Tech investor firm Prosus has decided to exit its shareholding in Russian classifieds business Avito. Company sources were quoted as saying that this is not unconnected with the invasion of Ukraine by Russia. Prosus is owned by South Africa’s conglomerate, Naspers.
“On 25 March 2022, we announced the separation of the Russian classifieds business Avito from our OLX Group. Following completion of this operational separation, Prosus has now decided to exit the Russian business,” the group said in a statement to shareholders on Friday. Prosus holds 100% of Avito’s shares.
“We have started the search for an appropriate buyer for our shares in Avito.”
The move follows Russia’s invasion of Ukraine, which led to severe sanctions being imposed on the country, mainly by Western nations, triggering the exit of many international brands.
In March, Prosus, which is headquartered in the Netherlands, said it would cut ties with Avito and would not seek to benefit economically from its ownership of the business.
Avito was one of Prosus’s most valuable investments until Russia’s invasion of Ukraine on 24 February, with an estimated valuation of around US$6-billion.
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Prosus, the subsidiary of the South African Internet and media giant Naspers, has announced its intention to sell 2% of the shares it holds in Tencent, the Chinese holding company specializing in video games and the Internet.
The transaction, which involves 191.8 million shares, will be executed through MIH TC Holdings Limited, a subsidiary of the company listed on the Dutch market.
Prosus will reduce its stake from 30.9% to 28.9%, but will remain the largest shareholder in the group based in Shenzhen, China.
“Prosus intends to use the proceeds of the sale to increase its financial flexibility in order to invest in its growth, as well as for general corporate purposes,” the group said in a note to investors. present in a multitude of companies, particularly in India, Brazil and Russia.
Prosus, beaten in July 2020 by the Norwegian Adevinta who bought the e-Bay classifieds business, could be interested in new opportunities, especially in the e-commerce sector which has been very successful since the advent of covid-19. The Amsterdam Stock Exchange-listed company said it will not make any further sales of Tencent shares for the next three years.
Recall that Naspers’ investment in Tencent in 2001 only cost him about $ 32 million. Tencent recently announced quarterly profit up 175% at the end of December 2020.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
One of the world’s largest tech investors and the global internet arm of South Africa’s company Naspers, Prosus N.V. (AEX:PRX), has announced its results for the twelve months ended 31 March 2020.
Basil Sgourdos, Group Chief Financial Officer
Group highlights for the period
The complete results and commentary are available at www.prosus.com/investors. See “Notes” section for an explanation of the numbers.
Revenues increased 23% to US$21.5bn (FY19: US$18.3bn).
Trading profit grew 16% to US$3.8bn.(FY19: US$3.4bn).
Core headline earnings grew 13% to US$3.4bn (FY19: US$3.1bn).
Ecommerce revenue grew 33% to US$4.3bn (FY19: US$3.6bn):
Food Delivery orders grew by 102%, driving revenue growth of 105% to US$0.8bn (FY19: US$0.4bn);
The Classifieds and Payments & Fintech segments remain profitable at their core and continue to grow profits, while investing to drive further growth.
Tencent grew revenues 21% year-on-year*.
Invested US$1.3bn in existing and new businesses.
Solid net cash position of US$4.5bn, and an undrawn US$2.5bn revolving credit facility.
The group is well-positioned to navigate the Covid-19 uncertainty ahead.
*Prosus holds a 31% stake in Tencent.
Basil Sgourdos, Group Chief Financial Officer, said:
“The group has delivered a good set of annual results, with all of our segments making good progress against their financial and strategic objectives. Revenue grew 23% to US$21.5bn, and trading profit grew 16% to US$3.8bn. The Classifieds and Payments & Fintech segments continued to deliver growth, and both are profitable at their core. Our Food Delivery segment almost doubled revenues and is now one of the fastest-growing food delivery businesses globally, reflecting our ability to build scale and strong positions in high-growth markets. We ended the period with a net cash position of US$4.5bn, which positions us well to continue investing in our businesses and pursuing growth opportunities.”
Bob van Dijk, Group Chief Executive Officer, said:
“The past year was a truly transformational twelve months for the group, marked in September by the listing of our international internet assets as Prosus on Euronext Amsterdam. This is an exciting step forward, opening up fresh opportunities to build long-term sustainable value. Throughout the year, we continued to execute our long-term strategy of building leading consumer internet companies. This was reflected in a solid performance driven by revenue growth, notably the Food Delivery segment, and improved profitability in our ecommerce businesses, particularly the Classifieds segment, underpinned by continued growth of Tencent.
In recent months, Covid-19 has had a marked impact on the daily lives of citizens and economies across the world. From the start, we have prioritised the health and well-being of our people, their families, and the communities we serve. We are working hard to protect our businesses for the long term. At both a group and a local company level, we have also provided support to governments and communities to play our part in the response to the pandemic. While the global societal and economic impacts of Covid-19 are likely to persist for some time, we are confident of our ability to weather the storm. We also expect that group businesses are likely to benefit from a further acceleration of the underlying trend toward online — brought about by the Covid-19 pandemic — to emerge well-placed for long-term growth.”
Koos Bekker, Group Chair, said:
“This was a good year in the evolution of our group. As the world changes, so do we. The fundamentals of several of our businesses look sound. However, during the last quarter the world economy took a massive blow. Its consequences will include certain technologies accelerating, but also some social and political shifts that are hard to predict. We will continue to respond and adapt.”
NOTES on the numbers:
All growth percentages are shown in local currency terms and adjusted for acquisitions and disposals unless otherwise stated.
All amounts are shown on an economic-interest basis (i.e. including a proportionate consolidation of the contribution from associates and joint ventures) unless stated as being presented on a consolidated basis.
All numbers shown are from continuing operations, i.e. excluding MultiChoice Group, which has been presented as a discontinued operation in FY19.
The fundamentals of the group are strong, and the year ended with good momentum off the back of a solid performance. The group is focused on the long term and expects to benefit from a further acceleration of the underlying trend toward online ecommerce companies brought about by the Covid-19 pandemic. We face the challenging period from a position of relative financial strength and with sufficient liquidity to navigate the changing environment, to continue to invest in our businesses to position them well for future recovery, and to continue to seek out new opportunities. We will remain disciplined in our investment approach, deploying capital on growth assets operating in growth industries with an expected return in excess of our cost of capital.
-ends-
About Prosus
Prosus is a global consumer internet group and one of the largest technology investors in the world. Operating and investing globally in markets with long-term growth potential, Prosus builds leading consumer internet companies that empower people and enrich communities. The group is focused on building meaningful businesses in the online classifieds, payments and fintech, and food delivery sectors in markets including India, Russia and Brazil. Through its ventures team investments, in areas including edtech and health, Prosus actively seeks new opportunities to partner with exceptional entrepreneurs who are using technology to address big societal needs. Every day, millions of people use the products and services of companies that Prosus has invested in, acquired or built, including Avito, Brainly, BYJU’S, Codecademy, eMAG, Honor, iFood, LazyPay, letgo, Meesho, Movile, OLX, PayU, Red Dot Payments, Remitly, SimilarWeb, SoloLearn, Swiggy, and Udemy.
For more information on our FY2020 year results please contact: Eoin Ryan Head of Investor Relations Tel: +1 347–210–4305 Email: eoin.ryan@prosus.com
Sarah Ryan Media Relations, International Mobile: +31 6 297 21038 Email: sarah.ryan@prosus.com
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer.
