Prosus yesterday said that it would commence with the acquisition of its own shares and that of its parent company Naspers today up to the value of $5 billion (R77.03 bn) as announced last month. Photo: File
Prosus yesterday said that it would commence with the acquisition of its own shares and that of its parent company Naspers today up to the value of $5 billion (R77.03 bn) as announced last month. Photo: File

Prosus to acquire own and Naspers shares up to the value of $5bn

By Sandile Mchunu Time of article published Nov 24, 2020

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DURBAN - PROSUS yesterday said that it would commence with the acquisition of its own shares and that of its parent company Naspers today up to the value of $5 billion (R77.03 bn) as announced last month.

Prosus said it would implement the share buyback by the acquisition of up to $1.4bn of its own shares and $3.6bn of Naspers’.

The move came on the back of a 32 percent rise in revenue for the six months to end September for the two companies.

Prosus said this revenue shot to $12.7bn, with strong growth reported across food delivery, up by 141 percent, while retail revenue increased by 70 percent and education revenue inched up by 54 percent.

Its trading profit surged 43 percent to $2.7bn and core headline earnings increased 29 percent to $2.2bn, driven by improved profitability from its ecommerce units and the growing contribution from Tencent.

Prosus free cash flow jumped from $14 million to $370m, driven by lower food losses, strong working-capital management and a $81m increase in Tencent dividend.

Naspers revenue increased to $13bn, supported by 141 percent on food delivery, 69 percent increase in e-tail and 54 percent in ed-tech.

Its trading profit increased 42 percent to $2.6bn and core headline earnings were marginally up to $1.6bn, driven by improved profitability from its ecommerce units and the growing contribution from Tencent.

The group said the year-on-year 5 percent decrease reflects that it owns 72.66 percent of Prosus compared to 100 percent a year earlier.

Naspers free cash flow surged to $292m compared to $19m last year, also driven by the same factors as Prosus.

Chief executive Bob van Dijk said the performance reflected resilience and adaptability to navigate through challenging times.

“We entered the pandemic with financial strength and good momentum, and in the second half of the period, our businesses recovered well from the initial impact of Covid-19 and we are now fundamentally stronger than they were going into the pandemic,” Van Dijk said.

Prosus ended the period with a strong and liquid balance sheet, with a net cash position of $4.3bn.

The owner of global Internet assets specialising in food delivery, payments and online education lost out on two high profile takeover battles in the last year and it said it continues to look for growth opportunities.

“We continue to explore growth opportunities to advance our strategy, expand our ecosystem and position the business for sustainable growth,” Prosus said.

Prosus rose 2.60 percent on the JSE yesterday to R1 683, while Naspers closed 2.40 percent higher at R3 196.20.

BUSINESS REPORT

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