JSE-listed Internet group Naspers says it delivered good results for the six months ended 30 September, with e-commerce business revenue growing 69% year-on-year.
Despite the effects of COVID-19, the group’s interim results statement reveals Naspers recovered well from a tough first quarter to accelerate revenue growth, improve profitability and cash-flow generation.
Group revenue grew 32% to $13 billion, with strong growth across its food delivery, online retail and education businesses, with group trading profit increasing by 42% to $2.6 billion.
Core headline earnings were $1.6 billion, driven by improved profitability from e-commerce units and the growing contribution from Chinese tech giant Tencent, according to the report.
The Takealot group (Takealot.com, Superbalist and Mr D Food) exceeded its pre-COVID-19 growth rate, generating $407 million gross merchandise value and growing 85% in local currency.
Takealot group revenue grew 41% to $238 million. Given this strong topline performance, Takealot delivered a trading loss improvement of 36% (27%), despite significant one-time pandemic-related investments.
“Our strong performance reflects the resilience and adaptability of the group and of our teams to effectively navigate challenging times,” says Bob van Dijk, group CEO of Naspers.
“We entered the pandemic with financial strength and good momentum and in the second quarter businesses recovered well from the initial impact of COVID-19 and are now fundamentally stronger than they were going into the pandemic.”
The pandemic has accelerated activity in the consumer Internet space, benefitting Naspers’s overall businesses, adds Van Dijk.
The group achieved 141% revenue growth of food delivery, 69% revenue growth in e-commerce and 54% revenue growth in edtech. iFood grew revenue by 234% year-on-year; PayU GPO reported revenue of 48% as more people used cashless payment methods; Udemy grew enrolments more than 400%; while BYJU’S saw 180% growth in student registrations.
“We have seen particularly strong growth in food delivery, online payments, e-tail and edtech and, throughout the period, we continued to invest for long-term growth. Looking ahead, we will continue to look after our people and support the communities we serve through uncertain times and we are focused on emerging well from the pandemic,” states Van Dijk.
European consumer Internet giant Prosus, which is 74% owned by Naspers, reported revenue increase of 32% to $12.7 billion. The Naspers subsidiary, which listed on the Euronext Amsterdam in September last year, recently announced its intention to acquire up to $5 billion of Naspers and Prosus shares.
The share purchase by Prosus constitutes a general repurchase of securities under the JSE listings requirements and will be implemented in accordance with, and subject to, the relevant authorities granted by Naspers shareholders, according to Naspers.
The company says it also made several investments in other international businesses for long-term growth, including leading a $20 million investment round for a 35% fully diluted stake in the merged businesses of letgo and OfferUp in the US; participated in a $150 million financing round for assets into Emerging Markets Property Group and OLX Brazil, acquiring real-estate vertical Grupo Zap.
While the current operating environment remains uncertain and the longer-term social and economic impact of COVID-19 is unclear, the group says it is on a solid financial footing and the fundamentals of the underlying businesses are strong and well-positioned to build on the accelerating shift to online, triggered by the pandemic.
In SA, Naspers has committed to invest a total of R4.6 billion, which includes the R1.4 billion for its investment fund, Naspers Foundry, its early-stage tech investment vehicle.
“Naspers is deeply committed to SA. We believe our country’s technology ecosystem has a vibrant future with many attributes supporting growth in this sector – access to technology talent, a relatively low cost of doing business, and a society that is digitising rapidly,” says Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa.
“We are seeing this play out in the growth of e-commerce, fintech and education technology platforms. Through Naspers Foundry, we are proud to invest in the next wave of home-grown tech businesses and we are excited by a rich pipeline of prospects. We’re on the road to economic recovery and inclusive growth.”
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