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Naspers readies to weather COVID-19 storm with $22.1bn revenue

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

Naspers revenue increased 23% to $22.1 billion (FY19: $19 billion), while Prosus revenue grew 23% to $21.5 billion.

The JSE-listed company last night announced its full-year financial results for the 12 months ended 31 March, saying it is ready to weather the storm brought by the COVID-19 pandemic.

Naspers’s group trading profit grew 17% to $3.7 billion (FY19: $3.3 billion), with core headline earnings approximately stable at $2.9 billion.

According to Naspers, this reflects a 72.63% contribution from Prosus since its listing in September 2019, compared to the previous year’s 100% contribution. Excluding this impact, the company says core headline earnings grew 15% year-on-year.

Naspers owns 72.5% of Prosus.

The company also invested $1.3 billion in existing and new businesses and has a solid net cash position of $4.8 billion.

The group believes it is well-positioned to navigate the COVID-19 uncertainty ahead.

Segments making progress

Basil Sgourdos, group chief financial officer at Naspers, says: “The group has delivered a good set of annual results, with all of our segments making progress against their financial and strategic objectives.

“Revenue grew 23% to $22.1 billion, and trading profit grew 17% to $3.7 billion. The classifieds and payments and fintech segments continued to deliver growth, and both are profitable at their core.”

Sgourdos adds that the group’s food delivery segment almost doubled revenue and is now one of the fastest-growing food delivery businesses globally, reflecting Naspers’s ability to build scale and strong positions in high-growth markets.

“We ended the period with a net cash position of $4.8 billion, which positions us well to continue investing in our businesses and pursuing growth opportunities.”

Bob van Dijk, group chief executive officer, says:“The past year was a truly transformational 12 months for the group, marked in September by the listing of our international internet assets as Prosus on Euronext Amsterdam.

“This is an exciting step forward, opening up fresh opportunities to build long-term sustainable value. Throughout the year, we continued to execute our long-term strategy of building leading consumer Internet companies.”

Van Dijk says this was reflected in a solid performance driven by revenue growth, notably the food delivery segment, and improved profitability in the e-commerce businesses, particularly the classifieds segment, underpinned by continued growth of Tencent.

He adds that in recent months, COVID-19 has had a marked impact on the daily lives of citizens and economies across the world.

“From the start, we have prioritised the health and well-being of our people, their families, and the communities we serve. We are working hard to protect our businesses for the long-term. At both a group and a local company level, we have also provided support to governments and communities to play our part in the response to the pandemic,” Van Dijk notes.

“While the global societal and economic impacts of COVID-19 are likely to persist for some time, we are confident of our ability to weather the storm. We also expect that group businesses are likely to benefit from a further acceleration of the underlying trend toward online - brought about by the COVID-19 pandemic - to emerge well-placed for long-term growth.”

Koos Bekker, group chairman, says: “This was a good year in the evolution of our group. As the world changes, so do we. The fundamentals of several of our businesses look sound. However, during the last quarter, the world economy took a massive blow. Its consequences will include certain technologies accelerating, but also some social and political shifts that are hard to predict. We will continue to respond and adapt.”

Scaling tech entrepreneurs

Phuthi Mahanyele-Dabengwa, CEO South Africa, Naspers, says: “We are encouraged by the performance of Naspers Foundry, which is focused on helping South African tech entrepreneurs to scale and grow their businesses.

“In the past year, we invested R30 million in online home and business cleaning company, SweepSouth. Also, after financial year-end, we invested a further R100 million in subscription-based AI company Aerobotics, which provides intelligent tools for the agricultural industry to manage crops. We look forward to unlocking our promising pipeline of early-stage tech business investments.

“Naspers Labs, our youth social impact pilot programme, has also made good progress. With four labs now established, more than 2 000 young people have completed their programme. Some 50% of graduates achieved employment placements so far.

“I am also proud that we have been able to play a part in the country’s fight against COVID-19, through securing over R1 billion of much-needed personal protective equipment for South Africa’s front-line healthcare workers, in addition to a R500 million donation to the Solidarity Fund.”

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