Naspers has been having significant losses over the last financial year, and one of the reasons is that South Africa’s biggest online retailer, Takealot, posting a loss of R400 million.
The company said: “The operating environment in the fiscal year ended 31 March 2023 (FY23) was characterised by significant geopolitical and macroeconomic uncertainty. Amid that uncertainty, we acted decisively to strengthen our financial footing and deliver value for shareholders.”
It also mentioned that its e-commerce businesses held up a top line momentum, with it expecting to produce substantial profitability improvements in FY24 and beyond. With the main contributions coming from food delivery and payments and fintech, its consolidated revenue comes from continuing operations that went up by 8% to US$6.8 billion (R126 billion).
Moreover, the company’s operating losses went up from US$985 million (R18.2 billion) in FY22 to US$1.38 billion (R25.6 billion) in FY23. Its trading losses went up year-on-year from US$684 million (R12.6 billion) to US$844 million (R15.6 billion).
The group added that its trading losses were went down by 21% in the second half of the year compared to the first, which aligns with its commitment to make its e-commerce business profitable by FY25. The main earnings also went down by 48% to US$1.1 billion (R19 billion), which it said was primarily caused by lower contributions from its associates, mainly Tencent, which was hit hard by the Covid-19 lockdowns and new Chinese regulations. The earnings also decreased from US$249 million (R4.6 billion) to US$1.3 billion (R24 billion), which came from the group’s lower profitability across its associates and the larger operating losses for its consolidated businesses.
“This was partially offset by reduced share-based compensation expenses related to the remeasurement of the group’s cash-settled scheme and no grants to executive directors, as well as lower net finance costs due to increased interest income from cash balances.” – the company added.
Takealot:
The gross merchandise volume (GMV) from Takealot shot up by 13%, while its revenue was up 12% in local currency, excluding mergers and acquisitions. Even though that was the case, the group suffered a loss of US$22 million (R400 million), representing a trading margin of -3%.
Naspers mentioned that this reflects slowing consumer demand due to rising inflation and high-interest rates and it added by saying: “In addition, profitability was impacted by rising operational costs due to persistent national rolling power blackouts, escalating fuel costs, and the effect of global supply-chain constraints.”
Takealot’s GMW rose by 14% year-on-year, while Superbalist had its revenue grow by 11% in rand terms, despite further competition and decreasing consumer demand.
