Naspers records 8% revenue growth with classifieds and food delivery businesses

South African technology investor Naspers announced on Monday, June 24, a significant surge in its full-year earnings, driven by the robust performance of its e-commerce ventures and substantial contributions from Chinese tech giant Tencent.

The company reported that its core headline earnings per share from continuing operations more than doubled, rising to 1,148 U.S. cents for the year ending March 31, compared to a restated 546 cents in the previous year.

Naspers, whose global investments are managed through Prosus, highlighted that its consolidated e-commerce business achieved profitability in the second half of the fiscal year, surpassing its initial target of reaching this milestone by the first half of 2025.

Ervin Tu, the Interim Group CEO, of Prosus and Naspers, said in a statement:

“We have made substantial progress this year in delivering against our strategy. Our e-commerce portfolio is profitable for the first time, and our ongoing buyback has created significant shareholder value. We also reorganised the Group, bringing us closer to our businesses so that we can enhance their performance further. AI continues to be the highest priority, and our in-house AI expertise, combined with our implementation of AI in practice across our entire portfolio, are distinct competitive advantages. AI is instrumental to our efforts in building and investing behind the next wave of technology leaders.”

The company reported an annual consolidated e-commerce trading profit of $24 million, a remarkable turnaround from the $435 million loss recorded the previous year.

The company also saw a consolidated revenue increase of 8% from continuing operations, amounting to $6.4 billion. The growth was primarily fuelled by the strong performance of its Classifieds and Food Delivery segments.

Highlights:

• Accelerated peer-leading topline growth of 8%, with e-commerce consolidated revenue of US$6.3 billion.
• E-commerce profitability is ahead of target, with a US$460 million improvement in trading profit to US$24 million.
• Free cash flow increased from US$836 million to US$477 million, a 2x improvement year-on-year.
• US$32 billion of value was created by the ongoing buyback programme, delivering 9% NAV per share accretion.

Naspers’ South Africa portfolio

Takealot Group, which comprises Takealot.com, Mr D, and Superbalist, combined, reported a revenue of $792 million (FY 2024), reflecting a 2% year-on-year decline from the previous year’s $808 million (FY 2023).

Despite this decrease in revenue, the group’s trading loss improved significantly, narrowing to $14 million from $22 million in the prior year, marking a -2% trading profit margin.

There was increased competition throughout the year as competitors continued to invest heavily in e-commerce capabilities.

Naspers

“Global competitors have made strong inroads into a price-conscious South African market and new entrants could further intensify competition.”

It noted the threat of Chinese retail importers Temu and Shein. Despite this, the Takealot Group delivered a 3% growth in GMV and an 8% growth in revenue in local currency.

Naspers said Takealot.com’s (e-commerce retailer) gross merchandise value (GMV) grew by 3%, while trading losses were reduced by $4 million (R75 million) during the financial year.

It also noted that Takealot’s marketplace seller base exceeded 10,000 sellers in March 2024.

Mr D (food delivery) and Superbalist (wardrobe and lifestyle store) saw GMV increases of 16% and 7% respectively, capitalising on expanded product ranges and customer engagement.

Phuthi Mahanyele-Dabengwa, South Africa CEO, of Naspers, said:  “Our businesses in South Africa continue to innovate and explore new opportunities, despite the challenging economic conditions affecting consumers. This demonstrates our commitment to developing a deep understanding of consumer needs and to developing solutions that improve everyday life.

“We are proud of the performance of these businesses, most notably Takealot.com which has surpassed 10,000 active sellers on its marketplace. We believe that the platform economy is a catalyst for economic growth, innovation, and job creation in South Africa. This is the unique value that Naspers brings to South Africa”, she said.

Meanwhile, Takealot said Superbalist’s revenue growth has struggled because of the acceleration of international players, like Temu and Shein, offering cheap clothing products in South Africa.

The South African e-commerce giant hasn’t turned a profit since it was founded 15 years ago. It incurred a loss of $22 million (R407 million) in 2023, up from $7 million (R129 million) in 2022.

Another Naspers entity, AutoTrader (motoring marketplace) reported an 11% rise in user traffic, with platform growth of 97% since 2019, highlighting a surge in online vehicle shopping.