Naspers expects decline in earnings on Covid-19 impact

Naspers, Africa’s biggest company by market value, flagged a decline of as much as 16% in annual earnings on Thursday, citing a lower contribution from its global internet arm.

Naspers sold about a third of Prosus, the global internet business that houses the company’s valuable stake in Chinese money-spinner Tencent, in an Amsterdam stock market flotation. It was part of CEO Bob van Dijk’s efforts to release value trapped in a valuation gap between the sum of its parts and its market capitalisation.    

The company said it expected core headline earnings per share, the company’s primary measure of profit that strips out certain one-off items to give a clearer picture of the underlying performance, to drop by between 10.3% and 16.3% in the year to the end of March.

Naspers, which is due to release its earnings report on June 29, warned that the Covid-19 global pandemic had affected some of its operations. Many of the markets in which it operates entered lockdowns in the last two weeks of March 2020. The company said there could be potential harm in the 2021 financial year.  

“That said, it is important to note that the fundamentals of our businesses remain very strong and we believe that we are well positioned to weather this unprecedented storm. We have sufficient liquidity to provide our businesses with the appropriate level of funding as well as to invest in external opportunities that may present themselves during this period,” the company said.