Naspers fast tracks profitability goals

Naspers says its performance outside of China’s Tencent has improved so much that it expects to reach profitability earlier than expected.

The group’s value has long been tied to its almost one-quarter stake in the Chinese internet giant. As such, Naspers is working to prove the value of its other businesses in food delivery, classifieds, fintech and education. 

Where the group expected these businesses would be profitable in the first half of its 2025 year, it now expects this to happen in the second half of the current year. This translates to the goal being reached by March 2024. 

“We are making substantial progress against our commitment to drive profitable growth. Through active management of our portfolio, we have delivered improved results as our e-commerce portfolio is now close to breakeven and growing at scale,” the group's interim CEO, Ervin Tu, said on Tuesday.

The group reported consolidated e-commerce revenue of $2.9bn for the six months September 2023. This was driven by “sustained topline growth” of 15%, more than double the rate of peers, the group said. 

Consolidated e-commerce trading loss stood at of only $38m, representing a 9% margin improvement year-on-year.

At a group level, trading losses from continuing operations, fell by 65% to $124m. This excludes OLX Autos, which the group is exiting. 

The group's South American food delivery business, iFood is now “profitable overall, not just in its core.”

Core headline earnings, the group's preferred profit metric which strips out one off financial events, grew to 454 US cents from 214c previously. 

This comes a day after Naspers said it will pay out just more than R1.6bn in dividends for its past financial year, after the unwinding of a complex cross-holding structure between the group and international unit Prosus.

gavazam@businesslive.co.za