The Naspers Group [JSE: NPN] expects to see its core headline earnings to take a slight dip due to reduced earnings contributions from its subsidiary Prosus.
The e-commerce company on Monday issued a trading update after markets closed. Naspers and Prosus both plan to release their financial results for the half-year ended 30 September 2020 next Monday.
"For the period ended 30 September 2020, the group's earnings, headline earnings and core headline earnings growth is impacted largely by reduced earnings contributions in the current year from the Prosus Group, post its listing in September 2019 and the creation of the free-float resulting in a significant non-controlling interest of the group," the statement read.
As at 30 September 2019, the group realised 100% of Prosus' earnings, for the current period this will be 72.66%.
Its core headline earnings - which it considers an "appropriate indicator" of the group's performance - is expected to decline by between -7.4 and -1.3% or between 28 cents and five cents per share. This was mainly driven by the creation of Prosus free float in September 2019, it said.
"Adjusted for this, core headline earnings growth per share is expected to increase in the same range as Prosus, between 23.8 and 30.5%," the update read.
Last year, the group core earnings per share was 380 US cents.
"Like most companies, in the period we faced some challenges due to Covid-19, particularly in countries where government lockdown regulations were wide ranging and long lasting.
"However, we have seen a sharp recovery in all of our impacted businesses as our contingency plans produced results once lockdown regulations began easing," the statement read.
The share price ended the day 1.15% weaker at R3 141.52.
* Fin24 is part of Media24, a subsidiary of Naspers.