Business Reporter.
Multimedia and technology group Naspers has warned shareholders to expect their headline earnings per share (HEPS) to drop between 74% to 82%.
Naspers said that the main reason for the drop is that the operating environment in the fiscal year was characterised by significant geopolitical and macroeconomic uncertainty, which impacted its operations.
This led to reduced profit among critical segments, especially Tencent.
During the year, Naspers reduced its stake in Tencent from 29% to 26%, and the cash acquired from those sales was used to repurchase its shares.
In addition, the group is still working towards profitability in its e-commerce segment, which it envisages reaching in FY25.
“Our focus remains on building long-term sustainable value in local marketplaces with peer-leading growth and materially improving profitability.
“After years of investment and significant growth, our businesses have scaled meaningfully and each segment now demonstrates a clear path to profitability. We are committed to achieving consolidated e-commerce profitability during the first half of FY25,” it said.
During the period, Naspers said that its consolidated e-commerce portfolio showed good growth and improving profitability, however, overall earnings in the period were impacted primarily by a reduced profit contribution from its associates, particularly Tencent.
Tencent is the Group’s largest equity-accounted associate and was impacted by Covid-19 lockdowns and regulations in China. Tencent has since reported its first quarter numbers for the financial year ending 31 December 2024, delivering earnings growth as it benefits from China’s re-opening, a stable regulatory environment and cost reductions.
Shares in Naspers were trading about 1.7% lower on Wednesday morning but have gained about 79% in the past year. Shares in Prosus were down about 1.5% and have gained more than two-thirds over the past year.