COVID-19 eats into Naspers’s earnings
JSE-listed Internet group Naspers says its COVID-19 donations will have a negative impact on its earnings.
The company yesterday issued a trading update ahead of its financial results for the 12 months ended 31 March, due on the evening of Monday, 29 June.
“We ended the financial year facing into the global COVID-19 pandemic, with many of our markets entering lockdown in the last two weeks of March 2020,” says the company in a statement.
“We continue to respond quickly to the evolving COVID-19 situation to ensure we safeguard our people, maintain our ability to serve our customers and protect our businesses for the long-term. While we believe each of our segments will continue to benefit from secular growth trends, the global pandemic has negatively impacted some operations and we need to caution against the potential impacts of COVID-19 on the 31 March 2021 financial year.”
Naspers made $167 million (R2.8 billion) in donations in response to COVID-19 in March. This comprised $84 million (R1.5 billion) in emergency aid provided to the South African government’s response to COVID-19.
The group also expensed its proportionate share of COVID-19 donations made by Tencent up to end March of $83 million.
However, Naspers says during the year ended 31 March, all key e-commerce segments made good progress against financial and strategic objectives.
It notes that classifieds again grew considerably faster than many of its peers and increased profits. Payments and fintech segments have now reached profitability at their core and continue to grow profits, while also investing to drive future growth, says the company.
“Food delivery was a key investment area during the year as we seek to grow the market and our position in it by investing in technology and building out our first-party delivery capabilities, city and restaurant reach,” it notes.
“Initial results are highly encouraging as, to date, this investment has driven significant order and revenue growth in our food delivery operations. The progress of our core e-commerce segments, which are growing fast and scaling well, gives us confidence in our ability to continue identifying opportunities to create significant value into the future.”
According to Naspers, Tencent delivered a solid financial performance, and further details will be provided in the summarised consolidated financial results.
As a result of the listing of Prosus, the group’s earnings, headline earnings and core headline earnings for the year ended 31 March are expected to reduce as compared to the year-ago period, reflecting the fact that the group will only recognise a 72.63% contribution from Prosus for the year as compared to a 100% contribution in the prior year period, the company says.