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Prosus Profit Up on Tencent Stake, As E-Commerce Loss Grows

Group, which owns a $175 billion minority stake in Tencent, posted an 8% rise in first-half trading profit to $2.9bn as revenue rose rapidly in its overall portfolio


Prosus staff cheer the group's listing in Amsterdam two years ago. File photo by Reuters.

 

Prosus, which owns a $175 billion minority stake in Chinese internet gaming and social media group Tencent, posted an 8% rise in first-half trading profit to $2.9 billion as revenue rose rapidly in its overall portfolio.

Sometimes compared to SoftBank and its Vision Fund, Prosus NV, it owns stakes in a wide range of consumer internet companies, with returns from Tencent Holdings dominating its overall performance.

Although its net profit spiked after Prosus booked a one-time profit of $12.3 billion on the sale of part of its Tencent stake, operating losses at businesses it controls increased.

Prosus said in a statement on Monday that revenues at its e-commerce portfolio had risen by 53% to $4.2 billion, while that segment’s trading loss increased to $372 million from a loss of $214 million in the same period a year ago.

The e-commerce portfolio, which does not include returns from its holding in Tencent, spans a group of businesses that Prosus either owns or controls in classified advertising, food delivery, educational technology and fintech and payments.

Prosus estimated the market value of the e-commerce businesses at around $49 billion.
 


 

Strong Food Delivery Growth

It showed better profitability in its classifieds businesses, and strong growth at its food delivery businesses, which includes iFood in Brazil and Swiggy in India.

The figures were in line with indications the company had given in a November 16 pre-announcement.

Bob Van Dijk, the Prosus CEO, said he did not expect China’s recent moves to crack down on large technology firms to impact future earnings negatively.

“In spite of some regulation coming up … Tencent is in my view the best-positioned internet company in the most attractive internet market in the world,” he told reporters on a call.

In August, Prosus set up a cross-holding structure with Naspers, under which Prosus shareholders own 60% of their underlying assets but Naspers retains control. They share a single board.

In its separate earnings report, Naspers, South Africa’s largest company by market capitalisation, posted half-year revenue of $17.2 billion, up 29% from a year ago.

 

• Reuters with additional editing by Jim Pollard

 

ALSO SEE:

Tencent Growth At 17-Year Low After Regulatory Onslaught

Tencent And Alibaba Set For Profit Drops As Crackdowns Bite

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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