Naspers reveals $1.4 billion operating loss

Naspers Limited has released its financial results for the year that ended on the 31^st of March 2023, and they have revealed a company struggling to create shareholder value.

The revenue from continuing operations increased from $6.3 billion to $6.8 billion, but unfortunately the good news ended there. Naspers’ operating loss grew bigger from $985 million to $1.4 billion, and profit for the year declined from $18.5 billion to $10.0 billion.

Earnings per share (US cents) went down from 4,218 to 2,078, and diluted earnings per share went down from 4,127 to 1,998. Naspers says the poor results are due to “Tencent’s lower contribution and an increase in the group’s share of losses from e-commerce associates”. The CEO, Bob van Dijk talked up the results, mentioning that they have made good progress across all of their strategic objectives over the last year.

He said: “Against a challenging backdrop, the eCommerce portfolio has performed well, and the open-ended buyback programme is driving improved NAV per share.” The company also made an announcement for a proposed transaction to simplify the ownership structure by removing the cross-holding between Naspers and Prosus, allowing the open-ended share buyback to continue.

The transaction is set to be effected by both Naspers and Prosus issuing shares to their existing shareholders. The companies will then will waive their rights to participate in the respective capitalisation issue of new Prosus or Naspers shares.

Van Dijk added by saying: “We are on a good trajectory. We have strong momentum and remain confident in our commitment to achieve profitability in our eCommerce portfolio during the first half of 2025.”

Despite the widening operating loss and declining profit, the market liked what Naspers said, and the share price popped on the news.