Naspers well-positioned for Covid-19 uncertainty ahead, says CEO on annual results


All of the segments of the Naspers group are making progress against their financial and strategic objectives, Basil Sgourdos, group chief financial officer, said about the annual results for the year to end March 2020.

Revenue grew 23% to US$22.1bn, and trading profit grew 17% to US$3.7bn. The Classifieds and Payments & Fintech segments continued to deliver growth, and both are profitable at their core, Sgourdos said during a media briefing following the release of the results on Monday.

The Food Delivery segment almost doubled revenues and is now one of the fastest-growing food delivery businesses globally, he said and for him this is reflecting the group's ability to build scale and strong positions in high-growth markets.

The group ended the period with a net cash position of US$4.8bn, which, according to Sgourdos, positions it well to continue investing in its businesses and pursuing growth opportunities. Naspers invested US$1.3bn in existing and new businesses during the financial year.

Over the period, revenues of Prosus, of which Naspers owns 72.5%, also grew 23% to US$21.5bn.

Core headline earnings of Naspers remained approximately stable at US$2.9bn. This reflects a 72.63% contribution from Prosus since its listing in September 2019, compared to the previous year's 100% contribution. Excluding this impact, core headline earnings grew 15% year-on-year.

The group is well-positioned to navigate the Covid-19 uncertainty ahead, group CEO Bob van Dijk said during the media briefing.

Truly transformational

"The past year was a truly transformational twelve months for the group, marked in September by the listing of our international internet assets as Prosus on Euronext Amsterdam. This is an exciting step forward, opening up fresh opportunities to build long-term sustainable value," said Van Dijk.

"Throughout the year, we continued to execute our long-term strategy of building leading consumer internet companies. This was reflected in a solid performance driven by revenue growth, notably the Food Delivery segment, and improved profitability in our ecommerce businesses, particularly the Classifieds segment, underpinned by continued growth of Tencent."

He acknowledged the impact of the Covid-19 pandemic on the daily lives of consumers as well as economies across the world.

"While the global societal and economic impacts of Covid-19 are likely to persist for some time, we are confident of our ability to weather the storm. We also expect that group businesses are likely to benefit from a further acceleration of the underlying trend towards online - brought about by the Covid-19 pandemic - to emerge well-placed for long-term growth," said Van Dijk.

In a statement group chair Koos Bekker described it as "a good year in the evolution of our group. As the world changes, so do we".

"The fundamentals of several of our businesses look sound. However, during the last quarter the world economy took a massive blow. Its consequences will include certain technologies accelerating, but also some social and political shifts that are hard to predict. We will continue to respond and adapt," said Bekker.
Phuthi Mahanyele-Dabengwa, CEO South Africa of Naspers, said in a statement that she is encouraged by the performance of Naspers Foundry, which is focused on helping South African tech entrepreneurs to scale and grow their businesses.

In the past year R30 million has been invested in online home and business cleaning company, SweepSouth. Also, after financial year-end, a further R100 million has been invested in subscription-based AI company Aerobotics.
Naspers Labs, a youth social impact pilot programme, has also made good progress. With four labs now established, more than 2 000 young people have completed their programme. Some 50% of graduates achieved employment placements so far.

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