REG - Prosus NV Naspers Limited - Trading Statement

Prosus NVAnnouncement

11/06/2024 16:30

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RNS Number : 0215S  Prosus NV  11 June 2024

Prosus N.V.

(Incorporated in the Netherlands) (Trade Reg No 34099856)

AEX and JSE Share Code: PRX      ISIN: NL0013654783

("Prosus")

 

Trading statement

 

Shareholders are advised that the Prosus group ("the Group") is finalising its
financial statements for the year ended 31 March 2024.

 

Prosus N.V. ("Prosus") is a subsidiary of Naspers Limited ("Naspers"), a
company incorporated in South Africa and listed on the Johannesburg Stock
Exchange ("JSE") in South Africa.

 

For context, in terms of the JSE Listings Requirements, South African listed
entities with a primary listing on the exchange are obliged to issue a trading
statement as soon as they are reasonably certain that the upcoming financial
results would differ by at least 20% from those of the previous corresponding
period. Trading statements are generally issued to provide shareholders with a
range of outcomes in respect of key financial metrics.

 

The financial results of Prosus almost completely account for Naspers's
results. Based on Naspers's anticipated results for the year ended 31 March
2024, Naspers is required to issue a trading statement in terms of the above
JSE Listings Requirements. To ensure that shareholders of Prosus are provided
with equivalent information simultaneously, Prosus is issuing this trading
statement.

 

During the year our ecommerce businesses delivered peer leading growth and
accelerated profitability. We are on track to fulfil our promises of
consolidated ecommerce profitability and cash flow generation. These factors,
combined with improved profitability from our investments, and the
continuation of the share repurchase programme, supported meaningful growth in
core headline earnings per share.

 

Core headline earnings per share and headline earnings per share for the year
are expected to increase driven by improved profitability of our ecommerce
consolidated businesses and equity-accounted investments, in particular
Tencent, and an increase in our net interest income.

 

Earnings per share is expected to be negatively impacted, driven by a lower
gain from a smaller sale of our Tencent shareholding this year compared to
last year.  In addition earnings from the Group's equity-accounted
investments decreased, primarily due to the lower gains on acquisitions and
disposals within Tencent relative to the previous year.

 

The gains relating to the sell down of Tencent and impairment charges
impacting earnings per share are excluded from headline and core headline
earnings per share. The board considers core headline earnings an appropriate
indicator of the operating performance of the Group, as it adjusts for
non-operational items.

 

The Group has illustrated below the anticipated changes in earnings, headline
earnings and core headline earnings per share for continuing operations and
total operations for the year ended 31 March 2024 as compared to the restated
31 March 2023 operations. Prior period numbers have been adjusted to reflect
the impact of the removal of the cross holding and in the case of continuing
operations both the removal of the cross-holding and the exit of the OLX Autos
businesses (Details discussed later in the statement):

 

                                                 Restated        31 March 2024 expected (decrease) /increase  Expected (decrease) /increase

                                                 31 March 2023   US cents                                     %

 Continuing operations                           US cents
 Earnings per N share ((1))                      357             (103-77)                                     (28.9%-21.6%)
 Headline earnings(***)per N share ((1))         27              103-107                                      381.4%-396.3%
 Core headline earnings(****) per N share ((1))  99              90-97                                        90.9%-97.9%

 

                                                 Restated        31 March 2024                   Expected (decrease)/increase

                                                 31 March 2023   expected (decrease) /increase   %

 Total operations                                US cents        US cents
 Earnings per N share ((1))                      368             (114-88)                        (30.9%-23.9%)
 Headline earnings(***)per N share ((1))         23              107-111                         465.2%-482.6%
 Core headline earnings(****) per N share ((1))  91              98-105                          107.7%-115.4%

 

The Group has restated the 31 March 2023 published information following OLX
Autos classification as Discontinued operations and the removal of the Group's
cross-holding structure.

 

We have made meaningful progress in exiting our OLX Autos businesses. All of
our OLX Autos operations that have been disposed of, classified as held for
sale or closed down by 31 March 2024 are presented as discontinued operations.
Prior period published earnings have been adjusted as follows:

 

 31 March 2023                           Published US$'m  Restated US$'m
 Earnings from Total operations          10 112           10 112
 Earnings from Continuing operations     9 575            9 809
 Earnings from Discontinuing operations  537              303

 

The successful removal of the cross-holding between Naspers and Prosus was
concluded in September 2023. The previous year's earnings per share have been
restated to reflect the capitalisation issue and removal of the cross holding
and gives a like-for-like comparison to the financial year 2024 earnings per
share. The financial year 2023 earnings per share is lower than in the past
due to the additional shares issued to remove the cross holding. Prosus
shareholders now own more shares than prior to the removal of the cross
holding.

 

Below is a representation of the impact of the removal of the Group's
cross-holding structure on the number of shares utilised in the determination
of the earnings per share.

 

 Period         Published WANOS(*)  Capitalisation issue and removal  Restated WANOS(*)

                                    of cross holding structure
 31 March 2023  1 357 367 416       1 392 906 871(**)                 2 750 274 287

(*) Weighted average number of shares in issue

(**) The group issued 808 533 377 ordinary shares N and reinstated 584 373 494
ordinary shares N

 

 

Consequent to the capitalisation issue, and the classification of OLX Autos to
discontinued operations, the per share information from continuing and total
operations for 31 March 2023 has been restated as follows:

 

 31 March 2023 - Continuing operations  Published US cents  Restated US cents
 Earnings per N share                   705                 357
 Headline earnings per N share          46                  27
 Core headline earnings per N share     185                 99

 

 31 March 2023 - Total operations    Published US cents  Restated US cents
 Earnings per N share                745                 368
 Headline earnings per N share       46                  22
 Core headline earnings per N share  184                 91

 

More details will be published with the financial statements on Monday, 24
June 2024.

 

Financial information on which this trading statement is based has not been
subject to an independent audit or review by the Group's auditors.

 

Definitions

 

*** Headline earnings represents net profit for the year attributable to the
Group's equity holders, excluding certain defined separately identifiable
remeasurements relating to, amongst others, impairments of tangible assets,
intangible assets (including goodwill) and equity-accounted investments, gains
and losses on acquisitions and disposals of investments as well as assets,
dilution gains and losses on equity-accounted investments, remeasurement gains
and losses on disposal groups classified as held for sale and remeasurements
included in equity-accounted earnings, net of related taxes (both current and
deferred) and the related non-controlling interests. These remeasurements are
determined in accordance with Circular 1/2023, headline earnings, as issued by
the South African Institute of Chartered Accountants, at the request of the
JSE Limited in relation to the calculation of headline earnings and disclosure
of a detailed reconciliation of headline earnings to the earnings numbers used
in the calculation of basic earnings per share in accordance with the
requirements of IAS 33 - Earnings per Share, under the JSE Listings
Requirements.

**** Core headline earnings, a non-IFRS performance measure, represent
headline earnings for the period, excluding certain non-operating items.
Specifically, headline earnings are adjusted for the following items to derive
core headline earnings: (i) equity-settled share-based payment expenses on
transactions where there is no cash cost to us. These include those relating
to share-based incentive awards settled by issuing treasury shares, as well as
certain share-based payment expenses that are deemed to arise on shareholder
transactions; (ii) subsequent fair-value remeasurement of cash-settled
share-based incentive expenses; (iii) cash-settled share-based compensation
expenses deemed to arise from shareholder transactions by virtue of
employment; (iv) deferred taxation income recognised on the first-time
recognition of deferred tax assets as this generally relates to multiple prior
periods and distorts current period performance;

(v) fair-value adjustments on financial and unrealised currency translation
differences, as these items obscure our underlying operating performance; (vi)
one- off gains and losses (including acquisition-related costs) resulting from
acquisitions and disposals of businesses as these items relate to changes in
our composition and are not reflective of our underlying operating performance
and (vii) the amortisation of intangible assets recognised in business
combinations and acquisitions. These adjustments are made to the earnings of
businesses controlled by us, as well as our share of earnings of associates
and joint ventures, to the extent that the information is available.

 

 

((1)) Per share information is based on the net number of N ordinary shares in
issue during the respective periods. The A ordinary shareholders and B
ordinary shareholders share 1/5(th) and 1/1 000 000(th) respectively of the
earnings attributable to the external N shareholders as at 31 March 2024. The
earnings will be expected to increase in the same ratio as N ordinary
shareholders.

 

11 June 2024

 

Symphony Offices Gustav Mahlerlaan 5

1082 MS Amsterdam The Netherlands

 

Sponsor:

Investec Bank Limited

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