Naspers finances ‘strong enough to face virus’

Naspers, Africa’s biggest company by value, says it is in a strong shape to withstand the economic shock from the Covid-19 outbreak that has brought whole industries to a grinding halt.

Naspers, whose biggest money spinner is an indirect stake in China’s internet giant Tencent, is sitting on a more than $4bn (R73.1bn) cash pile, which could be used to keep its multitude of businesses from online classifieds to food delivery platforms intact and allow it to scan the globe for new opportunities, the company said in a statement on Wednesday.

The company, which owns the News24 media group and food delivery service Mr D Food among its SA assets, could also draw on a $2.5bn revolving credit facility and had no debt maturities until the end of 2025, it said.

The coronavirus, which has infected more than a million people worldwide, has wreaked havoc in financial markets, triggered a scramble for cash from under-capitalised companies and a fight for survival among small businesses, hotels, movie theatres and airlines.

“The group believes that it faces this challenging period from a position of relative financial strength and with sufficient liquidity to both navigate the changing environment and seek out new opportunities.”

While it is too early to estimate Covid-19’s effect on Naspers’s operations and financial information, the group said the size of the impact on operations would vary across sector and geography.

Naspers, led by CEO Bob van Dijk, owns internet-based businesses that provide food delivery, e-commerce, fintech, and games, among other things. Its investment in Chinese internet giant Tencent “continues to grow off a very large base and in a market, China, which appears to be emerging relatively well from the impact of Covid-19”.

In the classifieds business, Naspers said it had experienced a decline in traffic on the platform, and in the short term expected a negative impact on revenue and profitability in that unit.

In payments and fintech, the European businesses “appear to be resilient”, though it’s too early to estimate the impact of the recent lockdown in India, which

represents more than 50% of this business.

In food delivery, while the group is experiencing an increased demand across its portfolio, it has not always been able to meet that demand due to supply issues as restaurants close.

The food delivery businesses also include Swiggy in India and iFood in Brazil.

In its SA online retail business, Takealot has ceased trading locally in compliance with the lockdown, but reopened for the sale and delivery of essential goods.

Last week, Naspers donated R1.5bn in emergency aid to the government’s response to the Covid-19 crisis.