Naspers sees earnings slide on Prosus listing

Naspers said in a trading statement on Monday (16 November), that it expects to report a decline in earnings following the listing of subsidiary Prosus in Amsterdam last year, which has seen the amounts it receives from the company slip to 72.66% in the current period, from 100% before.

For the period ended 30 September 2020, the group’s earnings, headline earnings and core headline earnings growth is impacted largely by reduced earnings contributions in the current year from the Prosus Group, post its listing in September 2019 and the creation of the free-float resulting in a significant non-controlling interest of the group, Naspers said.

“As at 30 September 2019 we recognised 100% of the Prosus earnings compared to 72.66% in the current period. The expected non-controlling interest share in the core headline earnings for the period would be approximately $600 million.

“We refer shareholders to the separate Prosus trading statement which is free of the impacts outlined in this paragraph and outlines expected increases in headline earnings and core headline earnings of the group’s operations. We remind shareholders that Prosus represents the majority of the group’s operations.”

Naspers said that it considers core headline earnings an appropriate indicator of the operating performance of the group, as it adjusts for non-operational items.

Core headline earnings per share for the current period is expected to decrease by between 28 and 5 cents per share (between 7.4% and 1.3%), driven mainly by the creation of the Prosus free float in September 2019.

Adjusted for this, core headline earnings growth per share is expected to increase in the same range as Prosus, between 23.8% – 30.5%.

“Like most companies, in the period we faced some challenges due to Covid-19, particularly in countries where government lockdown regulations were wide ranging and long lasting,” Naspers said.

“However, we have seen a sharp recovery in all of our impacted businesses as our contingency plans produced results once lockdown regulations began easing. We continue to respond quickly to the evolving Covid-19 situation to ensure we safeguard our people, maintain our ability to serve our customers and protect our businesses for the long-term.”

The group said that forward visibility remains difficult, given the challenges some countries face in dealing with the longer-term effects of Covid-19.

“We have completed several acquisitions in the first six months and have continued to explore growth opportunities to advance our strategy, expand our ecosystem and to position the business for continued long-term growth,” it said.

More details will be published with the group’s condensed consolidated interim financial statements on Monday, 23 November 2020.

Read: Naspers-owned Prosus to purchase $5 billion in Naspers and Prosus shares

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Naspers sees earnings slide on Prosus listing