JSE-listed internet giant Naspers has reported large-scale e-commerce gains during the first half (HY25) of its financial year.
In a statement, it says the first six months of the financial year have been successful for the group, as it innovates and executes faster, and accelerates the use of artificial intelligence (AI) across its portfolio.
The firm notes its operations delivered topline growth of 24%, with consolidated e-commerce revenue of $3.3 billion (R59.9 billion), and it increased e-commerce adjusted earnings before interest and taxes (aEBIT) by five times to $169 million (R3 billion).
Naspers recently marked the listing of Swiggy, valued at $11.3 billion (R205 billion), and sold $2 billion (R36 billion) of assets, including a portion of the Swiggy stake and Trip.com position.
It points out that the buyback programme has created $36 billion (R653 million) of value since launch, with 12% net asset value per share accretion, and is the largest globally of any tech company as a portion of market capitalisation.
It says it is now actively exploring the immense AI opportunity for its more than two billion customers, to accelerate growth and profitability, and is confident in the impact and value it will bring.
Fabricio Bloisi, group CEO, says: “Innovation and reinvention are in our DNA and essential to our success. We are embracing the massive opportunity we see in deploying AI to deliver exceptional products and services to our two billion customers.
“Our future growth will be driven by our AI-first mindset and disciplined investment into building world-class marketplaces, combined with greater collaboration across the ecosystem and our ability to build a winning culture. We are already showing signs of success, with peer-leading growth and rising profitability across our e-commerce portfolio.
“AI is transforming the way we work and how we serve our customers. We have data from billions of transactions across our portfolio that allow us to train AI models to personalise the customer experience and better predict their needs. This is a competitive advantage of our technology ecosystems. I am excited about the huge potential for Naspers – our journey to the next $100 billion (R1.8 trillion) of value is well under way.”
Next big thing
Ervin Tu, president and CIO of Prosus and Naspers, says in the past six months, the firm made substantial progress in delivering on its strategy.
“Our group is profitable after corporate costs, and our ongoing share buyback programme continues to create meaningful shareholder value. With Swiggy’s recent IPO, and by actively managing our portfolio through equity stake sales, we’ve highlighted significant pools of value, and we’re confident there’s even more ahead. With our strong and liquid balance sheet, we plan to grow and leverage our ecosystem, with an eye on the next wave of opportunity.
“We believe the combination of stronger-performing operating businesses, value-creating M&A [mergers and acquisitions] and our open-ended share-repurchase programme will continue to drive shareholder returns.”
The company adds that earnings from continuing operations increased to $2 billion from $1.5 billion in the prior period.
Core headline earnings, a measure of after-tax operating performance, was $1.5 billion, an increase of 74%.
Strong improvements in e-commerce and Tencent underpin this strong performance, says Naspers.
“With these results, the group has demonstrated its continued commitment to deliver profitable growth. Consolidated e-commerce profitability in 1H25, significantly exceeded that of the prior 12 months,” it states.
“We expect to continue this growth path by accelerating our pace of innovation and honing execution, investing with an AI-first mindset and leveraging the potential of the Prosus technology ecosystem.”
According to Naspers, Takealot Group continues to strengthen its market position in general merchandise, achieving an 11% increase in gross merchandise volume (GMV) and 7% growth in revenue.
It notes that e-tailer Takealot.com’s GMV grew 10% and revenue was up 7%, while Mr D’s revenue went up by 8% and groceries GMV surged by 109%.
In 1H25, iFood reported order growth of 29% and over 100 million orders in the month of August, underlining its continued growth momentum, says Naspers.
It explains that iFood’s core restaurant food delivery businesses led the performance with a substantial increase in aEBIT of $76 million, a growth of 85% year-on-year in local currency, excluding M&A.
Revenue from business growth extensions grew strongly, at 51%, driven by the groceries marketplace and credit business, while meaningfully reducing losses. Investing in iFood's ecosystem continues to extend the growth and profit potential of the business.
The company points out that classifieds revenue grew by 16% to $399 million, excluding M&A, led by OLX Europe (21%), which helped offset slower growth in OLX South Africa (9%) in local currency, excluding M&A.
The edtech businesses continue to work on improving financial performance amid the disruptive impact of the broad adoption of generative AI on its revenue pool, says Naspers.
The edtech businesses grew revenue well and significantly reduced losses, the company notes, adding that Stack Overflow's application programming interface offering, developed with the group's inhouse AI team, has primarily been responsible for segment revenue growth in the first half.
According to Naspers, the group's balance sheet remains strong, with $18.4 billion gross cash on hand (including short-term investments and proceeds from the sale of Trip.com interest) and net cash (including interest-bearing loans and capitalised lease liabilities) of $1.7 billion.
“We remain committed to managing our balance sheet within its investment-grade rating; as such, not all the cash on the balance sheet is available to the group. On 30 September 2024, we estimate that some $10 billion was available for new investment,” it states.
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