Internet giant Naspers delivered a strong performance in the six months ending 30 September, growing e-commerce revenue 52%.
In a statement, the company says the group stepped up investment to further accelerate growth across its increasingly valuable internet businesses.
E-commerce revenue growth accelerated, up 52% to $4.6 billion, says the firm, noting it has invested $5.2 billion since 1 April 2021 to further accelerate growth, with the e-commerce portfolio valuation rising to $50 billion.
Naspers’s trading profit grew 9% to $2.9 billion, with core headline earnings per share growing 11% to 416 US cents.
Bob van Dijk, group CEO of Naspers and Prosus, comments: “In the first half of the year, our internet businesses delivered solid growth, compounding a strong performance for the same period last year.
“Our progress is reflected in the increasing value attributed to our e-commerce portfolio and, to capture the significant opportunity ahead, we stepped up investment in our core segments of food delivery, edtech, payments and fintech, and classifieds. Naspers companies now serve more than two billion customers and we continue to build innovative products that make a difference in people’s lives.”
Boosting cash generation
Says Basil Sgourdos, group CFO of Naspers and Prosus: “We have made good progress on several fronts in the first six months of the year. Our e-commerce portfolio continues to grow at pace and we are focused on investing behind that growth to build momentum and capture the significant opportunity we see ahead.
“To this effect, and as an indication of how we are scaling our businesses, we delivered 44% growth in our established and consolidated profitable businesses, resulting in increased cash generation to the centre. At the same time as investing for growth, we continued to crystalize returns for shareholders during the period through a $5 billion share-repurchase programme. We also made an important capital structure change, completing the voluntary share exchange offer. Prosus and Naspers are now better sized on their respective stock exchanges. We have set a solid foundation for the group’s future growth.”
According to Naspers, e-commerce revenue grew 52% to $4.6 billion versus a strong performance for the same period last year, and outpacing revenue growth at Tencent.
It notes this performance was led by 100% growth in classifieds, 86% growth in food delivery, 51% growth in edtech, and 44% growth in payments and fintech.
The company points out that analyst consensus estimates of the value of the e-commerce portfolio (excluding Tencent and VK/mail.ru) are increasing, now approaching $50 billion.
This substantial value appreciation translates to a 22% internal rate of return (IRR) on the $22 billion invested over the last decade.
OLX delivered a strong performance versus the same period last year, says the company, adding that in well-developed markets, such as Russia, Poland and Brazil, the group accelerated the development of new consumer propositions, such as pay-and-ship services, increasing trust and safety across its platforms and scaling its autos transactions business.
“Performance in our global food delivery business remained strong. iFood, Swiggy and Delivery Hero are operating at significant scale and innovating beyond their core food delivery businesses into complementary adjacencies such as convenience and grocery delivery. Our food delivery businesses now cover more than 60 countries,” says the firm.
It points out that PayU delivered solid results, serving the continuing global shift to digital payments, with total payment volume growing 48% to $35.3 billion. PayU’s revenue grew 44% to $359 million, driven largely by a strong payments performance in the India business and resumed activity in credit.
“Our global payments operations, focused mainly in Europe and Latin America, also delivered good growth. TPV grew 29% and revenue was up 27% to $160 million. On 31 August 2021, we announced the acquisition of BillDesk in India for $4.7 billion which, subject to regulatory approval, would make the combined business a global top 10 online payments provider.
“Our payments and fintech investments continue to perform well. Notably, in September, Remitly listed on the Nasdaq Stock Exchange with a market capitalisation of approximately $8 billion. PayU’s 23% stake and $209 million investment over the past four years represents an IRR of 86.9% as at 30 September.
“We continued to rapidly expand the scale and reach of our global edtech business – combined, the portfolio currently serves more than 500 million users,” the company says.
The edtech segment grew strongly during the period, delivering revenue growth of 51%, to $120 million in the first half of the financial year. Trading losses were $48 million versus $13 million for the same period last year, reflecting continued investment.
Takealot nears breakeven
The Takealot Group, comprising Takealot.com, Mr D Food and Superbalist, continued to benefit from the shift to online, says Naspers.
The group grew revenue by 36%, while trading losses decreased to near breakeven, with a trading loss of $2 million. Mr D Food delivered strong results, with order volumes growing 88% as consumer spending shifted from restaurant dining to online delivery.
Superbalist grew revenue and trading margins despite increasing competition from brick-and-mortar fashion retailers.
Naspers Foundry continues to enable SA’s nascent and vibrant tech ecosystem, says the firm. The Foundry team backs and then supports early stage tech companies in SA to help them achieve their full potential. In the first half of this financial year, the team has invested nearly R200 million in three promising technology companies: mobility technology company WhereIsMyTransport (R42 million), digital insurance advice platform Ctrl (R34 million), and SA’s first fully digital insurance platform, Naked (R120 million).
These three investments take the Naspers Foundry portfolio to seven companies, with a combined investment of around R400 million since its launch in 2019.
With a healthy pipeline of potential investments, in the coming months, Naspers Foundry expects to announce more backing for SA’s tech companies of the future.
Says Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa: “We see tremendous opportunity for technology to drive inclusive economic growth and increased economic participation in SA. Through Naspers Foundry, Naspers Labs and the Naspers Bursary programme, we are increasing the economic participation of the country’s historically-disadvantaged communities and boosting SA’s nascent but vibrant tech ecosystem.
“Our investments are supporting SA’s digital transformation, fostering innovation, and equipping the next generation with the skills they require to help the country become a world-class investment destination.”
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