NASPERS, a global internet and entertainment group and technology investor, said yesterday that it had invested $5.2 billion (R79.3bn) in new acquisitions to expand its ecosystems, mainly in food delivery to position the business for continued long-term growth, and flagged lower headline earnings a share for the half-year ended September 2021.
Prosus and parent Naspers told investors that earnings in the six months ended September would dim as the Chinese crackdown weighed heavily on Tencent. Naspers said headline earnings were expected to decrease in the current period by as much as 12 percent, mainly due to the increase in net finance costs “and the decrease in the contribution of fair value gains by our associates”.
Tencent in tandem with the Chinese gaming industry has been subjected to stringent regulations. Naspers said core headline earnings per share for the current period was expected to increase by between 29 and 54 cents per share or 8 and 15 percent driven by a larger contribution from Tencent, despite the sale of a 2 percent holding in that group.
It said this was partially offset by investments to grow its e-commerce ecosystems and platforms. Naspers, however, said earnings a share would surge by up to 510 percent bolstered by the sale of 2 percent of Tencent.
In a separate trading statement, Prosus said headline earnings were expected to marginally decrease in the current period, mainly due to the increase in net finance costs. Earnings were expected to increase by as much as 446 percent also as a result of the significant increase in earnings per share due to a gain of $12.3bn realised on the sale of a 2 percent interest in Tencent in April 2021. “This gain is excluded from headline earnings per share,” said Prosus.
Naspers and Prosus delivered a decent performance in October with a 7.5 percent month-on-month in aggregate as they followed Chinese tech stocks higher after a tough first nine months of the year, according to analysts.
In August Prosus said all the conditions of the share swop with parent Naspers to set up a cross-holding had been satisfied, including the minimum acceptance condition. Prosus holds Naspers’s global internet business, including a nearly one-third stake in Tencent.
It also said yesterday it was among the top performing Europeanlisted companies reviewed under S&P’s Corporate Sustainability Assessment methodology. The company achieved 100 points in several categories including Board Diversity Policy; Strategy for Emerging Markets; Brand Strategy and Sustainability Strategy; Risk Culture; IT/ Cybersecurity Measures; Environmental Reporting Assurance; Climate Risk Management; and Climate-related Management Incentives.
Prosus said in June that the valuation of its e-commerce portfolio had doubled to $39bn during the year ended March 2021, compared with a year earlier, as the group recorded bumper operating profit and revenues soared.
Naspers shares closed 4.72 percent higher at R2 775 on the JSE yesterday, while Prosus shares gained 4.93 percent to close at R1 376.70.
BUSINESS REPORT ONLINE