Naspers expects to lift interim headline earnings by between 103.2% and 109.6%, boosted by consolidated profitability in its Chinese e-commerce unit, Tencent.
Owned by Naspers through its global investment group Prosus, Tencent has raked in the profits from video gaming while it is investing in artificial intelligence and bumping up fintech payments.
“The group has demonstrated its continued commitment to deliver profitable growth, with consolidated e-commerce profitability in the first half of FY25, significantly exceeding that of the prior twelve months,” said Naspers yesterday.
Core headline earnings per share and headline earnings per share for continuing operations for the period are thus expected to increase by between 87.2% and 93.8% as well as from 103.2% to 109.6% respectively.
Naspers said it expected to “continue this growth path by accelerating pace of execution and innovation, investing with an AI-first mindset and leveraging the potential of the group’s technology” ecosystem.
Greg Davies, the head of wealth at Cratos Capital, however said that lower gains from the sale of Tencent shares and reliance on non-operational items raised concerns despite Naspers showing promise.
“Fewer shares sold may impact overall earnings stability. Investors should stay vigilant,” wrote Davies on X yesterday.
Naspers said thought that the gains relating to the sell down of Tencent and impairment charges impacting earnings per share were excluded from headline and core headline earnings per share.
The company also considered core headline earnings as an appropriate indicator of the operating performance as it adjusts for non-operational items.
Davies added that “Naspers is on a strong growth trajectory” following its financial performance for the quarter that showed e-commerce profitability significantly exceeding last year, with “a commitment to innovation and leveraging technology is driving” this performance.
Shares in Naspers inched up by 0.62% on the JSE yesterday, reversing its 0.85% and 1.94% weakening in the past seven and 30 days respectively.
Last month, Prosus CEO Fabricio Bloisi said the company’s e-commerce operations were set to deliver about $400 million (R7 billion) in adjusted earnings before interest and taxes (EBIT) in the 2025 financial year, in line with that produced last year.
“Today Prosus is worth around $100 billion, and I am focused on how we can create another $100bn of value in the Prosus ecosystem by building and investing in fast growing and profitable businesses. I am also focused on how that will generate real returns for our shareholders,” Bloisi said.
Bloisi was appointed on May 17 this year and at the time market analysts said a key feature of his tenure was likely to be to bring the e-commerce businesses to operational profitability.
BUSINESS REPORT