Tencent, e-commerce boost Naspers profit
NASPERS’S profits surged during the year ended March 2021 despite the economic fallout due to the Covid-19 pandemic.
The JSE-listed company said group revenue grew 32 percent to $29.6 billion (R424bn) and was driven by e-commerce revenues and Chinese tech giant, Tencent, which grew 28 percent year on year.
Group trading profit increased to $5.6bn.
The group said aggregated trading losses in its e-commerce segments reduced by 49 percent or $384million to $439m. Trading profit of the profitable e-commerce businesses grew by 49 percent to $450m. Tencent’s contribution to the group’s trading profit improved 29 percent.
Core headline earnings were $3.5bn, up 15 percent, driven by improved profitability from the e-commerce units and the growing contribution from Tencent.
Group chairperson Koos Bekker said the board was immensely pleased with the performance.
“They managed the pandemic, delivered powerful revenue growth, and lifted profitability. Foundations were laid for future growth,” Bekker said.
On a consolidated basis, total revenue increased by $1.9bn, or 48 percent, from $4bn in the year ended March 31, 2020, to $5.9bn in the year ended March 31, 2021, primarily due to food delivery and e-tail.
Naspers and Prosus chief executive, Bob van Dijk, said the businesses were fundamentally stronger than they were going into the pandemic and were very well positioned going forward.
“We will continue to invest and innovate to deliver the best experiences for our customers and to maximise the value we create for all of our stakeholders,” said Van Djik.
Operating loss increased from $720m to $1.2bn despite the significant, improved performance in revenue and profitability across most of our segments. The group said this was primarily due to an increase in the cash-settled share-based payment expense as a result of marked improvement in ecommerce and tech valuations.
“The strong performance of the businesses over the past year drove an increase in valuations of these businesses and therefore an increase in the cash-settled payment liability,” said Naspers.
The company said its equity-accounted results in equity-accounted companies increased by $3.2bn, or 81 percent, from S$3.9bn in the year ended March 31, 2020, to $7.1bn in the year ended March 31, 2021.
“The increase is driven primarily by Tencent and Swiggy, which reported improved profitability during the year. The equity-accounted results include investment disposal gains of $1.1bn, impairment losses of $968m and net fair value gains on financial instruments of $2.5bn,” Naspers said.
In August and December last year, Prosus raised $4.4bn in debt, comprising its longest-dated US dollar offering to date and its debut euro notes offering.
“Strong investor demand resulted in attractive pricing that reduced our average funding cost,” said Naspers. The group said it had no debt maturities due until 2025.
Naspers shares, however, closed 0.33 percent lower at R3 040, on the JSE yesterday.