Company Announcements

PROSUS

Reviewed condensed consolidated interim financial statements

for the six months ended 30 September 2023

COMMENTARY

September 2023 marked the fourth anniversary of listing Prosus on the Euronext Amsterdam, creating Europe's largest consumer internet company. Last year, the Group committed to deliver consolidated Ecommerce profitability during the
first half of FY25 (1H25); continue the open-ended share repurchase programme; simplify our structure by removing the crossholding; and highlight value in our portfolio of assets. As we take stock halfway through FY24, we have made significant progress on all these commitments.

Consolidated revenue from continuing operations grew 13% (16%) to US$2.6bn. The greatest contributors were Classifieds, Food Delivery, and Payments and Fintech. Ecommerce consolidated trading losses from continuing operations decreased by US$220m to US$36m in 1H24 as cost reductions and improved efficiencies came through. Trading losses for this segment have reduced from a peak of US$256m in 1H23 and demonstrate our accelerated approach to breakeven. Free cash inflow was strong at US$645m.

Core headline earnings were US$2.0bn - an increase of 85% (118%). This was primarily due to improved profitability of our ecommerce consolidated businesses and equity-accounted investments, particularly Tencent, and higher net interest income during the period.

The growth rates discussed in this commentary represent a comparison between 1H24 and 1H23, unless otherwise stated. The percentages
in brackets represent local currency growth, excluding the impact of acquisitions and disposals (M&A), and provide a clearer view of the underlying operating performance of our businesses.

The Group's ecommerce businesses have maintained topline growth. They also continued to improve profitability in 1H24 and we are increasingly confident of delivering ahead of commitments.

After years of investment and growth, our businesses are now at scale and demonstrate improving profitability. We expect to maintain
peer-leading growth while continuing to drive profitability. Given better results in the current period, we expect to achieve our ambition
of consolidated Ecommerce profitability earlier than 1H25. We are now targeting profitability for 2H24. The goal is to build on the strong momentum in recent halves, sustain profitability growth for each subsequent period and reach good margins.

At 30 September 2023, the ongoing open-ended share repurchase programme has reduced the Prosus net share count by 16% and generated US$25bn for our shareholders. This was based on narrowing of the discount and an increase in net asset value (NAV) per share. In the same month, we completed the removal of the crossholding, which received overwhelming shareholder support. Finally, we continue to build value for shareholders in our portfolio's underlying assets.

Delivering on our commitments should result in meaningful long-term value creation and shareholder returns.

Food Delivery's performance remained strong, with revenue growing ahead of peers and profitability improving meaningfully. iFood sustained momentum in the core restaurant food-delivery businesses, while taking a more considered approach to its grocery growth extensions.
iFood's profitability margins in the core are comparable to its global peers and margins will expand further.

OLX Europe's classifieds business has delivered growth and enhanced profitability, driven by improved operational metrics and a strong performance in the pay-and-ship offering. Following our strategic decision to exit OLX Autos (the automobile transaction business), we made progress in finalising deals across various markets. Where buyers have not been identified, we have initiated closure processes and liquidated inventories.

Payments and Fintech recorded meaningful growth in the core payment service provider (PSP) business, driven by India payments, Turkey (Iyzico) and India credit. The consolidated trading loss narrowed due to improved profitability in Global Payments Organisations (GPO),
lyzico and savings from new initiatives in PayU India. PayU announced the sale of GPO for US$610m, which is expected to close in the first
half of calendar 2024. PayU GPO's financial results are included in continuing operations.

In Edtech, Stack Overflow's monetisation initiatives have lagged expectations. We recorded a further impairment in 1H24. Stack Overflow has taken significant action to improve its operating profile and introduce generative AI capabilities. GoodHabitz is benefiting from investment in product enhancements and a more measured international rollout programme.  In the case of both Stack Overflow and GoodHabitz, the Group has intervened to improve business performance. We will critically assess the impact of these interventions in due course.

The Group's balance sheet is strong with central cash of US$15.1bn, including short-term cash investments. We remain committed to our investment-grade rating and disciplined capital allocation. In total, US$477m was invested capital in 1H24.

In June 2023, we announced a proposal to simplify the Group's structure by removing the crossholding between Naspers and Prosus. The transaction delivered on its commitments to shareholders while preserving the benefits of the exchange offer effected in 2021. In September 2023, the transaction concluded. The resulting simplified structure maintains the current economic ownership of Prosus by Naspers and ensures the Group can continue its open-ended share repurchase programme.

The open-ended share repurchase programme launched in June 2022 is funded by the daily sale of a small number of Tencent shares. From launch, to 30 September 2023, the combined holding company discount of Naspers and Prosus reduced by around 17 percentage points. Over the same period, Prosus repurchased 210 413 966 of its ordinary shares N, with a total value of US$13.9bn, at a significant discount to their NAV, leading to a 7% accretion in NAV per share. The narrowing of the discount and the increase in NAV per share has created some US$25bn of value for shareholders. We remain committed to this programme as it simultaneously creates value for shareholders while increasing our exposure to Tencent and our ecommerce portfolio on a per share basis.

Naspers funds its open-ended share repurchase programme with regular sales of Prosus shares. By 30 September 2023, Naspers had sold 67 715 575 Prosus ordinary shares N to the value of US$4.4bn and bought back 26 631 055 Naspers N ordinary shares to the value of US$4.3bn.

A reconciliation of alternative performance measures to the equivalent IFRS metrics is provided in 'Other information - Non-IFRS financial measures and alternative performance measures' of these condensed consolidated interim financial statements.

FINANCIAL REVIEW

Consolidated Group revenue from continuing operations increased US$287m, or 13% (16%), from US$2.3bn in the prior period to US$2.6bn. This was primarily due to strong revenue growth in Classifieds, Food Delivery, and Payments and Fintech. As a result, trading losses decreased to US$110m from US$338m. The largest contributor of the reduction in continuing operations' trading loss was the drop of US$220m in Ecommerce consolidated trading loss to just US$36m. Our consolidated ecommerce businesses are now of scale and well on track to achieve profitability.

Operating losses rose US$329m to US$415m, primarily due to an impairment loss recognised on Edtech investments.

Amid challenging macroeconomic conditions and the decline in some industry valuations, we recognised impairment losses on goodwill of US$440m in the current period for Stack Overflow (US$340m) and in the OLX Autos business classified as held for sale (US$100m).

We also recognised impairment losses on equity-accounted investments of US$175m related to Skillsoft (US$42m) and unlisted equity-accounted associates in the Prosus Ventures portfolio reported in the Other Ecommerce segment (US$133m).

Profit from equity-accounted results (our share of equity-accounted investments' net profit) increased by US$93m, or 9%, from US$1.1bn
in the prior period to US$1.2bn. This was driven by improved profitability across our equity-accounted associates, particularly in the Food Delivery segment.

In March 2023, we announced the decision to exit the OLX Autos business unit. All operations of this business are presented as discontinued operations as they have been disposed, classified as held for sale or closed down by 30 September 2023. OLX Autos operations, previously presented in continuing operations for 31 March 2023, have been presented in discontinued operations as of 30 September 2023.

Core headline earnings from continuing operations were US$2.0bn. This is an increase of 85% (118%), primarily due to improved profitability of our ecommerce consolidated businesses and equity-accounted investments, particularly Tencent, and an increase in net interest income during the period.

Headline earnings from continuing operations rose by US$1.2bn to US$1.4bn.

The Group sold 1% of Tencent's issued share capital to fund the open-ended share repurchase programme, resulting in a gain of US$2.9bn during the period (1H23: US$2.8bn).

Free cash inflow was US$645m, a sizeable US$754m improvement on the prior period. This was due to improved profitability in Food Delivery and Classifieds, as well as better working capital management in Etail, and Payments and Fintech. Excluding OLX Autos, free cash inflow was US$725m. Tencent remains a major contributor to our cash flow via an increased dividend of US$758m (FY23: US$565m).

Prosus has a net debt position of US$18m, comprising US$15.1bn in central cash and cash equivalents (including short-term cash investments), net of US$15.1bn in central interest-bearing debt (excluding capitalised lease liabilities). In addition, we have an undrawn US$2.5bn revolving credit facility. During the period, we recorded a net interest income of US$159m.

There were no new or amended accounting pronouncements effective 1 April 2023 with a significant impact on the Group's condensed consolidated interim financial statements.

The company's external auditor has not reviewed or reported on forecasts included in these condensed consolidated interim financial statements.

SEGMENTAL REVIEW

Ecommerce

Ecommerce consolidated revenue from continuing operations increased US$287m, or 13% (16%), from US$2.3bn in the prior period to US$2.6bn. This was primarily due to revenue growth in Classifieds, Food Delivery, and Payments and Fintech. Trading losses decreased to US$36m from US$256m, demonstrating the operating leverage of the businesses, which are on a path to profitability.

On an economic-interest basis, Ecommerce revenue grew 16% (18%) to US$4.9bn and trading losses improved from US$805m to US$246m.

Food Delivery

iFood

iFood represents our consolidated food-delivery business. We also have several associates, notably Delivery Hero and Swiggy.

iFood delivered revenue growth of 2% (17%) to US$679m, while total gross merchandise value (GMV) grew 23% (15%), led by a strong performance from the core food-delivery business. iFood's revenue growth from its new initiatives remained meaningful at 21% (19%), even
as they took a more considered approach to growth. Overall, the trading profit margin improved 11 percentage points to 3%, and trading
profit rose 149% (US$67m) in local currency, excluding M&A to US$23m.

iFood's core food-delivery business grew revenue 17% (US$86m) in local currency, excluding M&A. It benefited from growing traction of its loyalty programme (Clube) which supports increased use from iFood's most valuable customers. Profitability grew significantly by 106% (US$57m) in local currency, excluding M&A to US$114m, driven by operational efficiencies such as lower staff costs and more targeted marketing. As a result, the core restaurant profit margin improved 12 percentage points to 19%. GMV grew by 18%, a 5 percentage point increase on the 1H23 growth of 13%, driven by 17% order growth to reach 417 million orders in 1H24, while average order value (AOV) grew by 3%. iFood continues to focus on customer acquisition and reactivating lapsed users by extending its loyalty programme's reach, improving its app's relevance, and growing its WhatsApp order service.

In 1H24, iFood's extensions revenue grew 21% (19%). The business is in an early stage but sees good opportunities in groceries and fintech leveraging its platform. iFood has adopted a more measured approach to its grocery marketplace business, targeting improved unit economics as the business reached 19 million orders. Trading losses in the groceries extensions decreased by US$16m in local currency, excluding M&A to US$43m, demonstrating an ability to grow and improve profitability at the same time.

iFood is focused on sustaining growth while continuing profitability improvements.

Delivery Hero 

Prosus holds 29.53%1 of Delivery Hero at the end of the reporting period.

Delivery Hero's GMV grew 8% in the second quarter of 2023; excluding Asia, GMV grew 18%. Revenue grew 27% to €4.8bn, ahead of peers. The business has delivered on its path to improving profitability, reporting adjusted EBITDA of €9m.

More information on Delivery Hero is available at https://ir.deliveryhero.com.

Swiggy

Prosus holds 32.7%¹ of Swiggy at the end of the reporting period. Its GMV² growth remains strong at 28% as operating metrics continue to improve, while trading losses reduced to US$208m (1H23: US$321m).

Swiggy's core food-delivery business grew 17% and delivered GMV of US$1.43bn³ in the first six months of the year. This was led by a rise
in transacting users that drove double-digit order growth and inflation in AOV. Core food-delivery EBITDA losses in 1H24 shrunk 89%, led
by improvements in contribution margin and operating leverage. In combination, this reflects customer willingness to pay for convenience
and restaurant willingness to advertise for growth.

1  Shareholding period refers to the six months ended 30 September 2023.

2  GMV is net of cancelled orders, includes rider fees. GMV growth rate is in local currency.

3  Translated at average foreign exchange rate for period April - September 2023.

The quick-commerce business made rapid strides as customer adoption drove order growth. Basket sizes grew well ahead of inflation. Instamart's store count ended June 2023 19% higher, contributing to its GMV growth of 63%. With the platform focused on gaining scale and moving towards profitability in the 25 cities where it operates, Instamart's first-half contribution losses fell by around 75%. Broader product selection, densification of the store network and faster delivery times have continued to aid customer acquisition and retention.

Economic-interest revenue for the entire Food Delivery segment grew by 28% (23%) to US$2.4bn. Trading losses reduced by US$214m in local currency, excluding M&A to US$155m. Overall profit margin improvement of 14 percentage points was driven by increased take rates and improved margins in the core restaurant food-delivery businesses.

Classifieds

OLX Europe's classifieds business remains one of the fastest-growing globally and is well placed for margin expansion.

The business delivered a strong performance, with sustained growth and significantly improved profitability.

Classifieds consolidated revenue from continuing operations grew 38% (32%) to US$342m. This was supported by the European auto verticals and OLX horizontals, which grew 46% and 30% respectively in local currency, excluding M&A. It was led by pricing benefits across categories, predominantly in Poland. Despite challenges created by the conflict in Ukraine, our business demonstrated resilience and adaptability and we have recorded a promising rebound in this region. Excluding Ukraine, revenue grew by 35% (27%). Pay-and-ship transactions grew 19%, contributing US$18m of revenue. This represents 65% revenue growth year on year, driven by increased buyer adoption and retention.

Classifieds consolidated trading profit from continuing operations more than doubled to US$94m, from US$38m in the same period last year, driven mainly by higher revenue and increased cost efficiency.

We announced the decision to exit OLX Autos in March 2023. We made significant progress in exiting several markets such as India, Indonesia, Chile and Turkey, with aggregate proceeds from concluded deals of US$181m. Markets where we could not find buyers, such as Colombia, Mexico and Argentina, have been closed and inventories across these markets liquidated without major writedowns.

The core Classifieds business is profitable, cash flow positive and fast-growing. The segment is well positioned to continue its growth and margin-expansion path, enhancing its value. Consistent with prior seasonality trends, we expect to increase our investment in marketing spend in the second half of our financial year, but with a clear focus on continued profitable growth.

On an economic-interest basis, Classifieds revenue from continuing operations grew by 27% (23%) to US$466m and more than tripled trading profits to US$110m, from US$33m.

OLX Brasil

OLX Brasil, a 50% joint venture with Adevinta, grew revenue 2% in local currency, excluding M&A, as business performance remained impacted by a weaker economic environment and a decline in advertising revenues. OLX Brasil's revenue and trading profit amounted to BRL453m (US$92m) and BRL166m (US$34m) respectively.

Payments and Fintech

The Payments and Fintech segment operates profitable core PSP businesses, and a rapidly scaling credit business in India. It delivered a strong 1H24 result in the core PSP and credit business, with revenue growth and improved profitability, despite pending regulatory approvals in India that are also impacting peer PSPs. The regulatory approvals relate to onboarding new online merchants while we continue to provide payment services to our existing online merchants. We are working closely with the relevant authorities and expect a resolution soon.

The Payments and Fintech segment grew consolidated revenue 21% (32%) to US$497m, driven by India payments, India credit, and Turkey. The consolidated trading loss narrowed by US$62m in local currency, excluding M&A to US$22m, due to improved profitability in GPO, Turkey and savings from the closure of India's LazyCard business. GPO's improvement was partly due to the once-off loss provisions of US$18m in 1H23 and operational efficiencies from headcount rationalisation.

Core PSP revenue is primarily made up of payments operations in India, GPO (Eastern Europe, Africa and Latin America), Iyzico (Turkey) and Red Dot Payments (south-east Asia). Iyzico and Red Dot Payments are accounted for in GPO. The core PSP business grew revenue by 21% (34%) to US$440m. It improved its trading profit margin to 2%, a 9 percentage point improvement from 1H23 (4 percentage point improvement, excluding the US$18m once-off loss provision in 1H23). Total payments volume (TPV) grew 18% (20%) to US$55bn, driven by India 16% (21%) and GPO, including Turkey and Red Dot Payments 21% (19%).

India is our largest market in the core PSP business, contributing around 48% of revenues. India's revenue grew 15% (20%) to US$211m, driven by growth from existing merchants, Wibmo and its omnichannel business. Trading profit is skewed to the second half due to holiday festivals, recorded a trading loss margin of 3% compared to 1% in 1H23.

In 1H24, PayU agreed to sell its GPO business, excluding Turkey and Red Dot Payments, to Rapyd, a fintech-as-a-service provider, for US$610m. After the sale, which is expected to close in the first half of calendar 2024, the core PSP business will constitute PayU India, Iyzico in Turkey and Red Dot Payments in south-east Asia. GPO is included in the results from continuing operations in 1H24. GPO, including Turkey and Red Dot Payments, grew revenue 28% (47%) to US$231m, with the trading profit margin improving significantly to 7%, from -14% in 1H23
(-4% excluding once-off loss provision in 1H23). Revenue growth and savings from cost-optimisation measures contributed to the margin improvement.

Iyzico (Turkey) grew revenue 91% (176%) to US$65m, driven by TPV growth and higher take rates. Iyzico now accounts for 15% of core PSP revenues, from 9% in 1H23. The take-rate improvement was driven by better customer and mode mix, which contributed to its trading margin improving 2 percentage points to 14%.

The credit business in India grew revenue by 23% (31%) to US$43m despite regulatory headwinds. The trading margin for India credit is seasonally stronger in the second half. During 1H24 it was impacted by regulatory uncertainty. The loss ratio was 2.5% in line with the growing loan book and remains below the industry average. India credit has a loan book of US$338m at the end of September 2023 after issuing US$362m in credit during 1H24.

On an economic-interest basis, the Payments and Fintech segment grew revenue 23% (34%) to US$591m and trading losses improved from US$97m to US$34m.

Remitly

Prosus holds 20.61% of Remitly at the end of the reporting period. Remitly, a digital remittance company, is the largest associate in the Payments and Fintech segment. In the six months ended June 2023, Remitly grew revenues by 49% to US$438m and generated US$26m
of adjusted EBITDA, a margin improvement of 12 percentage points to 6%. These strong results were driven by send-volume growth of 38%
to US$18bn.

More information on Remitly is available at  https://ir.remitly.com/.

Edtech

Edtech's revenue growth was impacted by the adoption of generative AI and macroeconomic factors. Our businesses are evolving their products to leverage this new technology and address costs.

These challenges meant that the consolidated Edtech businesses, Stack Overflow and GoodHabitz, grew revenues by 13% (11%) to US$71m, while trading losses were flat at US$66m (1H23: US$68m).

Stack Overflow's revenue grew 4% (7%) to US$47m. Teams bookings declined 3%, following a decline in small and medium-sized businesses and self-serve bookings. Annual recurring revenue grew 15% to US$58m. In response, Stack Overflow launched OverflowAI, a roadmap for integrating generative AI into its public platform, Stack Overflow for Teams, and new product areas. The business has also responded by managing costs, resulting in margins remaining in line with last year. It continues to invest in its product while prioritising a path to profitability.

GoodHabitz grew revenue at 33% (22%) to US$24m (1H23: 27%), driven by growth across its core markets, particularly in the Netherlands and Germany. Annual recurring revenue grew 30% to US$50m. Trading losses improved by US$6m in local currency, excluding M&A to US$5m on lower marketing and overhead costs.

The Edtech minority investment portfolio comprises nine investments spanning the sector, from kindergarten to grade 12 (K-12), into higher education and workplace learning. Edtech associates' revenue grew 8% in local currency, excluding M&A to US$140m and trading losses improved to US$2m, with the expectation of further improving metrics in 2H24.

On an economic-interest basis, Edtech segment revenues grew 9% in local currency, excluding M&A to US$211m and trading losses reduced
by US$24m in local currency, excluding M&A to US$64m.

Skillsoft

Prosus holds 38.18% of Skillsoft at the end of the reporting period. Skillsoft grew revenue 3% in local currency, excluding M&A, while its trading profit margin improved by 5 percentage points to 13% in the six months ending 31 July 2023. Skillsoft recorded a 1% decline in bookings, primarily from instructor-led training (down 12%), and partially offset by content and platform growth of 8%.

More information on Skillsoft is available at https://investor.skillsoft.com.

Etail

eMAG

In 1H24, eMAG's consolidated group revenue grew 10% (4%) to US$930m, driven by growth in eMAG Romania of 12% (7%). eMAG's Sameday courier business, a leading player in out-of-home deliveries, delivered revenue growth of 31% (25%) and deliveries of 32%. Its grocery-delivery business, Freshful, and food-delivery business, Tazz, made important contributions by growing 118% and 25% respectively in local currency, excluding M&A.

eMAG group's GMV grew 5%, with the marketplace (third-party or 3p) business posting double-digit year-on-year growth. GMV for the first-party (1p) business grew 1.2%, led by the Romanian business.

eMAG's trading losses improved by US$14m in local currency, excluding M&A to US$20m, and as it continued its path to profitability. eMAG Romania contributed with a trading profit of US$15m, an increase of 67% (44%) from the prior period.

On an economic-interest basis, Etail segment revenues grew 11% (4%) to US$948m. Trading losses reduced by US$14m to US$25m in local currency, excluding M&A.

Tencent

Prosus held 25% of Tencent at the end of the reporting period. For the six months ended 30 June 2023, Tencent reported revenues of RMB299.2bn, up 11% from last year. Non-IFRS profit attributable to shareholders (Tencent's measure of normalised performance) increased 31% from RMB53.7bn to RMB70.1bn.

Revenues from value-added services increased 6% to RMB153.5bn, driven by the strong performance of Goddess of Victory: Nikke, Triple Match 3D and Valorant in international games markets, increased revenues from in-game virtual item sales and music subscription services. Revenues from fintech and business services were RMB97.3bn, up 15%, driven by the recovery of commercial payment activities and an increase in live-streaming ecommerce transaction fees from video accounts. Revenues from online advertising increased 26%, driven by the addition of Video Accounts as a new advertising revenue stream, the recovery of Tencent's mobile advertising network, growth in advertising activity within mini programs and ongoing improvements in the machine-learning advertising platform.

Combined monthly active users of Weixin and WeChat grew 2% to 1.33 billion. User engagement increased. Video Account's total user time spent almost doubled year on year. Monthly active users of mini programs exceeded 1.1 billion, driven by a notable contribution from mini games.

Tencent launched the Tencent Cloud MaaS (Model-as-a-Service) library of models and solutions, leveraging its proprietary database and high-performance computing clusters. Tencent's MaaS solutions enable enterprises to develop customised large language models at higher efficiency and lower cost.

Tencent remains committed to its guiding principle of 'Value for users, tech for good' and will continue its work to promote technological innovation and contribute to the sustainable development of society.

More information on Tencent is available at www.tencent.com/en-us/investors.html.

PROSPECTS

The Group is ahead of its plan to achieve consolidated ecommerce portfolio profitability. With improved results in the current period, we expect to achieve profitability for 2H24, ahead of the prior commitment to do so in 1H25 and to grow profitability further. We will invest to enhance our ecosystems as value propositions to customers while delivering returns to our shareholders.

We remain committed to unlocking shareholder value and benefit all stakeholders. During the period, we removed the crossholding, delivering on our commitment to simplify the Group structure and continue the open-ended share repurchase programme. The latter remains a vital part of our drive to enhance shareholder returns and increase NAV per share. We endeavour to maximise shareholder value with a transparent, predictable and repeatable process of identifying, scaling and highlighting value across our portfolio at the right time.

Tencent is among the best technology companies in the world. Prosus is committed to remaining a significant shareholder in Tencent, reflecting our confidence in its leadership team to deliver value for shareholders.

Our balance sheet is strong, and our ambition remains to manage it within our investment-grade rating. While searching for new investment opportunities, we will remain disciplined.

Artificial intelligence is essential to compete. The Group hopes to capitalise on the expertise it has built over the past five years. We have embedded AI in our operations, making our capabilities available to businesses to drive increased efficiencies. AI, and now increasingly generative AI, is a significant value-creation opportunity.

Risks

While the Group focuses on growing value sustainably, we understand the importance of effective risk management and therefore continue
to improve our governance processes. This helps in setting ambitious objectives and managing related risks.

Through our organisational structures, we enable a proactive approach to risk management. Local businesses can respond quickly to unexpected opportunities as well as risks, ensuring Prosus remains resilient and well positioned for growth.

Our risk management philosophy distinguishes three categories:

·        Strategic risks and opportunities: Arising from strategic choices we make, which are continuously assessed based on risk versus reward.

·        Internal operational risks: These are managed by upholding our code of business ethics and conduct. Also by clear roles, responsibilities and policies, effective internal controls, and continuous monitoring.

·        External risks: We reduce and mitigate, inter alia, by implementing protective measures or risk-transfer arrangements.

The board oversees risks and opportunities and sets the boundaries within which those risks must be managed. Businesses keep the board updated through regular reports. Current topical risks remain:

·        Geopolitical tension and market conditions: The Ukraine and Israel-Gaza wars plus broader geopolitical tensions strain the global economy. We expect inflation and interest rates to remain elevated. In response, we maintain a disciplined approach to deploying capital. We also closely monitor our counterparty and credit risk exposures to safeguard our balance sheet.

·        Technology developments: We stay close to advances in technology. Generative AI brings both new opportunities and risks for our products, services and business models. We focus on the responsible use of data and related technologies to keep our customers safe, enhancing our cyber-resilience, detection and response capabilities and building our AI knowledge and skills.

Further details on our risk management approach and specific risks are outlined in the FY23 annual report in the 'Choosing the right opportunities and balancing risks' section. This report is available on our website.

SUSTAINABILITY

As a leading long-term technology investor, we recognise the power of technology to create solutions for some of the world's most-pressing needs. Investments we make have the potential to reduce inequalities and drive innovation. By investing in local entrepreneurs who are solving for local needs, we support economic growth in those communities. This is the most sustainable way of driving equitable access to opportunity in a society.

A major milestone was receiving the Science Based Targets initiative's (SBTi) validation of our climate targets. This is an essential step on our journey to decarbonise our business while we support a just and fair transition to a low-carbon economy aligned with the Paris Agreement. We developed targets by applying SBTi's guidance for investors, which best matches our diverse portfolio of investments.

As a global company operating in many countries, we are keenly aware of the need for urgent climate action. With most of our portfolio companies operating in countries with low historical emissions footprint¹ but most vulnerable to the impacts of global warming, it is critical to ensure a just and fair transition. Our newly published environmental sustainability programme details our targets and our climate transition plan and strategy.

Recognising the progress we made last year, we received improved scores from leading sustainability rating agencies, S&P and ISS, for our sustainability and environmental, social and governance (ESG) performance. These ratings provide an external view of our sustainability performance and help us improve our work to embed sustainability at the heart of all our businesses.

As part of our mission to use technology to improve the everyday lives of billions of people, we emphasise promoting inclusive, economically secure communities by doing what we do best - supporting promising entrepreneurs to make an impact on the communities around them. While conditions vary, local company action is key to addressing societal challenges. We are proud of the many businesses across our portfolio that are designing initiatives to meet the needs of local communities.

1  Our World in Data: historical emissions: https://ourworldindata.org/contributed-most-global-co2

DIRECTORATE

On 18 September 2023, the Group announced that Bob van Dijk stepped down as chief executive and executive director of the boards.
We thank him for his leadership. Ervin Tu has been appointed interim chief executive. Bob will assist in the transition and remains a consultant to the boards, ending his consulting arrangement on 30 September 2024.

Remuneration for directors and key management will be disclosed in the remuneration report for the year ended 31 March 2024, including Bob's remuneration. Ervin's remuneration is unchanged as a result of his interim appointment.

NOTICE FOR US SHAREHOLDERS

As Prosus' ownership in Tencent is expected to reduce below 25% before the end of the calendar year, we advise US shareholders that Prosus may be treated as a passive foreign investment company (PFIC) for US federal income tax purposes from 1 April 2024 onwards. Prosus has been monitoring its PFIC status for a while and when applying a monthly measurement period for PFIC testing we believe that Prosus should not be a PFIC for its financial year ending 31 March 2024 (FY24). It is, however, anticipated that Prosus may be a PFIC in financial years commencing 1 April 2024 (FY25). A definite conclusion cannot be drawn until the close of the financial year in question.

If Prosus is classified as a PFIC, similar to Naspers, Prosus intends to provide information that a US holder of Prosus ordinary shares N would need to make a 'qualified electing fund' (QEF) election starting from the period 1 April 2024 to 31 March 2025.

In addition, please note that it is expected that the income, which US shareholders who will make the QEF election need to include and report, should be relatively insignificant and will be lower than the PFIC income which US Naspers shareholders who have made a QEF election will
pick up.

INDEPENDENT AUDITOR'S REVIEW OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The condensed consolidated interim financial statements for the six months ended 30 September 2023 have been reviewed by Deloitte, our independent auditor, whose unmodified report is appended to these condensed consolidated interim financial statements.

RESPONSIBILITY STATEMENT ON THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

We have prepared the condensed consolidated interim financial statements of Prosus for the six months ended 30 September 2023, and the undertakings included in the consolidation taken as a whole, in accordance with IAS 34 Interim Financial Reporting.

To the best of our knowledge:

1.   The condensed consolidated interim financial statements give a true and fair view of the assets, liabilities and financial position as at

30 September 2023, and of the result of our consolidated operations for the six months ended 30 September 2023.

2.   The condensed consolidated interim financial statements for the six months ended 30 September 2023 include the information required pursuant to article 5:25d, sections 8 and 9 of the Dutch Financial Supervision Act (Wet op het Financieel Toezicht).

On behalf of the board

Koos Bekker                                                                          Ervin Tu

Chair                                                                                         Interim chief executive

Amsterdam

28 November 2023