Naspers expects to sell more than R32bn worth of non-core and underperforming assets in the year ahead as the JSE’s largest tech investor looks to bolster and grow its existing portfolio.
Deal flow for the Cape Town-based group and international unit Prosus has been healthy in recent years with a mixture of acquisitions, disposals and venture capital investments.
Since taking the reins in mid 2024, CEO Fabricio Bloisi has made his mark, landing three major acquisitions — Despegar, Latin America’s leading online travel agency, for $1.7bn; the €1.1bn purchase of French vehicle classified site La Centrale; and, most recently, the €4.1bn takeover of Just Eat Takeaway.com, Europe’s biggest meal delivery company.
In the same period the group notched four blockbuster initial public offerings (IPOs) in India.
Now, the Brazilian is changing tack.
“To be clear on our roadmap, my focus is 100% on the fundamentals: driving efficiency, growth, profitability and innovation across what we already own,” Bloisi said in a letter to shareholders, emphasising he does not have “plans for any major mergers & acquisitions while we focus on this”.
Instead, “you can expect us to continue selling non-strategic and underperforming assets, with more than $2bn in sales expected this fiscal year and additional sales next year in even higher volume”.
To be clear on our roadmap, my focus is 100% on the fundamentals: driving efficiency, growth, profitability and innovation across what we already own,” Bloisi said in a letter to shareholders, emphasising he does not have “plans for any major mergers & acquisitions while we focus on this
Management has, over the years, been trying to unlock value from its vast portfolio of businesses in areas such as food delivery, classifieds, fintech and education, which are not fully reflected in the Prosus share price.
The value of units such as PayU, Brazil’s iFood, Germany’s Delivery Hero and India’s Swiggy are dwarfed by the group’s stake in Tencent, the China-based technology and entertainment conglomerate, valued at about $160bn.
To counter this the group has been focused on proving the value of its non-Tencent business with the first goal of generating profits being achieved in 2024.
The strategy appears to be bearing fruit as Naspers reported a strong set of interim results driven by e-commerce growth and is on track to deliver its guidance of more than $1.1bn in adjusted earnings before interest, tax, depreciation and amortisation (ebitda) for the full year to March.
Consolidated revenue for the six months to end-September grew 20% to $4.1bn driven by strong growth from iFood in Latin America (LatAm), OLX in Europe and PayU in India.
E-commerce adjusted ebitda grew 71% to $557m.
The group’s ambitious guidance target is to achieve more than $7.3bn in revenue and more than $1.1bn in earnings before ebitda in the 2026 financial year.
“Remember, just three years ago Prosus was losing almost $200m a year. We will continue to improve Prosus’ total profitabilty meaningfully over the coming years,” Bloisi says.
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