
| Food delivery | |||
| iFood | – $206 | -$79 | 62% |
| Delivery Hero | – $343 | -$267 | 22% |
| Swiggy | -$100 | -$180 | -80% |
| Classifieds | |||
| Trading profit | $-37 | $-60 | 62% |
| Edtech | |||
| Stackoverflow | -$34 | – $84 | -147% |
| Goodhabitz | -$6 | -$16 | -167% |
| Skillsoft | $11 | $22 | 100% |
| Etail | |||
| Trading profit | -$35 | -$63 | -80% |
| Trading profit | -$7 | -$22 | -120% |
| Social and internet | |||
| Tencent | $9,863 | $6,994 | -29% |
This article was first published by Daily Investor and is republished with permission.
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