Naspers results boosted by food delivery, education surge

Consumer internet company, Naspers on Monday (23 November) reported revenue growth of 32% for the six months ended September 2020, to $13 billion, boosted by growth across food delivery, online retail (etail) and education.

The company reported the following strong numbers:

  • 141% revenue growth of food delivery;
  • 69% revenue growth in etail;
  • 54% revenue growth in edtech.

Group trading profit increased by 42% to $2.6 billion, while core headline earnings were $1.6 billion driven by improved profitability from ecommerce units and the growing contribution from Tencent.

The year-on-year 5% decrease reflects that Naspers owns 72.66% of Prosus in the current financial year and owned 100% in the prior year, Naspers said. Prosus revenues grew 32% to $12.7 billion.

Bob van Dijk, Group chief executive officer, said: “Our strong performance reflects the resilience and adaptability of the group and of our teams to effectively navigate challenging times.

“We entered the pandemic with financial strength and good momentum and in the second half of the period, our businesses recovered well from the initial impact of Covid-19 and are now fundamentally stronger than they were going into the pandemic.”

He said that the pandemic has accelerated activity in the consumer internet space, benefitting the businesses.

“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,” Van Dijk said.

Several companies had stand out performances:

  • iFood, an online food delivery portal in São Paulo, Brazil, grew revenues by 234% YoY with KPIs including order frequency and order value hitting record levels.
  • PayU GPO, a fintech company that provides payment technology to online merchants, grew revenues 48% as people used cashless payment methods.
  • Udemy, a US based open online course provider aimed at professional adults and students, grew enrolments more than 400%.
  • BYJU’S, an Indian based learning app and online tutoring firm, saw 180% growth in students on top of already high growth rates.

In the Edtech space, Naspers said it stepped up its total investment to more than $1 billion and seven companies in this fast-growing sector.

Looking ahead, Naspers said the current operating environment remains uncertain and the longer-term social and economic impact of Covid-19 is unclear. “The group is on a solid financial footing and the fundamentals of the underlying businesses are strong, with all well-positioned to build on the accelerating shift to online triggered by the pandemic.”

“Management remains focused on value creation for shareholders through driving profitability and cash generation in the group’s more-established ecommerce businesses, while investing for growth in food delivery, classifieds transactions, credit, and edtech,” it said.

On 30 October 2020, the group announced its intention for Prosus to acquire up to $5 billion of Prosus and Naspers shares. This will be implemented by the acquisition of up to $1.4 billion Prosus N ordinary shares and $3.6 billion Naspers N ordinary shares on the market.

Read: Naspers invests R45 million in local online learning platform

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Naspers results boosted by food delivery, education surge