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Naspers sees revenue growth in core segments

Admire Moyo
By Admire Moyo
Johannesburg, 27 Jun 2023

JSE-listed consumer internet giant Naspers has reported growth of its e-commerce businesses.

The company today posted full-year financial results for 2023.

It also announced the proposed transaction to simplify the group ownership structure through the removal of the cross-holding between Naspers and Prosus, allowing open-ended buyback to continue.

It reported sustained revenue growth across core segments, as well as strong revenue growth of 36% across four core segments: food delivery, classifieds, payments and fintech, as well as edtech (excluding e-tail).

Overall, it notes, growth in consolidated e-commerce revenue was 15%, with strong growth in the core segments partially offset by a decline in the group’s consolidated e-tail business.

“During the last 12 months, we have made good progress across all of our strategic objectives,” comments Bob van Dijk, group CEO of Prosus and Naspers.

“Against a challenging backdrop, the e-commerce portfolio has performed well and the open-ended buyback programme is driving improved NAV [net asset value] per share. Today, we announced plans to simplify our ownership structure by removing the cross-holding between Naspers and Prosus, which allows the continuation of the share repurchase programme.

“There is much more to do, but we are on a good trajectory, we have strong momentum and remain confident in our commitment to achieve profitability in our e-commerce portfolio during the first half of 2025.”

According to the firm, the removal of the cross-holding simplifies the group and enables the continuation of the share repurchase programme at the Naspers level.

It notes the transaction will be effected by both Naspers and Prosus issuing shares to their existing shareholders.

Naspers and Prosus will waive their rights to participate in the respective capitalisation issue of new Prosus or Naspers shares.

The firms note this will result in Naspers’s direct ownership in Prosus aligning to its current economic ownership of 43%.

It will also result in the remaining 57% ownership of Prosus being held by the Prosus free float, consistent with the current economic ownership of Prosus.

Bob van Dijk, group CEO of Prosus and Naspers.
Bob van Dijk, group CEO of Prosus and Naspers.

Naspers will remain JSE-listed and a South African domiciled and tax resident company, while Prosus will remain a controlled foreign company of Naspers for South African tax purposes and retain its listing in the Netherlands.

“Naspers is on a firm footing to deliver continued value for shareholders. Our e-commerce businesses are scaling at pace, with sustained revenue growth well ahead of our peers,” says Basil Sgourdos, group CFO of Prosus and Naspers.

“During the year, we’ve streamlined our operations and reduced costs. These actions have taken hold, and we’ve reached a turning point in profitability, with iFood’s restaurant business, our Indian payments business and core classifieds all profitable. Our strengthened balance sheet, liquidity and improving free cash flow enable us to continue investing in high-growth opportunities and are an advantage in the current environment.”

Naspers says consolidated e-commerce revenue from its four core segments was strong at 36%, partly offset by a tougher trading environment in the e-tail business to deliver consolidated group revenue growth of 16% to $4.9 billion.

Trading losses in H2 decreased by 43% from H1, says the company, adding the established businesses are all profitable and these losses are a result of targeted investment in high-growth earlier stage initiatives, such as quick commerce and grocery delivery, credit and innovation in its edtech segment.

In the South African operations, Takealot Group grew gross merchandise value (GMV) by 13% and revenue by 12%, with strong performance at Mr D, where GMV grew 11% and revenue was up 17%.

Media24 delivered revenue of $207 million, with a trading profit of $5 million, despite investment in e-commerce infrastructure.

Phuthi Mahanyele-Dabengwa, South Africa CEO of Naspers, says: “Our local businesses continue to grow and innovate, reflecting the evolving consumer needs they fulfil and the immense potential of technology to shape South Africa's economic landscape.

“We recognise the important role of private-public collaboration in driving inclusive growth and we are committed to playing our part by enabling local businesses, supporting supply chains and employment through our South African platforms.”