Naspers released its financial results for the year ended 31 March 2023, which revealed a company struggling to create shareholder value.
Revenue from continuing operations increased from $6.3 billion to $6.8 billion, but that is about where the good news ended.
Naspers’ operating loss widened 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) declined from 4,218 to 2,078, and diluted earnings per share declined from 4,127 to 1,998.
Naspers attributed its poor results to “Tencent’s lower contribution and an increase in the group’s share of losses from e-commerce associates”.
Naspers CEO Bob van Dijk talked up the results, saying they have made good progress across all of their strategic objectives over the last year.
“Against a challenging backdrop, the eCommerce portfolio has performed well, and the open-ended buyback programme is driving improved NAV per share,” he said.
Naspers also announced 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 will be affected by both Naspers and Prosus issuing shares to their existing shareholders.
Naspers and Prosus will waive their rights to participate in the respective capitalisation issue of new Prosus or Naspers shares.
“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,” Van Dijk said.
Despite the widening operating loss and declining profit, the market liked what Naspers said, and the share price popped on the news.