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
CONDENSED CONSOLIDATED INCOME STATEMENT |
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Six months ended 30 September |
Year ended 31 March |
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Notes |
2023 US$'m |
2022 US$'m |
2023 US$'m |
Continuing operations |
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Revenue |
8 |
2 556 |
2 269 |
4 947 |
Cost of providing services and sale of goods |
|
(1 523) |
(1 524) |
(3 310) |
Selling, general and administration expenses |
|
(1 101) |
(828) |
(2 023) |
Other (losses)/gains - net |
10 |
(347) |
(3) |
(641) |
Operating loss |
|
(415) |
(86) |
(1 027) |
Interest income |
9 |
438 |
140 |
475 |
Interest expense |
9 |
(279) |
(277) |
(553) |
Other finance income/(costs) - net |
9 |
223 |
303 |
(55) |
Dividend income |
|
- |
61 |
61 |
Share of equity-accounted results1 |
|
1 152 |
1 059 |
5 174 |
Impairment of equity-accounted investments |
12 |
(175) |
(1 458) |
(1 742) |
Dilution (losses)/gains on equity-accounted investments |
12 |
(143) |
(95) |
(252) |
Gains on partial disposal of equity-accounted investment |
12 |
2 861 |
2 771 |
7 622 |
Net gains/(losses) on acquisitions and disposals |
10 |
7 |
136 |
54 |
Profit before taxation |
|
3 669 |
2 554 |
9 757 |
Taxation |
|
(79) |
(16) |
(42) |
Profit from continuing operations |
|
3 590 |
2 538 |
9 715 |
(Loss)/profit from discontinued operations2 |
6 |
(223) |
(22) |
307 |
Profit for the period |
|
3 367 |
2 516 |
10 022 |
Attributable to: |
|
|
|
|
Equity holders of the group |
|
3 381 |
2 535 |
10 112 |
Non-controlling interests |
|
(14) |
(19) |
(90) |
|
|
3 367 |
2 516 |
10 022 |
Per share information for the period from total operations3 |
|
|
|
|
Earnings per ordinary share N (US cents) |
|
129 |
90 |
368 |
Diluted earnings per ordinary share N (US cents) |
|
128 |
89 |
363 |
Per share information for the period from continuing operations3 |
7 |
|
|
|
Earnings per ordinary share N (US cents) |
|
137 |
91 |
357 |
Diluted earnings per ordinary share N (US cents) |
|
136 |
90 |
352 |
1 Includes equity-accounted results from associates. Refer to note 12. 2 The 30 September 2022 and 31 March 2023 amounts have been restated due to the discontinued operation of OLX Autos. Refer to note 4. 3 Earnings per share is based on the weighted average number of shares taking into account the impact of the removal of the group's cross-holding structure in the current and prior period. Refer to note 7. |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
||||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
Notes |
2023 US$'m |
Restated1 2022 US$'m |
Restated1 2023 US$'m |
Profit for the period |
|
3 367 |
2 516 |
10 022 |
Total other comprehensive loss, net of tax, for the period: |
|
(4 145) |
(7 087) |
(4 814) |
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
Translation of foreign operations2, 3 |
|
(1 844) |
(3 538) |
(2 448) |
Equity-accounted investments' foreign currency translation reserve |
|
723 |
301 |
797 |
Items that may not be subsequently reclassified to profit or loss |
|
|
|
|
Fair value losses on financial assets through other comprehensive income |
13 |
(1 292) |
(324) |
(158) |
Share of equity-accounted investments' movement in other comprehensive income1, 4 |
12 |
(1 732) |
(3 526) |
(3 005) |
|
|
|
|
|
Total comprehensive (loss)/income for the period |
|
(778) |
(4 571) |
5 208 |
Attributable to: |
|
|
|
|
Equity holders of the group |
|
(772) |
(4 541) |
5 308 |
Non-controlling interests |
|
(6) |
(30) |
(100) |
|
|
(778) |
(4 571) |
5 208 |
1 Relates to the voluntary change in accounting policy for the group's share in the changes in NAV and share-based compensation reserve of equity-accounted investments. Refer to note 4. 2 31 March 2023 includes the reclassification to the condensed consolidated income statement of US$202m relating to the disposal of Avito. Refer to note 15. 3 The significant movement relates to the translation effects from equity-accounted investments (refer to note 12). The current period also includes a net monetary gain of US$23m (2022: US$67m and 31 March 2023: US$102m) relating to hyperinflation accounting for the group's subsidiaries in Turkey. 4 This relates mainly to (losses)/gains from the changes in share prices of Tencent's listed investments carried at fair value through other comprehensive income.
|
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
||||
|
|
As at 30 September |
As at 31 March |
|
|
Notes |
2023 US$'m |
2022 US$'m |
2023 US$'m |
Assets |
|
|
|
|
Non-current assets |
|
37 626 |
42 039 |
41 707 |
Property, plant and equipment |
|
571 |
541 |
620 |
Goodwill |
11 |
1 040 |
2 336 |
1 412 |
Other intangible assets |
|
343 |
429 |
367 |
Investments in associates |
12 |
32 700 |
35 176 |
35 930 |
Investments in joint ventures |
|
66 |
107 |
69 |
Other investments and loans1 |
13 |
2 644 |
3 286 |
3 117 |
Trade and financing receivables |
|
196 |
105 |
133 |
Other receivables |
|
54 |
41 |
43 |
Deferred taxation |
|
12 |
18 |
16 |
Current assets |
|
22 452 |
20 125 |
23 371 |
Inventory |
|
269 |
390 |
324 |
Trade and financing receivables |
|
475 |
479 |
526 |
Other receivables and loans |
|
871 |
738 |
869 |
Derivative financial instruments |
|
- |
1 |
5 |
Other investments and loans1 |
13 |
3 768 |
- |
4 707 |
Short-term investments |
|
13 481 |
7 391 |
6 726 |
Cash and cash equivalents |
|
2 676 |
8 483 |
9 565 |
|
|
21 540 |
17 482 |
22 722 |
Assets classified as held for sale |
15 |
912 |
2 643 |
649 |
|
|
|
|
|
Total assets |
|
60 078 |
62 164 |
65 078 |
Equity and liabilities |
|
|
|
|
Capital and reserves attributable to the group's equity holders |
|
39 980 |
40 927 |
44 593 |
Share capital and premium |
4 |
29 138 |
39 170 |
39 186 |
Treasury shares |
|
(3 920) |
(3 491) |
(10 043) |
Other reserves |
|
(48 069) |
(48 474) |
(45 756) |
Retained earnings |
|
62 831 |
53 722 |
61 206 |
Non-controlling interests |
|
29 |
144 |
32 |
Total equity |
|
40 009 |
41 071 |
44 625 |
Non-current liabilities |
|
15 721 |
15 500 |
16 048 |
Capitalised lease liabilities |
|
139 |
147 |
150 |
Liabilities - interest bearing |
|
15 435 |
14 999 |
15 596 |
- non-interest bearing |
|
4 |
20 |
22 |
Other non-current liabilities1 |
|
17 |
146 |
140 |
Cash-settled share-based payment liabilities |
16 |
43 |
75 |
57 |
Deferred taxation |
|
83 |
113 |
83 |
Current liabilities |
|
4 348 |
5 593 |
4 405 |
Current portion of long-term debt |
|
394 |
277 |
467 |
Trade payables |
|
327 |
332 |
356 |
Accrued expenses |
|
1 489 |
1 564 |
1 802 |
Provisions |
|
63 |
9 |
45 |
Other current liabilities1 |
|
625 |
2 207 |
775 |
Cash-settled share-based payment liabilities |
16 |
570 |
648 |
656 |
Dividend payable |
|
184 |
- |
- |
Bank overdrafts |
|
15 |
31 |
28 |
|
|
3 667 |
5 068 |
4 129 |
Liabilities classified as held for sale |
15 |
681 |
525 |
276 |
|
|
|
|
|
Total equity and liabilities |
|
60 078 |
62 164 |
65 078 |
1 Non-current derivative assets have been aggregated with other investments and loans, and non-current derivative liabilities with other non-current liabilities as a result of them being immaterial. Current derivative liabilities have been aggregated with other current liabilities as a result of them being immaterial. |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
||||||||||
|
Share capital and premium ordinary shares US$'m |
Treasury shares US$'m |
Foreign currency translation reserve US$'m |
Valuation reserve US$'m |
Existing control business combination reserve US$'m |
Share- based compen- sation reserve US$'m |
Retained earnings US$'m |
Share- holders' funds US$'m |
Non- controlling interest US$'m |
Total US$'m |
Balance at 1 April 2023 |
39 186 |
(10 043) |
(1 990) |
(1 929) |
(45 681) |
3 844 |
61 206 |
44 593 |
32 |
44 625 |
Total comprehensive income for the period |
- |
- |
(1 128) |
(3 025) |
- |
- |
3 381 |
(772) |
(6) |
(778) |
Profit for the period |
- |
- |
- |
- |
- |
- |
3 381 |
3 381 |
(14) |
3 367 |
Total other comprehensive loss for the period |
- |
- |
(1 128) |
(3 025) |
- |
- |
- |
(4 153) |
8 |
(4 145) |
Movements in equity-accounted investments equity reserves and NAV1 |
- |
- |
- |
225 |
- |
399 |
- |
624 |
- |
624 |
Cancellation of treasury shares |
(10 043) |
10 043 |
- |
- |
- |
- |
- |
- |
- |
- |
Removal of the cross-holding structure2 |
- |
- |
- |
771 |
(204) |
- |
(771) |
(204) |
- |
(204) |
Derecognition of Naspers residual asset |
- |
- |
- |
771 |
(204) |
- |
(771) |
(204) |
- |
(204) |
Repurchase of own shares3 |
- |
(3 920) |
- |
- |
- |
- |
- |
(3 920) |
- |
(3 920) |
Share-based compensation movements |
- |
- |
- |
- |
- |
(54) |
(19) |
(73) |
- |
(73) |
Share-based compensation expense |
- |
- |
- |
- |
- |
74 |
- |
74 |
- |
74 |
Contributions made to Naspers share trusts |
- |
- |
- |
- |
- |
(147) |
- |
(147) |
- |
(147) |
Other share-based compensation movements |
- |
- |
- |
- |
- |
19 |
(19) |
- |
- |
- |
Direct equity movements |
(5) |
- |
- |
647 |
277 |
(142) |
(777) |
- |
- |
- |
Direct movements from associates |
- |
- |
- |
660 |
- |
- |
(660) |
- |
- |
- |
Realisation of reserves as a result of partial disposal of associates |
- |
- |
- |
(13) |
- |
(142) |
155 |
- |
- |
- |
Realisation of reserves as a result of disposals |
- |
- |
- |
- |
277 |
- |
(277) |
- |
- |
- |
Other direct movements |
(5) |
- |
- |
- |
- |
- |
5 |
- |
- |
- |
Remeasurement of written put option liabilities |
- |
- |
- |
- |
231 |
- |
- |
231 |
- |
231 |
Cancellation of written put option liabilities |
- |
- |
- |
- |
70 |
- |
(5) |
65 |
- |
65 |
Dividends payable4 |
- |
- |
- |
- |
- |
- |
(184) |
(184) |
- |
(184) |
Transactions with non-controlling shareholders |
- |
- |
- |
1 |
(382) |
1 |
- |
(380) |
3 |
(377) |
Balance at 30 September 2023 |
29 138 |
(3 920) |
(3 118) |
(3 310) |
(45 689) |
4 048 |
62 831 |
39 980 |
29 |
40 009 |
1 Relates to the impact of the voluntary change in accounting policy for the group's share in the changes in NAV and share-based compensation reserve of equity-accounted investments. Refer to note 4. 2 Relates to the removal of the group's cross-holding structure. Refer to note 4. 3 Refer to note 4 for details of the Prosus/Naspers share repurchase programme. 4 Dividends payable consist of US$79m (2023: US$83m) attributable to Naspers and US$105m (2023: US$107m) attributable to the Prosus free-float shareholders. |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY continued |
||||||||||
|
Share capital and premium ordinary shares US$'m |
Treasury shares US$'m |
Foreign currency translation reserve US$'m |
Valuation reserve US$'m |
Existing control business combination reserve US$'m |
Share- based compen- sation reserve US$'m |
Retained earnings US$'m |
Share- holders' funds US$'m |
Non- controlling interest US$'m |
Total US$'m |
Balance at 1 April 2022 |
39 190 |
(6 411) |
(358) |
65 |
(43 487) |
3 223 |
58 199 |
50 421 |
102 |
50 523 |
Total comprehensive income for the period |
- |
- |
(3 225) |
(3 851) |
- |
- |
2 535 |
(4 541) |
(30) |
(4 571) |
Profit for the period |
- |
- |
- |
- |
- |
- |
2 535 |
2 535 |
(19) |
2 516 |
Total other comprehensive loss for the period - restated1 |
- |
- |
(3 225) |
(3 851) |
- |
- |
- |
(7 076) |
(11) |
(7 087) |
Movements in equity-accounted investments equity reserves and NAV1 |
- |
- |
- |
141 |
- |
595 |
- |
736 |
2 |
738 |
Cancellation of treasury shares |
(4) |
6 411 |
- |
- |
- |
- |
(6 407) |
- |
- |
- |
Repurchase of own shares2 |
- |
(3 491) |
- |
- |
- |
- |
- |
(3 491) |
- |
(3 491) |
Acquisition of Naspers shares resulting |
- |
- |
- |
- |
(616) |
- |
- |
(616) |
- |
(616) |
Share-based compensation movements |
- |
- |
- |
- |
- |
(115) |
(8) |
(123) |
- |
(123) |
Share-based compensation expense |
- |
- |
- |
- |
- |
59 |
- |
59 |
- |
59 |
Contributions made to Naspers share trusts |
- |
- |
- |
- |
- |
(127) |
- |
(127) |
- |
(127) |
Modification of share-based compensation benefits |
- |
- |
- |
- |
- |
(13) |
9 |
(4) |
- |
(4) |
Other share-based compensation movements |
- |
- |
- |
- |
- |
(34) |
(17) |
(51) |
- |
(51) |
Direct equity movements |
(16) |
- |
- |
549 |
- |
(119) |
(414) |
- |
- |
- |
Direct movements from associates |
- |
- |
- |
344 |
- |
- |
(344) |
- |
- |
- |
Realisation of reserves as a result of partial disposal of associate |
- |
- |
- |
18 |
- |
(119) |
101 |
- |
- |
- |
Realisation of reserves as a result of disposals |
|
|
- |
187 |
- |
|
(187) |
- |
|
|
Other direct movements |
(16) |
- |
- |
- |
- |
- |
16 |
- |
- |
- |
Cancellation of written put option liabilities |
- |
- |
- |
- |
14 |
- |
- |
14 |
- |
14 |
Other movements |
- |
- |
- |
- |
- |
- |
7 |
7 |
- |
7 |
Dividends paid3 |
- |
- |
- |
- |
- |
- |
(190) |
(190) |
- |
(190) |
Transactions with non-controlling shareholders4 |
- |
- |
(6) |
- |
(1 585) |
- |
- |
(1 591) |
70 |
(1 521) |
Balance at 30 September 2022 |
39 170 |
(3 491) |
(3 589) |
(3 096) |
(45 373) |
3 584 |
53 722 |
40 927 |
144 |
41 071 |
1 Relates to the impact of the voluntary change in accounting policy for the group's share in the changes in NAV and share-based compensation reserve of equity-accounted investments. Refer to note 4. 2 Refer to note 4 for details of the Prosus/Naspers share repurchase programme. 3 Dividends paid consist of US$83m attributable to Naspers and US$107m attributable to the Prosus free-float shareholders. 4 Relates mainly to the liability recognised for the non-controlling shareholders of iFood. Refer to note 4. |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
||||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
Notes |
2023 US$'m |
2022 US$'m |
2023 US$'m |
Cash flows from operating activities |
|
|
|
|
Cash generated from/(utilised in) operating activities |
5 |
(266) |
(349) |
|
Interest income received |
|
481 |
82 |
315 |
Dividends received from equity-accounted investments |
759 |
572 |
572 |
|
Interest costs paid |
|
(291) |
(296) |
(551) |
Taxation paid |
|
(50) |
(50) |
(107) |
Net cash generated from/(utilised in) operating activities |
|
904 |
42 |
(120) |
Cash flows from investing activities |
|
|
|
|
Acquisitions and disposals of tangible and intangible assets |
|
(32) |
(140) |
(252) |
Acquisitions of subsidiaries, associates and joint ventures, net of cash |
17 |
(19) |
(81) |
(322) |
Disposals of subsidiaries, businesses, associates and joint ventures, net of cash |
17 |
4 180 |
3 777 |
12 668 |
Acquisition of short-term investments1 |
|
(13 487) |
(7 355) |
(6 605) |
Maturity of short-term investments1 |
|
6 709 |
3 924 |
3 924 |
Loans advanced to related parties |
19 |
7 |
- |
58 |
Cash paid for other investments2 |
17 |
(64) |
(130) |
(559) |
Cash received from other investments3 |
17 |
11 |
3 723 |
3 764 |
Cash movement in other investing activities |
|
(26) |
(38) |
(33) |
Net cash (utilised in)/generated from investing activities |
|
(2 721) |
3 680 |
12 643 |
Cash flows from financing activities |
|
|
|
|
Repurchase of own shares |
4 |
(4 005) |
(3 377) |
(9 901) |
Proceeds from long and short-term loans raised |
|
13 |
81 |
104 |
Repayments of long and short-term loans |
|
(22) |
(46) |
(56) |
Capital restructure as a result of the share repurchase programme |
|
- |
(615) |
(615) |
Additional investment in existing subsidiaries |
|
(371) |
(14) |
(1 606) |
Dividends and capital repayments paid to shareholders |
- |
(190) |
(191) |
|
Contributions made to the Naspers share trusts |
19 |
(147) |
(127) |
(191) |
Repayments of capitalised lease liabilities |
|
(33) |
(35) |
(51) |
Additional investment from non-controlling shareholders |
3 |
67 |
67 |
|
Cash movements in other financing activities |
|
(3) |
(9) |
(11) |
Net cash utilised in financing activities |
|
(4 565) |
(4 265) |
(12 451) |
Net movement in cash and cash equivalents |
|
(6 382) |
(543) |
72 |
Foreign exchange translation adjustments on cash and cash equivalents |
|
(114) |
(266) |
(69) |
Cash and cash equivalents at the beginning of the period |
9 537 |
9 628 |
9 628 |
|
Cash and cash equivalents classified as held for sale |
|
(380) |
(367) |
(94) |
Cash and cash equivalents at the end of the period |
2 661 |
8 452 |
9 537 |
|
1 Relates to short-term cash investments with maturities of more than three months from date of acquisition. 2 Relates to payments for the group's fair value through other comprehensive income investments. 3 Relates mainly to the group's investments measured at fair value. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the six months ended 30 September 2023
1. |
GENERAL INFORMATION |
|
Prosus N.V. (Prosus or the group) is a public company with limited liability (naamloze vennootschap) incorporated under Dutch law, with its registered head office located at Symphony Offices, Gustav Mahlerplein 5, 1082 MS Amsterdam, the Netherlands (registered in the Dutch commercial register under number 34099856). Prosus is a subsidiary of Naspers Limited (Naspers), a company incorporated in South Africa. Prosus is listed on the Euronext Amsterdam Stock Exchange, with a secondary listing on the JSE Limited's stock exchange and A2X Markets in South Africa. |
|
The Prosus group 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, food delivery, etail and education technology sectors in markets that include Europe, India and Brazil. Through its ventures team, 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. The group operates and partners with a number of leading internet businesses across the Americas, Africa, Central and Eastern Europe, and Asia in sectors including online classifieds, food delivery, payments and fintech, edtech, health, etail and social and internet platforms. |
|
The condensed consolidated interim financial statements for the six months ended 30 September 2023 were authorised for issue |
2. |
BASIS OF PRESENTATION AND ACCOUNTING POLICIES |
|
Information on the condensed consolidated interim financial statements |
|
The condensed consolidated interim financial statements for the six months ended 30 September 2023 have been prepared in accordance with and containing the information required by International Financial Reporting Standard, IAS 34 Interim Financial Reporting, as adopted by the European Union (IFRS-EU). |
|
The condensed consolidated interim financial statements do not include all the disclosures required for complete annual financial statements prepared in accordance with IFRS-EU. The accounting policies in these condensed consolidated interim financial statements are consistent with those applied in the previous consolidated annual financial statements as included in the annual report for the year ended 31 March 2023, except for the voluntary change in accounting policy for the group's share in the changes in net asset value (NAV) and share-based compensation reserve of equity-accounted investments detailed in note 4. |
|
There were no new or amended accounting pronouncements effective from 1 April 2023 that have a significant impact on the group's condensed consolidated interim financial statements. |
|
The condensed consolidated interim financial statements presented here report earnings per share, diluted earnings per share, headline earnings per share and diluted headline earnings per share (collectively referred to as earnings per share) per class of ordinary shares. These are calculated as the relationship of the number of ordinary shares (or dilutive ordinary shares where relevant) of Prosus issued at 30 September 2023 (net of treasury shares) to the relevant net profit measure attributable to the shareholders of Prosus. |
|
The earnings per share information presented takes into account the impact of the removal of the group's cross-holding structure with Naspers. |
|
All amounts disclosed are in millions of US dollars (US$'m), unless otherwise stated. |
2. |
BASIS OF PRESENTATION AND ACCOUNTING POLICIES continued |
|
Information on the condensed consolidated interim financial statements continued |
|
Operating segments |
|
The group's operating segments reflect the components of the group that are regularly reviewed by the chief operating decision-maker (CODM) as defined in note 21 'Segment information' in the consolidated financial statements as included in the annual report for the year ended 31 March 2023. |
|
In March 2023, the group announced its decision to exit the OLX Autos business unit. The exit process is being executed for each operation within the business unit in its local market. The business unit as a whole represents a separate major line of business, both in terms of the distinct nature of the business and its contribution to the operational performance of the group. As such, the operations that are disposed, classified as held for sale or closed down by 30 September 2023 have been presented as discontinued operations and are reviewed separately by the CODM. |
|
From 1 April 2022, following the operational separation from the OLX Group, the CODM reviewed the financial results of Avito separately from the Classifieds Ecommerce segment. The financial results of Avito are presented as a discontinued operation in the financial year ended 31 March 2023 in the operating segment information up until the date of disposal in October 2022. |
|
The comparative financial results of the relevant operations in the OLX Autos business described above, previously presented in the Classifieds Ecommerce segment, have been reclassified and presented in discontinued operations to allow the current performance of the business to be compared to prior periods. The change has no impact on the total group revenue, adjusted EBITDA and trading (loss)/profit in prior periods. |
|
The group proportionately consolidates its share of the results of its associates and joint ventures in its disclosure of segment results in note 5. |
|
Lag periods applied when reporting results of equity-accounted investments |
|
Where the reporting periods of associates and joint ventures (equity-accounted investments) are not coterminous with that of the group and/or it is impracticable for the relevant equity-accounted investee to prepare financial statements as of 31 March or |
|
Going concern |
|
The condensed consolidated interim financial statements are prepared on the going-concern basis. Based on forecasts and |
|
In assessing going concern, the impact of internal and external economic factors on the group's operations and liquidity was considered in preparing the forecasts and in assessing the group's actual performance against budget. The board is of the opinion that the group has sufficient financial flexibility to continue as a going concern in the year subsequent to the date of these condensed consolidated interim financial statements. |
2. |
BASIS OF PRESENTATION AND ACCOUNTING POLICIES continued |
|
Information on the condensed consolidated interim financial statements continued |
|
Hyperinflation |
|
In June 2022, the International Monetary Fund declared Turkey as a hyperinflationary economy. Accordingly, the group applied the hyperinflationary accounting requirements of IAS 29 Financial Reporting in Hyperinflationary Economies for the group's subsidiaries in Turkey. As the presentation currency of the group is that of a non-hyperinflationary economy, comparative amounts are not adjusted for changes in the price level or exchange rates in the current year. |
|
The results, cash flows and financial position for the group's subsidiaries in Turkey are adjusted using a general price index to reflect the current purchasing power at the end of the reporting period. The carrying amounts of non-monetary assets and liabilities are adjusted to reflect the change in the general price index from the date of acquisition of these subsidiaries to the end of the reporting period. The gain or loss on the net monetary position from translation of the financial information is recognised in the condensed consolidated income statement, except for goodwill, other intangible assets and deferred tax liabilities arising at acquisition of these subsidiaries. The impact of the gain on the net monetary position in the condensed consolidated income statement is not material. |
|
Goodwill, other intangible assets and deferred tax liabilities arising at acquisition of these subsidiaries are restated using the general price index at the end of the reporting period. The gain or loss on the net monetary position from the adjustment to these assets and liabilities is recognised in other comprehensive income and accumulated in the foreign currency translation reserve in equity. |
|
The general price index as published by the Turkish Statistical Institute was used in adjusting the results, cash flows and financial position for the group's subsidiaries in Turkey up to 30 September 2023. The general price inflation factor up to 30 September 2023 was 283.89%. |
3. |
REVIEW BY THE INDEPENDENT AUDITOR |
|
Deloitte replaced PwC as the group's independent auditor with effect from the 2024 financial year. |
|
These condensed consolidated interim financial statements have been reviewed by the company's external auditor, Deloitte, whose unmodified review report appears at the end of the condensed consolidated interim financial statements. |
4. |
SIGNIFICANT CHANGES IN FINANCIAL POSITION AND PERFORMANCE DURING THE REPORTING PERIOD |
|
Removal of the group's cross-holding structure |
|
On 27 June 2023, the group announced its intention to remove the cross-holding structure between Prosus and Naspers (the transaction). This transaction was completed in September 2023. The transaction aimed to address the limitation on the share repurchase programme at the Naspers level arising from the cross-holding structure and the complexity arising from the cross-holding structure. |
|
The removal of the cross-holding structure was implemented by the completion of the following key transaction steps: 1. Prosus undertook a share capitalisation issue of new ordinary shares N, ordinary shares B and ordinary shares A1. The capitalisation issue of the ordinary shares N was to Prosus' free-float shareholders. Naspers irrevocably waived its entitlement 2. Immediately prior to the Naspers capitalisation issue, the Naspers N ordinary shares held by its subsidiary MIH Treasury Services Proprietary Limited (MIH Treasury) were distributed to Naspers and were immediately cancelled. 3. Naspers undertook a capitalisation issue of new Naspers N ordinary shares and A ordinary shares. The capitalisation issue of the N ordinary shares was to Naspers' free-float shareholders. Prosus irrevocably waived its entitlement to Naspers N ordinary shares. The capitalisation issue of A ordinary shares was to the holders of the issued A ordinary shares. 4. Naspers converted its N ordinary shares and A ordinary shares from par to no par value shares. Subsequent to the capitalisation issue, Naspers facilitated the proportional share consolidation of N ordinary shares and A ordinary shares to the respective holders of these issued shares, including Prosus. 5. The share consolidation resulted in a Prosus minimal holding of Naspers N ordinary shares, which were subsequently sold on the market. |
4. |
SIGNIFICANT CHANGES IN FINANCIAL POSITION AND PERFORMANCE DURING THE REPORTING PERIOD continued |
|
Removal of the group's cross-holding structure continued |
|
The memorandum of incorporation of Naspers and the articles of association of Prosus were amended to facilitate the above transaction steps. Prior to the implementation of the above transaction, the group obtained all regulatory and shareholder approvals. |
|
Naspers' voting interest and control of Prosus is determined by the total voting rights that Naspers has in Prosus pursuant to the Prosus ordinary shares N and the Prosus ordinary shares B that it holds. The control structure of Prosus remained unchanged subsequent to the above transaction. Naspers remained the controlling shareholder of Prosus as it retained a 72.96% voting interest in Prosus. In addition, the tax status of Naspers and Prosus remained unchanged subsequent to this transaction. |
|
The cross-holding structure between Naspers and Prosus established the effective economic interest (effective interest) of the Naspers free-float shareholders in the Prosus group. Post the implementation of the above transaction, the Naspers and Prosus free-float shareholders' respective effective interest in Prosus remained similar to what it was immediately prior to the removal of this cross-holding structure. The transaction therefore allowed for the Prosus free-float shareholders to directly have an effective interest in Prosus without the complexity of the cross-holding structure. The legal ownership of Prosus is now aligned with the effective economic interests of its shareholders. |
|
The above key transaction steps happened simultaneously and in contemplation of each other. They were therefore accounted for |
|
Accounting for the removal of the group's cross-holding structure |
|
The capitalisation issue of the ordinary shares N, A1 and B to free-float shareholders is an issue of new shares in proportion to their existing shareholding for no consideration. The capitalisation issue is granted out of Prosus' capital reserves which is share premium. The shares were therefore issued at par value. The group recognised a decrease in share premium and a corresponding increase in share capital of US$243m. |
|
The removal of the cross-holding structure results in the derecognition of the Naspers residual asset and the recognition of the minimal investment in Naspers shares prior to the disposal of the shares on the market. The Naspers residual asset was initially recognised as a result of the cross-holding arrangement between Naspers and Prosus. The removal of this cross-holding structure resulted in the deemed disposal of this asset and a subsequent disposal of the Naspers N ordinary shares on the market. The group derecognised US$211m of the Naspers residual asset and recognised an investment in Naspers amounting to US$7m. The excess of the residual |
|
Post the implementation of this transaction, the Naspers and Prosus free-float effective interest in Prosus was 43.3% (31 March 2023: 43.5%) and 56.7% (31 March 2023: 56.5%) respectively. |
4. |
SIGNIFICANT CHANGES IN FINANCIAL POSITION AND PERFORMANCE DURING THE REPORTING PERIOD continued |
||||||
|
Share repurchase programme |
||||||
|
On 27 June 2022, the group announced the beginning of an open-ended, repurchase programme of the Prosus ordinary shares N and Naspers N ordinary shares. The group continued with the share repurchase programme for the six months ended 30 September 2023. |
||||||
|
The Prosus repurchase programme of its ordinary shares N continued to be funded by an orderly, on-market sale of Tencent Holdings Limited (Tencent) shares. |
||||||
|
The Naspers repurchase programme of its N ordinary shares continued to be funded by the disposal of some of the Prosus ordinary shares N that it holds. During the period, the Naspers repurchase programme was implemented by MIH Treasury up until the removal of the group's cross-holding structure. Subsequent to the removal of the cross-holding structure, the share repurchase programme was continued by Naspers and not MIH Treasury. |
||||||
|
For the six months ended 30 September 2023, Prosus repurchased 57 616 849 (2% of outstanding ordinary shares N in issue) ordinary shares N on the market for a total consideration of US$3.9bn, which was funded by the sale of 92 412 000 Tencent shares yielding proceeds of US$4.0bn. Naspers repurchased 10 310 684 (6% of outstanding N ordinary shares in issue) N ordinary shares on the market for a total consideration of US$1.8bn. |
||||||
|
This transaction was funded by the disposal of 24 358 880 Prosus ordinary shares N on the market yielding proceeds of US$1.6bn. |
||||||
|
At 31 March 2023, the Naspers and Prosus free-float shareholders' effective interest in Prosus was 56.5% and, subsequent to the removal of the cross-holding structure detailed above and the continuation of the share repurchase programme, the Naspers and Prosus free-float shareholders' effective interest in Prosus at 30 September 2023 is 56.7%. |
||||||
|
Repurchase of Prosus shares |
||||||
|
The Prosus ordinary shares N acquired by the group are classified as treasury shares. These are recognised in 'Treasury shares' on the condensed consolidated statement of financial position. The treasury shares were recognised at a cost of US$3.9bn. The group intends to cancel the Prosus shares repurchased in due course once the relevant approvals have been obtained, so as to reduce its issued share capital. |
||||||
|
Disposal of shares in Tencent |
||||||
|
The group reduced its ownership interest in Tencent from 26% to 25%, yielding US$4.0bn in proceeds. This is a partial disposal of an associate that does not result in a loss of significant influence. The group recognised a gain on partial disposal of US$2.9bn in the condensed consolidated income statement. The group reclassified a loss of US$65m from the foreign currency translation reserve to the condensed consolidated income statement related to this partial disposal. |
||||||
|
Sale of PayU GPO |
||||||
|
In August 2023, the group announced that it reached an agreement with Rapyd, a leading fintech service provider, to acquire the Global Payments Organisations (GPO) within PayU for a cash transaction worth US$610m. The transaction excludes the group's payments business in India as well as its businesses in south-east Asia - Red Dot Payment - and Turkey - Iyzico. |
||||||
|
As a result of this agreement, the group classified the GPO investments being sold as a disposal group held for sale from August 2023. The disposal group consists of the GPO businesses in Eastern Europe and Latin America. |
||||||
|
Other transactions with non-controlling shareholders |
||||||
|
In November 2022, the group acquired the remaining 33.3% stake in iFood Holdings B.V. (iFood) and IF-JE Holdings B.V., from non-controlling shareholder Just Eat Holding Limited (Just Eat) for €1.5bn in cash, plus a contingent consideration of up to a maximum of €300m at a future date. The shares were acquired from the non-controlling shareholders for the cash consideration of US$1.5bn. At 30 September 2023, the fair value to be settled in the second half of FY24 amounted to US$6m (31 March 2023: US$88m). |
||||||
|
Exit of the OLX Autos business unit |
||||||
|
In March 2023, the group announced its decision to exit the OLX Autos business unit. The OLX Autos business unit is a second-hand car-sale ecommerce platform which operates through a single technological platform located in various regions. The business unit as a whole represents a separate major line of business, both in terms of the distinct nature of the business and its contribution to the operational performance of the group. All the 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. |
||||||
|
The group recognised a US$100m impairment for the period (2022: US$nil) related primarily to goodwill that was classified as |
||||||
4. |
SIGNIFICANT CHANGES IN FINANCIAL POSITION AND PERFORMANCE DURING THE REPORTING PERIOD continued |
||||||
|
Share repurchase programme continued |
||||||
|
iFood change in revenue model |
||||||
|
From 1 April 2023, iFood - the group's food-delivery business - changed the terms and conditions for the delivery services in its logistics operation and, as a result, there was a change in its business model. This change in the business model impacts the amount of revenue recognised from 1 April 2023 as compared to the prior years. In prior years iFood controlled the food-delivery service provided to customers and recognised revenue on a gross basis as a principal. From 1 April 2023, the revenue recognised represents commissions and services fees received as a result of facilitating food-delivery services on behalf of third parties as an agent. |
||||||
|
Profit from discontinued operations |
||||||
|
Discontinued operations consist of the OLX Autos business unit. The comparative periods include the group's Russian business up until the date of disposal in October 2022. Refer to note 6 for financial information related to the group's discontinued operations. |
||||||
|
Voluntary change in accounting policy for changes in net asset value and equity reserves of equity-accounted investments |
||||||
|
Effective 1 April 2023, the group made a voluntary change to its accounting policy for the recognition of changes in the NAV and equity reserves of its equity-accounted investments. Changes in the NAV and equity reserves of equity-accounted investments are now recognised directly in equity. Previously, these changes were recognised in other comprehensive income in the condensed consolidated statement of comprehensive income and accumulated in equity in the 'Valuation reserve' due to the lack of prescriptive IFRS guidance for transactions of this nature. These changes that will now be recognised directly in equity will continue to be accumulated in the 'Valuation reserve'. |
||||||
|
Voluntary change in accounting policy for changes in net asset value and equity reserves of equity-accounted investments continued |
||||||
|
The group considers that the voluntary change in the accounting policy will provide more relevant and reliable information about the effects of underlying transactions with equity-accounted investments as these changes impact their equity and have no impact on the equity-accounted investments' other comprehensive income. |
||||||
|
The group has adopted this change in accounting policy retrospectively. The change has no impact on the group's equity or 'Valuation reserve' as the amounts previously recognised in the condensed consolidated statement of comprehensive income |
||||||
|
Below is a summary of the impact of the change in accounting policy on the condensed consolidated statement of comprehensive income: |
||||||
|
|
Six months ended 30 September 2022 |
Year ended 31 March 2023 |
||||
|
|
Previously reported US$'m |
Change in accounting policy1 US$'m |
Restated US$'m |
Previously reported US$'m |
Change in accounting policy1 US$'m |
Restated US$'m |
|
Share of equity-accounted investments' movement in other comprehensive income and NAV |
(2 788) |
(738) |
(3 526) |
(1 741) |
(1 264) |
(3 005) |
|
Total comprehensive (loss)/income for the period |
(3 833) |
(738) |
(4 571) |
6 472 |
(1 264) |
5 208 |
|
Attributable to: |
|
|
|
|
|
|
|
Equity holders of the group |
(3 805) |
(736) |
(4 541) |
6 570 |
(1 262) |
5 308 |
|
Non-controlling interests |
(28) |
(2) |
(30) |
(98) |
(2) |
(100) |
|
|
(3 833) |
(738) |
(4 571) |
6 472 |
(1 264) |
5 208 |
|
1 Represents the impact of the voluntary change in accounting policy for changes in the NAV and equity reserves of the group's equity-accounted investments. |
5. |
SEGMENTAL REVIEW |
|||
|
Reconciliation of consolidated cash utilised in operating activities, adjusted EBITDA and trading loss to consolidated operating loss from continuing operations |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Cash generated from/(utilised in) operating activities |
5 |
(266) |
(349) |
|
Non-cash adjustments |
(171) |
(130) |
(295) |
|
Working capital outflow |
33 |
200 |
178 |
|
Operating cash flows of discontinued operations, net of adjustments for non-cash and other items |
76 |
(95) |
(14) |
|
Consolidated adjusted EBITDA from continuing operations1 |
(57) |
(291) |
(480) |
|
Depreciation |
(44) |
(40) |
(90) |
|
Amortisation of software |
(6) |
(5) |
(11) |
|
Interest on capitalised lease liabilities |
(3) |
(2) |
(5) |
|
Consolidated trading loss from continuing operations2 |
(110) |
(338) |
(586) |
|
Interest on capitalised lease liabilities |
3 |
2 |
5 |
|
Interest paid on merchant payables |
- |
- |
- |
|
Amortisation of other intangible assets |
(36) |
(36) |
(68) |
|
Other (losses)/gains - net |
(347) |
(3) |
(641) |
|
Retention option expense |
61 |
15 |
(20) |
|
Other |
- |
4 |
7 |
|
Remeasurement of cash-settled share-based incentives expenses |
16 |
273 |
285 |
|
Share-based incentives for share options settled in Naspers shares3 |
(2) |
(3) |
(9) |
|
Consolidated operating loss from continuing operations |
(415) |
(86) |
(1 027) |
|
1 Adjusted EBITDA is a non-IFRS measure that represents operating profit/loss, as adjusted, to exclude: depreciation; amortisation; retention option expenses linked to business combinations; other losses/gains - net, which includes dividends received from investments, profits and losses on sale of assets, fair value adjustments of financial instruments and impairment losses. For share-based compensation expenses (SAR, RSU and PSU), adjusted EBITDA includes the grant date fair value of these expenses, however, excludes expenses deemed to arise from shareholder transactions by virtue of employment; subsequent fair value remeasurement of cash-settled share-based compensation expenses (SAR); equity-settled share-based compensation expenses for group share option schemes; and those deemed to arise on shareholder transactions, except where the group has a cash cost on settlement with participants. It is considered a useful measure to analyse operational profitability. 2 Trading profit/(loss) is a non-IFRS measure that refers to adjusted EBITDA adjusted for depreciation, amortisation of software and interest on capitalised lease liabilities. It is considered a useful measure to analyse operational profitability. 3 Refers to share-based incentives settled in equity instruments of the Naspers group, where the Prosus group has no obligation to settle the awards with participants, ie they are settled by Naspers. |
5. |
SEGMENTAL REVIEW continued |
||||
|
|
Revenue |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
||
|
|
2023 US$'m |
2022 US$'m |
% change |
2023 US$'m |
|
Continuing operations |
|
|
|
|
|
Ecommerce |
4 939 |
4 246 |
16 |
9 124 |
|
Classifieds1, 2 |
466 |
368 |
27 |
755 |
|
Food Delivery3 |
2 444 |
1 911 |
28 |
4 203 |
|
Payments and Fintech |
591 |
480 |
23 |
1 052 |
|
Edtech |
211 |
334 |
(37) |
545 |
|
Etail |
948 |
852 |
11 |
1 953 |
|
Other |
279 |
301 |
(7) |
616 |
|
Social and internet platforms |
10 675 |
11 309 |
(6) |
22 269 |
|
Tencent |
10 675 |
11 309 |
(6) |
22 269 |
|
Corporate segment |
- |
- |
- |
- |
|
Total economic interest from continuing operations |
15 614 |
15 555 |
- |
31 393 |
|
Less: Equity-accounted investments |
(13 058) |
(13 286) |
(2) |
(26 446) |
|
Total consolidated from continuing operations |
2 556 |
2 269 |
13 |
4 947 |
|
Total from discontinued operations1, 2 |
618 |
1 511 |
(59) |
2 444 |
|
Total consolidated |
3 174 |
3 780 |
(16) |
7 391 |
|
1 From 1 April 2022, following the separation from the OLX Group, the CODM reviewed the financial results of Avito separately. Subsequent to the group's decision to exit this Russian business, Avito was presented as a discontinued operation up until the date of disposal. The comparative financial results of Avito, previously presented in the Classifieds Ecommerce segment, have been reclassified and presented in discontinued operations. 2 From 1 March 2023, following the group's decision to exit the OLX Autos business unit, its operations disposed, classified as held for sale or closed down by 3 From 1 April 2023, iFood changed its revenue recognition from a gross basis to a net basis as a result to a change in the services rendered to its customers. Refer to note 4. |
5. |
SEGMENTAL REVIEW continued |
||||
|
|
Adjusted EBITDA |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
||
|
|
2023 US$'m |
2022 US$'m |
% change |
2023 US$'m |
|
Continuing operations |
|
|
|
|
|
Ecommerce |
(117) |
(700) |
(83) |
(1 082) |
|
Classifieds1, 2 |
122 |
46 |
>100 |
74 |
|
Food Delivery3 |
(86) |
(333) |
74 |
(545) |
|
Payments and Fintech |
(28) |
(93) |
70 |
(108) |
|
Edtech |
(58) |
(167) |
65 |
(239) |
|
Etail |
3 |
(14) |
121 |
(10) |
|
Other |
(70) |
(139) |
50 |
(254) |
|
Social and internet platforms |
3 374 |
3 142 |
7 |
6 295 |
|
Tencent |
3 374 |
3 142 |
7 |
6 295 |
|
Corporate segment |
(71) |
(78) |
9 |
(166) |
|
Total economic interest from continuing operations |
3 186 |
2 364 |
35 |
5 047 |
|
Less: Equity-accounted investments |
(3 243) |
(2 655) |
22 |
(5 527) |
|
Total consolidated from continuing operations |
(57) |
(291) |
80 |
(480) |
|
Total from discontinued operations1, 2 |
(109) |
40 |
>(100) |
(142) |
|
Total consolidated |
(166) |
(251) |
34 |
(622) |
|
1 From 1 April 2022, following the separation from the OLX Group, the CODM reviewed the financial results of Avito separately. Subsequent to the group's decision to exit this Russian business, Avito was presented as a discontinued operation up until the date of disposal. The comparative financial results of Avito, previously presented in the Classifieds Ecommerce segment, have been reclassified and presented in discontinued operations. 2 From 1 March 2023, following the group's decision to exit the OLX Autos business unit, its operations disposed, classified as held for sale or closed down by 3 From 1 April 2023, iFood changed its revenue recognition from a gross basis to a net basis as a result to a change in the services rendered to its customers. Refer to note 4. |
5. |
SEGMENTAL REVIEW continued |
|
|||
|
|
Trading (loss)/profit |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
||
|
|
2023 US$'m |
2022 US$'m |
% change |
2023 US$'m |
|
Continuing operations |
|
|
|
|
|
Ecommerce |
(246) |
(805) |
69 |
(1 306) |
|
Classifieds1, 2 |
110 |
33 |
>100 |
47 |
|
Food Delivery3 |
(155) |
(381) |
59 |
(649) |
|
Payments and Fintech |
(34) |
(97) |
65 |
(116) |
|
Edtech |
(64) |
(178) |
64 |
(258) |
|
Etail |
(25) |
(38) |
34 |
(63) |
|
Other |
(78) |
(144) |
46 |
(267) |
|
Social and internet platforms |
2 875 |
2 497 |
15 |
5 085 |
|
Tencent |
2 875 |
2 497 |
15 |
5 085 |
|
Corporate segment |
(74) |
(82) |
10 |
(173) |
|
Total economic interest from continuing operations |
2 555 |
1 610 |
59 |
3 606 |
|
Less: Equity-accounted investments |
(2 665) |
(1 948) |
37 |
(4 192) |
|
Total consolidated from continuing operations |
(110) |
(338) |
67 |
(586) |
|
Total from discontinued operations1, 2 |
(115) |
17 |
>(100) |
(178) |
|
Total consolidated |
(225) |
(321) |
30 |
(764) |
|
1 From 1 April 2022, following the separation from the OLX Group, the CODM reviewed the financial results of Avito separately. Subsequent to the group's decision to exit this Russian business, Avito was presented as a discontinued operation up until the date of disposal. The comparative financial results of Avito, previously presented in the Classifieds Ecommerce segment, have been reclassified and presented in discontinued operations. 2 From 1 March 2023, following the group's decision to exit the OLX Autos business unit, its operations disposed, classified as held for sale or closed down by 3 From 1 April 2023, iFood changed its revenue recognition from a gross basis to a net basis as a result to a change in the services rendered to its customers. Refer to note 4. |
6. |
PROFIT FROM DISCONTINUED OPERATIONS |
|||
|
Discontinued operations in the current and prior period relate to the OLX Autos business unit. The prior year also includes the financial performance of Avito up until the date of disposal in October 2022. |
|||
|
Discontinued operations for the OLX Autos business include the operations disposed, classified as held for sale or closed down by |
|||
|
The financial information relating to the group's discontinued operations is set out below: |
|||
|
Income statement information of discontinued operations |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Revenue from contracts with customers |
618 |
1 511 |
2 444 |
|
Online sale of goods revenue |
605 |
950 |
1 759 |
|
Classifieds listings revenue |
7 |
497 |
602 |
|
Advertising revenue |
2 |
41 |
52 |
|
Other revenue |
4 |
23 |
31 |
|
Expenses |
(846) |
(1 492) |
(2 660) |
|
Impairment of goodwill and other assets1 |
(102) |
(5) |
(125) |
|
Other expenses |
(744) |
(1 487) |
(2 535) |
|
|
|
|
|
|
(Loss)/profit before tax |
(228) |
19 |
(216) |
|
Taxation |
(4) |
(41) |
(45) |
|
Loss for the period |
(232) |
(22) |
(261) |
|
Gain on disposal of discontinued operation |
9 |
- |
568 |
|
(Loss)/profit from discontinued operations |
(223) |
(22) |
307 |
|
(Loss)/profit from discontinued operations attributable to: |
|
|
|
|
Equity holders of the group |
(222) |
(21) |
303 |
|
Non-controlling interest |
(1) |
(1) |
4 |
|
|
(223) |
(22) |
307 |
|
1 Relates to impairment losses of goodwill and other assets in the OLX Autos business unit. |
|||
|
Cash flow statement information of discontinued operations |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Net cash (utilised in)/generated from operating activities |
(22) |
95 |
42 |
|
Net cash generated from/(utilised in) investing activities |
136 |
(48) |
1 981 |
|
Net cash (utilised in)/generated from financing activities |
(162) |
182 |
270 |
|
Cash (utilised in)/generated from discontinued operations |
(48) |
229 |
2 293 |
|
Per share information from discontinued operations1 |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Earnings per ordinary share N |
(8) |
(1) |
11 |
|
Diluted earnings per ordinary share N |
(8) |
(1) |
11 |
|
Headline earnings per ordinary share N |
(5) |
- |
(5) |
|
Diluted headline earnings per ordinary share N |
(5) |
- |
(5) |
|
1 Refer to note 7 for further details on earnings per share from discontinued operations. |
7. |
EARNINGS PER SHARE |
|||
|
Calculation of headline earnings |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Earnings from continuing operations |
|
|
|
|
Basic earnings attributable to shareholders |
3 603 |
2 556 |
9 809 |
|
Impact of dilutive instruments of subsidiaries, associates and joint ventures |
(26) |
(33) |
(116) |
|
Diluted earnings attributable to shareholders |
3 577 |
2 523 |
9 693 |
|
Headline adjustments for continuing operations |
|
|
|
|
Adjusted for: |
(2 194) |
(2 357) |
(8 949) |
|
Impairment of other assets |
- |
- |
33 |
|
Impairment of goodwill, plant and equipment, and other intangible assets |
341 |
10 |
612 |
|
Loss on sale of assets |
4 |
- |
4 |
|
Gain recognised on loss of control |
- |
(23) |
(23) |
|
Gain recognised on loss of significant influence |
- |
(99) |
(30) |
|
Gain on remeasurement of previously held interest |
(10) |
- |
- |
|
Net gains on acquisitions and disposals of investments |
- |
(25) |
(30) |
|
Gain on partial disposal of equity-accounted investments |
(2 861) |
(2 771) |
(7 622) |
|
Dilution losses on equity-accounted investments |
143 |
95 |
252 |
|
Remeasurements included in equity-accounted earnings1 |
14 |
(1 002) |
(3 887) |
|
Impairment of equity-accounted investments |
175 |
1 458 |
1 742 |
|
|
|
|
|
|
|
1 409 |
199 |
860 |
|
Total tax effects of adjustments |
- |
- |
- |
|
Total adjustment for non-controlling interest |
- |
1 |
(104) |
|
Basic headline earnings from continuing operations2 |
1 409 |
200 |
756 |
|
Diluted headline earnings from continuing operations |
1 383 |
167 |
640 |
|
1 Remeasurements included in equity-accounted earnings include US$14m (2022: US$1.8bn and 31 March 2023: US$5.9bn) relating to gains arising on acquisitions and disposals by associates and US$25m relating to net impairments of assets recognised by associates (2022: impairment of US$783m and 2 Headline earnings represent net profit for the year attributable to equity holders of the group, excluding certain defined, separately identifiable remeasurements. The headline earnings measure is pursuant to the JSE Listings Requirements calculated in terms of the SAICA guide of Circular 1/2023. |
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Earnings from discontinued operations |
|
|
|
|
Basic earnings attributable to shareholders |
(222) |
(21) |
303 |
|
Diluted earnings attributable to shareholders |
(222) |
(21) |
303 |
|
Headline adjustments for discontinued operations1 |
|
|
|
|
Adjusted for: |
94 |
8 |
(437) |
|
Loss on sale of property, plant and equipment and other intangible assets |
1 |
3 |
6 |
|
Impairment of goodwill, intangible assets and other assets |
102 |
5 |
125 |
|
Net gains on acquisitions and disposals of investments |
(9) |
- |
(568) |
|
|
|
|
|
|
|
(128) |
(13) |
(134) |
|
Total adjustment for non-controlling interest |
- |
- |
6 |
|
Basic headline earnings from discontinued operations1 |
(128) |
(13) |
(128) |
|
Diluted headline earnings from discontinued operations |
(128) |
(13) |
(128) |
|
1 Headline earnings represent net profit for the year attributable to equity holders of the group, excluding certain defined, separately identifiable remeasurements. The headline earnings measure is pursuant to the JSE Listings Requirements. |
7. |
EARNINGS PER SHARE continued |
|
Earnings per share information |
|
The earnings per share represent the economic interest per share, taking into account the impact of the cross-holding structure between Prosus and Naspers up until the date of its removal in September 2023 (refer to note 4). |
|
The cross-holding agreement dealt with how distributions by Prosus will be attributed to its N ordinary shareholders. Under the cross-holding agreement, Naspers had waived its entitlement to any distributions from Prosus for a calculated number of the ordinary shares N it holds in Prosus, as these represented the portion of the ordinary shares N that Prosus indirectly owns in itself by virtue of its interest in Naspers. These ordinary shares N (cross-holding ordinary shares N) were excluded from the earnings per share calculation, as they contractually do not have an economic interest in the earnings of the group. These cross-holding ordinary shares N were excluded from the earnings per share calculation as they were considered N non-participating shares. The removal of the cross-holding agreement allowed for these ordinary shares N held by Naspers to now have economic interest in the earnings of the group and become participating shares like the rest of the ordinary shares N in issue. |
|
The inclusion of the cross-holding ordinary shares N in the earnings per share calculation was for no consideration and had no change to the resources of the group. In addition, as part of the removal of the cross-holding transaction, the share capitalisation in the current period was for no consideration. |
|
The cross-holding ordinary shares N (which become participating shares upon removal of the cross-holding agreement) and the newly issued shares (as a result of the capitalisation issue) are included in the weighted average number of shares outstanding from 1 April 2022 in accordance with IFRS to allow for a like-for-like comparison. This therefore restates the FY23 earnings per share because the removal of the cross-holding changes the issued and participating ordinary shares N of the group with no change in resources of the group or economic benefits for the shareholders. |
|
In addition to the above transaction and the group's open-ended share repurchase programme, the number of ordinary shares N used in the earnings per share information is weighted for the period that the shares were in issue and not recognised as treasury shares. Refer to note 4 for the impact of the share repurchase programme. |
|
The A and B ordinary shareholders are entitled to one voting right per share. The A ordinary shareholders are entitled to one-fifth of the economic rights attributable to the Prosus free-float shareholders. The B ordinary shareholders are entitled to one-millionth of the economic rights of the Prosus ordinary shares N. |
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Earnings attributable to shareholders from continuing operations |
3 603 |
2 556 |
9 809 |
|
Headline earnings from continuing operations |
1 409 |
200 |
756 |
7. |
EARNINGS PER SHARE continued |
|||
|
Earnings per share information continued |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
|
Number of participating ordinary shares N ('000) |
Number of participating ordinary shares N ('000) |
Number of participating ordinary shares N ('000) |
|
Issued shares |
|
|
|
|
Net number of shares in issue at period-end (net of treasury shares) |
2 601 937 |
1 949 826 |
1 851 021 |
|
Cross-holding ordinary shares N |
- |
(596 010) |
(596 444) |
|
Net number of shares at period-end |
2 601 937 |
1 353 816 |
1 254 577 |
|
Weighted average number of ordinary shares |
|
|
|
|
Issued net of treasury shares at the beginning of the period |
1 254 576 |
1 419 444 |
1 419 444 |
|
Capitalisation issue1 |
808 533 |
808 533 |
808 533 |
|
Weighting of share repurchase |
(25 000) |
(11 203) |
(54 342) |
|
Weighting of cross-holding ordinary shares N |
(1 953) |
(3 519) |
(7 734) |
|
Removal of cross-holding arrangement1 |
596 444 |
584 373 |
584 373 |
|
Weighted average number of shares in issue during the period2 |
2 632 600 |
2 797 628 |
2 750 274 |
|
Adjusted for the effect of future share-based payment transactions |
- |
- |
- |
|
Diluted weighted average number of shares in issue during the period |
2 632 600 |
2 797 628 |
2 750 274 |
|
Per share information from continuing operations for the period3 |
|
|
|
|
Earnings per ordinary share N (US cents) |
137 |
91 |
357 |
|
Diluted earnings per ordinary share N (US cents) |
136 |
90 |
352 |
|
Headline earnings per ordinary share N (US cents) |
54 |
7 |
27 |
|
Diluted headline earnings per ordinary share N (US cents) |
53 |
6 |
23 |
|
1 The capitalisation issue and removal of the cross-holding ordinary shares N are included in the weighted average number of shares from 1 April 2022. 2 The weighted average number of shares excludes the shares repurchased as part of the share repurchase programme from the date they are recognised as treasury shares. Refer to note 4. 3 Total earnings per share for A ordinary shareholders amounts to 15 US cents (2022: 11 US cents and 31 March 2023: 44 US cents) and B ordinary shareholders amounts to nil US cents. Earnings per share for A ordinary shareholders from continuing operations amounts to 16 US cents (2022: 11 US cents and 31 March 2023: 42 US cents) and B ordinary shareholders amounts to nil US cents for all periods. |
8. |
Revenue |
||||
|
|
Reportable segment(s) where revenue is included |
Six months ended 30 September |
Year ended 31 March |
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|||
|
From continuing operations |
|
|
|
|
|
Online sale of goods revenue |
Classifieds and Etail |
900 |
825 |
1 879 |
|
Classifieds listings revenue |
Classifieds |
285 |
208 |
435 |
|
Payment transaction commissions and fees1 |
Various |
556 |
447 |
987 |
|
Mobile and other content revenue |
Other Ecommerce |
22 |
26 |
51 |
|
Food-delivery revenue |
Food Delivery |
679 |
661 |
1 367 |
|
Advertising revenue |
Various |
18 |
14 |
30 |
|
Educational technology revenue |
Edtech |
71 |
63 |
134 |
|
Other revenue |
Various |
25 |
25 |
64 |
|
|
|
2 556 |
2 269 |
4 947 |
|
1 This revenue is generated primarily from the Payments and Fintech segment and includes interest income revenue relating to the group's credit business across various segments. |
||||
|
Revenue in the table above relates to revenue from contracts with customers, except for interest income revenue of US$56m |
||||
|
Revenue is presented on an economic-interest basis (ie, including the proportionate consolidation of the revenue of associates and joint ventures) in the group's segmental review and is, accordingly, not directly comparable to the above consolidated revenue figures. Below is the group's revenue by geographical area: |
||||
|
|
Six months ended 30 September |
Year ended 31 March |
||
|
Geographical area |
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
|
Asia |
276 |
242 |
526 |
|
|
Europe |
1 381 |
1 158 |
2 615 |
|
|
Central Europe |
354 |
297 |
641 |
|
|
Eastern Europe |
989 |
815 |
1 912 |
|
|
Western Europe |
38 |
46 |
62 |
|
|
Latin America |
827 |
803 |
1 651 |
|
|
North America |
38 |
32 |
87 |
|
|
Other |
34 |
34 |
68 |
|
|
Total |
2 556 |
2 269 |
4 947 |
9. |
FINANCE (COSTS)/INCOME |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Interest income |
438 |
140 |
475 |
|
Loans and bank accounts1 |
437 |
139 |
473 |
|
Other |
1 |
1 |
2 |
|
Interest expense |
(279) |
(277) |
(553) |
|
Loans and overdrafts |
(261) |
(255) |
(512) |
|
Capitalised lease liabilities |
(3) |
(2) |
(5) |
|
Other |
(15) |
(20) |
(36) |
|
Other finance income/(costs) - net |
223 |
303 |
(55) |
|
Gains/(losses) on translation of assets and liabilities |
76 |
326 |
26 |
|
Gains/(losses) on derivative and other financial instruments |
147 |
(23) |
(81) |
|
|
|
|
|
|
1 The increase in the current year relates primarily to increased cash and short-term investments. |
10. |
PROFIT BEFORE TAXATION |
|||
|
In addition to the items already detailed, profit before taxation from continuing operations has been determined after taking into account, inter alia, the following: |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Depreciation of property, plant and equipment |
44 |
40 |
90 |
|
Amortisation |
42 |
41 |
79 |
|
Software |
6 |
5 |
11 |
|
Other intangible assets |
36 |
36 |
68 |
|
Impairment losses on financial assets measured at amortised cost |
6 |
2 |
14 |
|
Net realisable value adjustments on inventory, net of reversals1 |
(8) |
(7) |
4 |
|
Other (losses)/gains - net |
(347) |
(3) |
(641) |
|
Loss on sale of assets |
(4) |
- |
(4) |
|
Impairment of goodwill, property, plant and equipment and other intangible assets |
(341) |
(9) |
(612) |
|
Impairment of other assets |
- |
- |
(33) |
|
Income on business support services |
- |
7 |
8 |
|
Other |
(2) |
(1) |
- |
|
Net gains/(losses) on acquisitions and disposals |
7 |
136 |
54 |
|
Gains/(losses) on disposal of investments - net |
- |
25 |
30 |
|
Gains on loss of control transactions |
- |
23 |
23 |
|
Loss recognised on sale of business - net |
- |
- |
- |
|
Gains/(losses) recognised on loss of significant influence |
- |
99 |
30 |
|
Remeasurement of contingent consideration |
5 |
- |
1 |
|
Transaction-related costs |
(8) |
(11) |
(31) |
|
Remeasurement of previously held interest |
10 |
- |
- |
|
Other |
- |
- |
1 |
|
|
|
|
|
|
1 Net realisable value writedowns relate primarily to the Etail segment. |
11. |
GOODWILL |
|||||
|
Movements in the group's goodwill for the period are detailed below: |
|||||
|
|
Six months ended 30 September |
Year ended 31 March |
|||
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
||
|
Goodwill |
|
|
|
||
|
Cost |
2 383 |
3 727 |
3 727 |
||
|
Accumulated impairment |
(971) |
(355) |
(355) |
||
|
Opening balance |
1 412 |
3 372 |
3 372 |
||
|
Foreign currency translation effects1 |
(17) |
357 |
372 |
||
|
Acquisitions of subsidiaries and businesses |
38 |
11 |
11 |
||
|
Disposals of subsidiaries and businesses |
- |
(10) |
(10) |
||
|
Transferred to assets classified as held for sale2 |
(53) |
(1 388) |
(1 649) |
||
|
Impairment |
(340) |
(6) |
(684) |
||
|
Closing balance |
1 040 |
2 336 |
1 412 |
||
|
Cost |
2 325 |
2 683 |
2 383 |
||
|
Accumulated impairment |
(1 285) |
(347) |
(971) |
||
|
1 The current period includes a net monetary gain of US$21m (2022: US$71m and 31 March 2023: US$95m) relating to hyperinflation accounting for the group's subsidiaries in Turkey. Refer to note 2. 2 The current period primarily relates to PayU GPO which was classified as held for sale in August 2023. The prior year relates to Avito and the OLX Autos operations classified in that year. Refer to note 15. |
|||||
|
Goodwill is tested annually at 31 December or more frequently if there is a change in circumstances that indicates that it might be impaired. The group has allocated goodwill to various cash-generating units (CGUs). The recoverable amounts of these CGUs have been determined based on the higher of the value-in-use calculations and the fair value less costs of disposal. During the current period and prior financial year, the recoverable amounts for CGUs were determined predominantly using value-in-use calculations. Value-in-use is based on discounted cash flow calculations. These cash flow calculations are based on 10-year forecast information as many businesses have monetisation timelines longer than five years. |
|||||
|
For the six months ended 30 September 2023, the group considered whether there was a change in circumstances that indicated that a CGU might be impaired. The impairment assessment took into consideration the increase in market interest rates and country risk premiums and the overall business performance compared against budgets and forecasts. Based on the above indicators an impairment test was performed for Stack Overflow in the Edtech segment, primarily as a result of a decline in the business performance in a challenging macroeconomic environment. The value-in-use calculation was based on 10-year budgeted and forecast cash flow information approved by senior management. The 10-year budgets and forecasts consisted of cash flow projections including macroeconomic factors and trends. |
|||||
|
The carrying amount of goodwill tested for impairment was US$653m. The inputs used in the value-in-use calculation are as follows:
|
|||||
|
|
Six months ended 30 September |
Year ended 31 March |
|||
|
|
2023 % |
2023 % |
|||
|
Pre-tax discount rate |
18.9 |
15.4 |
|||
|
Post-tax discount rate |
16.5 |
13.5 |
|||
|
Growth rate used in extrapolation of cash flows |
3.0 |
2.3 |
|||
|
Average revenue growth rate |
3.6 - 36.5 |
22.9 - 36.9 |
|||
|
The calculation of value-in-use is most sensitive to the following assumptions: · projected revenue and EBITDA growth rates; · growth rates used to extrapolate cash flows beyond the budget and forecast period, including the terminal growth rate applied in the final projection year; and · discount rates. |
|||||
|
The group recognised impairment losses on goodwill of US$340m (2022: US$6m and 31 March 2023: US$684m). The impairment in the current period related to Stack Overflow. The prior year impairment loss related primarily to Stack Overflow (US$560m) and the OLX Autos business unit (US$116m). An adverse adjustment to any of the above key assumptions used in the value-in-use calculations would result in additional impairment losses being recognised on Stack Overflow in the current period. |
|||||
12. |
INVESTMENTS IN ASSOCIATES |
|||
|
The movements in the carrying value of the group's investments in associates are detailed in the table below: |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Opening balance |
35 930 |
44 457 |
44 457 |
|
Associates acquired - gross consideration |
35 |
150 |
769 |
|
Associates disposed of |
- |
- |
(1) |
|
Associates transferred to held for sale |
(8) |
(5) |
(5) |
|
Share of changes in other comprehensive income and NAV |
(1 108) |
(2 788) |
(1 741) |
|
Share of equity-accounted results |
1 155 |
1 081 |
5 321 |
|
Impairment |
(175) |
(1 458) |
(1 725) |
|
Dividends received1 |
(759) |
(565) |
(5 089) |
|
Foreign currency translation effects |
(1 162) |
(3 959) |
(2 122) |
|
Loss of significant influence |
(9) |
(630) |
(743) |
|
Partial disposal of interest in associate2 |
(1 056) |
(1 009) |
(2 930) |
|
Dilution (losses)/gains3 |
(143) |
(98) |
(261) |
|
Closing balance |
32 700 |
35 176 |
35 930 |
|
1 In the current year, the dividend received from Tencent amounted to a cash dividend of US$759m (31 March 2023: US$565m cash dividend and dividend in specie of US$4.5bn in Meituan shares). 2 The gains on partial disposal recognised in the condensed consolidated income statement relate to the partial disposal of Tencent. The group recognised a gain on partial disposal of US$2.9bn (2022: US$2.8bn and 31 March 2023: US$7.6bn). 3 The total dilution (losses)/gains presented in the condensed consolidated interim income statement relate to the group's diluted effective interest in associates and the reclassification of a portion of the group's foreign currency translation reserves from the condensed consolidated statement of other comprehensive income to the condensed consolidated income statement following the shareholding dilutions. |
|||
|
Impairment of equity-accounted investments |
|
|
|
|
The group assesses whether there is an indication that its equity-accounted investments are impaired. When an impairment indicator is identified, the group performs an impairment assessment. Impairment losses are recognised for equity-accounted investments when the carrying amount exceeds the recoverable amount of an investment. The recoverable amounts of equity-accounted investments are determined based on the higher of the value-in-use calculations and the fair value less costs of disposal. |
|||
|
For the six months ended 30 September 2023, the impairment assessment took into consideration the market capitalisation of the listed equity-accounted investments, the increase in market interest rates and country risk premiums and the business's overall performance compared against budgets and forecasts. |
|||
|
Impairment indicator assessments were performed for the group's listed equity-accounted investments - Delivery Hero and Skillsoft - as a result of a decline in the market capitalisation. |
|||
|
Management assessed the investment in Delivery Hero for potential impairment indicators, which included taking into account market price movements, analyst consensus forecasts, actual company performance as well as company guidance issued. Management concluded that no further impairment testing was required. |
|||
|
The recoverable amount for Skillsoft was determined based on the market price at 30 September 2023. The market price is considered a more supportable representation of the recoverable amount for this investment due to the consistent decline in the share price over time. Accordingly, Skillsoft was impaired to its market value at 30 September 2023. The market price of Skillsoft is level 1 on the fair value hierarchy. |
|||
|
Impairment indicator assessments for the group's unlisted equity-accounted investments related primarily to investments in the Prosus Ventures portfolio reported in the Other Ecommerce segment. The impairment indicator assessment was as a result of a decrease in the enterprise value used in a capital raise transaction. |
|||
|
For the six months ended 30 September 2023, an impairment loss of US$175m (2022: US$1.5bn and 31 March 2023: US$1.7bn) was recognised for equity-accounted investments of which US$42m related to Skillsoft (2022: US$204m and 31 March 2023: US$301m) in the Edtech segment and US$133m related primarily to unlisted equity-accounted investments in the Prosus Ventures portfolio reported in the Other Ecommerce segment. |
|||
|
At 30 September 2023, the carrying value for Skillsoft and the unlisted equity-accounted investment impaired was US$54m and US$73m respectively. |
13. |
OTHER INVESTMENTS AND LOANS |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Investments at fair value through other comprehensive income |
6 083 |
2 771 |
7 528 |
|
Investments at fair value through profit or loss |
41 |
82 |
34 |
|
Investments at amortised cost |
12 |
- |
8 |
|
Other investments and loans |
276 |
433 |
254 |
|
Total investments and loans |
6 412 |
3 286 |
7 824 |
|
Current portion of other investments |
(3 768) |
- |
(4 707) |
|
Investments at fair value through other comprehensive income |
(3 768) |
- |
(4 707) |
|
|
|
|
|
|
Non-current portion of other investments |
2 644 |
3 286 |
3 117 |
|
Reconciliation of investments at fair value through other comprehensive income |
|
|
|
|
Opening balance |
7 528 |
5 918 |
5 918 |
|
Fair value adjustments recognised in other comprehensive income1 |
(1 292) |
(324) |
(158) |
|
Purchases/additional contributions2 |
81 |
160 |
4 724 |
|
Loss of significant influence of an investment in associate3 |
- |
785 |
830 |
|
Disposals4 |
(11) |
(3 733) |
(3 775) |
|
Transfers to equity-accounted investments |
(12) |
- |
- |
|
Impact of the crossholding5 |
(211) |
10 |
10 |
|
Foreign currency translation effects |
- |
(45) |
(21) |
|
Closing balance |
6 083 |
2 771 |
7 528 |
|
1 The significant movement in the current year relates primarily to the revaluation of Meituan. 2 The significant movement in the prior year relates to the Meituan dividend in specie received from Tencent. 3 The significant movement in the prior year relates to the investments in BYJU'S and Udemy upon loss of significant influence. 4 The significant movement in the prior year relates to the disposal of the JD.com investment. 5 The current period includes the deemed disposal of the residual asset in Naspers, which was derecognised due to the removal of the group's cross-holding structure. Refer to note 4. |
14. |
COMMITMENTS AND CONTINGENT LIABILITIES |
|||
|
Commitments relate to amounts for which the group has contracted, but that have not yet been recognised as obligations in the statement of financial position. |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Commitments |
310 |
135 |
307 |
|
Other service commitments |
309 |
130 |
306 |
|
Lease commitments1 |
1 |
5 |
1 |
|
|
|
|
|
|
1 In the current period, lease commitments include the group's short-term lease arrangements as well as other contractual lease agreements whose commencement date is after 30 September 2023. Short-term lease commitments relate to leasing arrangements with lease terms of 12 months or less that are not recognised in the condensed consolidated statement of financial position. |
|||
|
As a global technology investor, the group's portfolio of businesses is well diversified by sector and geography. The group operates on a decentralised basis in numerous countries. Businesses are based in the countries where their operations, their users and consumers are. As a result, the group's businesses pay taxes locally, in the jurisdictions where they operate and where the group's products and services are consumed. Where relevant and appropriate, the group seeks advice and works with its advisers to identify and quantify contingent tax exposures. Our current assessment of possible tax exposures, including interest and potential penalties, amounts to approximately US$192m (2022: US$nil and 31 March 2023: US$191m). |
15. |
DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE |
|
In August 2023, the group announced that it reached an agreement with Rapyd, a leading fintech service provider, to acquire the Global Payments Organisations (GPO) within PayU for a cash transaction worth US$610m. As a result of this agreement, the group classified GPO investments being sold as a disposal group held for sale from August 2023. The disposal group consists of GPO businesses in Eastern Europe and Latin America. |
|
Following the initial decision to sell Zoop Tecnologia e Meios de Pagamento S.A. (Zoop) in September 2022, the group has not been able to conclude the disposal to date due to challenging market conditions. Accordingly, Zoop ceased to be classified as held for sale in September 2023. |
|
In March 2023, the group announced the decision to exit the OLX Autos business unit. The disposal group that is classified as held for sale consists of assets and liabilities of the operations that management has committed to a plan to sell and operations for which the completion of the sale is pending regulatory approval. Efforts to sell the disposal group are in progress and it is expected to be finalised in the 2024 financial year. |
|
In May 2022, following the group's announcement to exit its Russian business, Avito's assets and liabilities were classified as held for sale up until its disposal in October 2022. |
|
The assets and liabilities classified as held for sale are detailed in the table below: |
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Assets |
912 |
2 643 |
649 |
|
Property, plant and equipment |
24 |
160 |
26 |
|
Goodwill |
158 |
1 388 |
302 |
|
Other intangible assets |
7 |
580 |
29 |
|
Investments in associates |
- |
5 |
- |
|
Deferred taxation assets |
1 |
4 |
2 |
|
Inventory |
24 |
- |
32 |
|
Trade and other receivables |
240 |
139 |
164 |
|
Cash and cash equivalents |
458 |
367 |
94 |
|
Liabilities |
681 |
525 |
276 |
|
Capitalised finance leases |
17 |
- |
- |
|
Derivative financial instruments |
- |
3 |
1 |
|
Deferred taxation liabilities |
2 |
113 |
13 |
|
Long-term liabilities |
2 |
68 |
29 |
|
Provisions |
1 |
1 |
2 |
|
Trade payables |
27 |
150 |
165 |
|
Accrued expenses and other current liabilities |
632 |
190 |
66 |
|
|
|
|
|
16. |
EQUITY COMPENSATION BENEFITS |
|
|
|
|
Liabilities arising from share-based payment transactions |
|
|
|
|
Reconciliation of the cash-settled share-based payment liability is as follows: |
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Opening balance |
713 |
1 127 |
1 127 |
|
SAR scheme charge per the income statement |
48 |
(209) |
(187) |
|
Employment-linked put option charge per the income statement |
(62) |
(18) |
14 |
|
Additions |
1 |
- |
- |
|
Settlements |
(83) |
(90) |
(165) |
|
Modification |
- |
- |
5 |
|
Transferred to liabilities classified as held for sale1 |
(5) |
(47) |
(37) |
|
Foreign currency translation effects |
1 |
(40) |
(44) |
|
Closing balance |
613 |
723 |
713 |
|
Less: Current portion of share-based payment liability |
(570) |
(648) |
(656) |
|
Non-current portion of share-based payment liability |
43 |
75 |
57 |
|
1 The prior year relates primarily to Avito that was classified as held for sale in May 2022 prior to its disposal in October 2022 as well as the OLX Autos disposal group classified as held for sale in March 2023. |
17. |
BUSINESS COMBINATIONS, OTHER ACQUISITIONS AND DISPOSALS |
|||||
|
The following sets out the group's significant transactions related to business combinations and other investments for the six months ended 30 September 2023: |
|||||
|
|
|
Amount invested US$'m |
|||
|
Company |
Classification |
Net cash paid/ (received) |
Non- cash consi- deration |
Cash in entity (acquired)/ disposed |
Total consi- deration |
|
Acquisition of subsidiaries |
Subsidiary |
2 |
- |
- |
2 |
|
Additional investment in existing equity-accounted investments |
Associate |
17 |
- |
- |
17 |
|
Other investments |
FVOCI/FVPL |
64 |
- |
- |
64 |
|
Disposal/partial disposal of investments |
|
(4 191) |
12 |
6 |
(4 173) |
|
a. Tencent Holdings Limited (Tencent) |
Associate |
(4 037) |
56 |
- |
(3 981) |
|
b. OLX Autos |
Subsidiary |
(143) |
(44) |
6 |
(181) |
|
Other1 |
|
(11) |
- |
- |
(11) |
|
|
|
|
|
|
|
|
1 'Other' includes various acquisitions and disposals of subsidiaries, associates and other investments that are not individually material. |
|||||
|
Disposal/partial disposal of investments |
|||||
|
a. From April 2023 to the end of September 2023, the group sold 1% of Tencent's issued share capital. The group reduced its stake in Tencent from 26% to 25%, for total proceeds of US$4.0bn of which US$56m was receivable at 30 September 2023. The group recognised a gain on partial disposal of US$2.9bn, including a reclassification of accumulated foreign currency translation losses of US$65m. Proceeds from this disposal are used to fund the group's share repurchase programme. b. During the current period, the group sold operations of the OLX business unit for total proceeds of US$181m of which US$143m was received by 30 September 2023. The loss on disposal, including the reclassification of accumulated foreign currency translation losses, was not material. |
|||||
|
|
18. |
FINANCIAL INSTRUMENTS |
||||
|
The group's activities expose it to a variety of financial risks such as market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. |
||||
|
The condensed consolidated interim financial statements do not include all financial risk management information and disclosures as required in the annual consolidated financial statements and should be read in conjunction with the group's risk management information disclosed in note 40 of the consolidated financial statements, published in the annual report of Prosus for the year ended 31 March 2023. There have been no material changes in the group's credit, liquidity or market risks, or key inputs used in measuring fair value since 31 March 2023. |
||||
|
The fair values of the group's financial instruments that are measured at fair value at each reporting period, are categorised as follows: |
||||
|
|
Fair value measurements at 30 September 2023 using: |
|||
|
|
Carrying value US$'m |
Quoted prices in active markets for identical assets or liabilities (level 1) US$'m |
Significant other observable inputs (level 2) US$'m |
Significant unobservable inputs (level 3) US$'m |
|
Assets |
|
|
|
|
|
Financial assets at fair value through other comprehensive income |
6 083 |
5 039 |
- |
1 044 |
|
Financial assets at fair value through profit or loss |
41 |
1 |
- |
40 |
|
Cash and cash equivalents1 |
200 |
- |
200 |
- |
|
Liabilities |
|
|
|
|
|
Forward exchange contracts |
4 |
- |
4 |
- |
|
Earn-out obligations |
10 |
- |
- |
10 |
|
Derivatives contained in lease agreements |
1 |
- |
- |
1 |
|
|
Fair value measurements at 31 March 2023 using: |
|||
|
|
Carrying value US$'m |
Quoted prices in active markets for identical assets or liabilities (level 1) US$'m |
Significant other observable inputs (level 2) US$'m |
Significant unobservable inputs (level 3) US$'m |
|
Assets |
|
|
|
|
|
Financial assets at fair value through other comprehensive income |
7 528 |
6 044 |
- |
1 484 |
|
Financial assets at fair value through profit or loss |
34 |
4 |
- |
30 |
|
Forward exchange contracts |
5 |
- |
5 |
- |
|
Cash and cash equivalents1 |
447 |
- |
447 |
- |
|
Liabilities |
|
|
|
|
|
Forward exchange contracts |
1 |
- |
1 |
- |
|
Earn-out obligations |
109 |
- |
- |
109 |
|
1 Relates to short-term bank deposits which are money market investments held with major banking groups and high-quality institutions that have AAA money market fund credit ratings from internationally recognised rating agencies. |
||||
|
There was no transfer from level 2 to level 1 (31 March 2023: US$nil) and no transfer from level 3 to level 1 (31 March 2023: a transfer of US$1m). There was a transfer of US$12m from level 3 to an investment in associate (31 March 2023: a transfer of US$622m to level 3 due to investments in associates that lost significant influence during the year). There were no significant changes to the valuation techniques and inputs used in measuring fair value. |
18. |
FINANCIAL INSTRUMENTS continued |
||||
|
Valuation techniques and key inputs used to measure significant level 2 and level 3 fair values |
||||
|
Level 2 fair value measurements |
||||
|
Forward exchange contracts - in measuring the fair value of forward exchange contracts, the group makes use of market observable quotes of forward foreign exchange rates on instruments that have a maturity similar to the maturity profile of the group's forward exchange contracts. Key inputs used in measuring the fair value of forward exchange contracts include: current spot exchange rates, market forward exchange rates and the term of the group's forward exchange contracts. |
||||
|
Cash and cash equivalents - relate to short-term bank deposits which are money market investments held with major banking groups and high-quality institutions that have AAA money market fund credit rating from internationally recognised ratings agencies. The fair value of these deposits is determined by the amounts deposited and the gains or losses generated by the funds as detailed in the statements provided by these institutions. The gains/losses are recognised in the income statement. |
||||
|
Financial assets at fair value - relate to a contractual right to receive shares or cash. The fair value is based on a listed share price on the date the transaction was entered into. |
||||
|
Level 3 fair value measurements |
||||
|
Financial assets at fair value - relate predominantly to unlisted equity investments. The fair value of unlisted equity investments is based on either the most recent funding transactions for these investments, a discounted cash flow calculation (DCF) or a market approach using market multiples. At 30 September 2023, the group used the DCF valuations at 31 March 2023 as there were no significant changes in the underlying equity investments that suggested that the fair value had changed, except for an unlisted equity investment in the Edtech segment. For this investment, a market approach was used to determine its fair value at 30 September 2023 due to the limited available recent financial information. The market approach applied historical financial information to a revenue multiple relative to that of a publicly traded peer group. |
||||
|
Derivatives contained in lease agreements - relate to foreign currency forwards embedded in lease contracts. The fair value of the derivatives is based on forward foreign exchange rates that have a maturity similar to the lease contracts and the contractually specified lease payments. |
||||
|
Earn-out obligations - relate to amounts that are payable to the former owners of businesses now controlled by the group, provided that contractually stipulated post-combination performance criteria are met. These are remeasured to fair value at the end of each reporting period. Key inputs used in measuring fair value include: current forecasts of the extent to which management believes performance criteria will be met, discount rates reflecting the time value of money and contractually specified earn-out payments. |
||||
|
Instruments not measured at fair value for which fair value is disclosed |
||||
|
Level 2 - the fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments at the reporting date. As the instruments are not actively traded, this is a level 2 disclosure. |
||||
|
The following table shows a reconciliation of the group's level 3 financial instruments: |
||||
|
|
30 September 2023 |
|||
|
|
Financial assets at FVOCI1 US$'m |
Financial assets at FVPL2 US$'m |
Earn-out obligations US$'m |
Derivatives embedded in leases US$'m |
|
Balance at 1 April 2023 |
1 484 |
30 |
(109) |
- |
|
Additions |
73 |
10 |
- |
1 |
|
Total losses recognised in other comprehensive income |
(289) |
- |
- |
- |
|
Total gains recognised in the income statement |
- |
- |
99 |
- |
|
Derecognition of residual interest asset |
(211) |
- |
- |
- |
|
Transfer to investments in associates |
(13) |
- |
- |
- |
|
Balance at 30 September 2023 |
1 044 |
40 |
(10) |
1 |
|
1 Financial assets at fair value through other comprehensive income. 2 Financial assets at fair value through profit or loss.
|
18. |
FINANCIAL INSTRUMENTS continued |
|
|
|
|
|
Valuation techniques and key inputs used to measure significant level 2 and level 3 fair values continued |
||||
|
Instruments not measured at fair value for which fair value is disclosed continued |
||||
|
The following table shows a reconciliation of the group's level 3 financial instruments: |
||||
|
|
31 March 2023 |
|||
|
|
Financial assets at FVOCI1 US$'m |
Financial assets at FVPL2 US$'m |
Earn-out obligations US$'m |
Derivatives embedded in leases US$'m |
|
Balance at 1 April 2022 |
1 153 |
44 |
(20) |
9 |
|
Additions |
38 |
41 |
(96) |
- |
|
Total (losses)/gains recognised in the income statement |
- |
(11) |
7 |
- |
|
Total losses recognised in other comprehensive income |
(270) |
- |
- |
- |
|
Settlements/disposals |
(65) |
(35) |
- |
(9) |
|
Impact of share exchange |
10 |
- |
- |
- |
|
Transfers to held for sale |
- |
(9) |
- |
- |
|
Transfers from investments in associates |
622 |
- |
- |
- |
|
Foreign currency translation effects |
(4) |
- |
- |
- |
|
Balance at 31 March 2023 |
1 484 |
30 |
(109) |
- |
|
1 Financial assets at fair value through other comprehensive income. 2 Financial assets at fair value through profit or loss. |
||||
|
The carrying value of financial instruments is a reasonable approximation of their fair value, except for the publicly traded bonds detailed below: |
||||
|
|
30 September 2023 |
31 March 2023 |
||
|
Financial liabilities |
Carrying value US$'m |
Fair value US$'m |
Carrying value US$'m |
Fair value US$'m |
|
Publicly traded bonds |
15 229 |
11 245 |
15 377 |
12 009 |
|
The fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments at the end of the reporting period. The fair values of the publicly traded bonds are level 2 financial instruments. The publicly traded bonds are listed on the Irish Stock Exchange (Euronext Dublin). |
19. |
RELATED PARTY TRANSACTIONS AND BALANCES |
||
|
The group entered into various related party transactions in the ordinary course of business with a number of related parties, including associates and joint ventures. Transactions that are eliminated on consolidation as well as gains or losses eliminated through the application of the equity method are not included. The transactions and balances with related parties are summarised below: |
||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
2023 US$'m |
2023 US$'m |
|
Sale of goods and services to related parties1 |
|
|
|
Skillsoft Corp |
- |
8 |
|
MIH Holdings Proprietary Limited |
5 |
11 |
|
Bom Negócio Atividades de Internet Limitada (OLX Brasil) |
13 |
28 |
|
Various other related parties |
2 |
1 |
|
|
20 |
48 |
|
1 The group receives revenue from a number of its related parties in connection with service agreements. The nature of these related party relationships is that of Naspers group subsidiaries, group associates and joint ventures. |
||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
2023 US$'m |
2023 US$'m |
|
Services received from related parties1 |
|
|
|
MIH Holdings Proprietary Limited |
5 |
9 |
|
Various other related parties |
1 |
2 |
|
|
6 |
11 |
|
1 The group receives corporate and other services rendered by a number of its related parties. The nature of these related party relationships is that of entities under the common control of the group's ultimate controlling parent, Naspers Limited. |
||
|
During the current year, the group recharged US$5m (2022: US$5m and 31 March 2023: US$11m) to Naspers companies in respect of services performed on their behalf. In addition, Naspers recharged costs of US$5m (2022: US$5m and 31 March 2023: US$9m) to the group's companies. |
19. |
RELATED PARTY TRANSACTIONS AND BALANCES continued |
||
|
The balances of advances, deposits, receivables and payables between the group and related parties are as follows: |
||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
2023 US$'m |
2023 US$'m |
|
Dividends payable/paid to holding company |
|
|
|
Naspers Limited |
79 |
89 |
|
|
79 |
89 |
|
Loans and receivables1 |
|
|
|
MIH Treasury Services Limited |
- |
11 |
|
MIH Ecommerce Holdings Proprietary Limited |
19 |
- |
|
MIH Holdings Proprietary Limited |
5 |
5 |
|
Bom Negócio Atividades de Internet Limitada (OLX Brasil)2 |
162 |
150 |
|
MIH Internet Holdings B.V. Share Trust3 |
89 |
102 |
|
Inversiones CMR S.A.S. |
1 |
1 |
|
GoodGuyz Investments B.V. |
6 |
6 |
|
Silvergate Capital Corporation |
2 |
2 |
|
Various other related parties |
11 |
17 |
|
Less: Allowance for impairment of loans and receivables4 |
- |
- |
|
Total related party receivables |
295 |
294 |
|
Less: Non-current portion of related party receivables |
(277) |
(254) |
|
Current portion of related party receivables |
18 |
40 |
|
Payables |
|
|
|
MIH Holdings Proprietary Limited |
4 |
3 |
|
Zitec Com SRL |
2 |
3 |
|
Various other related parties |
2 |
2 |
|
Total related party payables |
8 |
8 |
|
Less: Non-current portion of related party payables |
(2) |
(2) |
|
Current portion of related party payables |
6 |
6 |
|
Dividend payable |
|
|
|
Naspers Limited |
77 |
- |
|
Total dividend payable included in current liabilities |
77 |
- |
|
1 The group provides services and loan funding to a number of its related parties. 2 The loan is repayable by October 2035 and interest is charged annually at SELIC + 2%. 3 Relates to related party loan-funding provided to Naspers group share trust for equity compensation plans. The loan is interest-free and repayable in 2031 or upon winding up of the trust, if earlier. Cash flows for this transaction are disclosed as investing activities in the condensed consolidated statement of cash flows. 4 Impairment allowance for non-current receivables from related parties is based on a 12-month expected credit loss model and was not material. |
19. |
RELATED PARTY TRANSACTIONS AND BALANCES continued |
|
Terms of significant related party current receivables and payables |
|
The above current receivables and payables relate primarily to cost recharges to/by entities under the common control of Naspers Limited, the group's ultimate controlling parent. These current receivables and payables are interest free. |
|
Shares held in holding company |
|
At 31 March 2023, as a result of the share exchange transaction and the group's share repurchase programme, Prosus held a 52.5% fully diluted interest in Naspers, representing a 52.7% economic interest. Prosus' legal ownership in Naspers remained at less than 50%. The fully diluted and economic interest was determined based on the terms of the cross-holding agreement with Naspers. The cross-holding agreement governed how distributions between the two groups would be managed. |
|
Based on the substance of the above transactions, the portion of the effective interest in Naspers that relates to Prosus' underlying investments was accounted for as a shareholder distribution in equity. Only Prosus' residual interest in the Naspers group was recognised as an investment at fair value through other comprehensive income on the condensed consolidated statement of financial position. |
|
In September 2023, following the removal of the group's cross-holding structure, the residual asset in Naspers was derecognised and the Naspers N ordinary shares held by Prosus were subsequently disposed on the market. The group derecognised US$211m (31 March 2023: US$206m) of the Naspers residual asset and recognised an investment in Naspers amounting to US$7m. The excess of the residual asset derecognised and the Naspers shares of US$204m was recognised in the 'Existing control business combination reserve' in equity, representing the cancellation of the cross-holding structure with no change in the equity structure of the group. The group received US$7m as a result of the sale of these N ordinary shares on the market. |
|
Refer to note 4 for details of the accounting treatment for the above transactions. |
|
Group contributions to Naspers share trusts |
|
The group made contributions to Naspers share trusts amounting to US$147m (2022: US$127m and 31 March 2023: US$191m) during the current period. |
|
Executive leadership and board changes |
|
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 as interim chief executive. Bob will assist in the transition and will remain as 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 remains unchanged as a result of his interim appointment. |
20. |
EVENTS AFTER THE REPORTING PERIOD |
|
As part of the open-ended share repurchase programme, Prosus acquired 33 763 633 Prosus ordinary shares N for US$1.0bn and Naspers acquired 2 608 759 Naspers N ordinary shares for US$438m between October and 24 November 2023. Furthermore, Naspers disposed of 14 201 281 Prosus ordinary shares N for US$428m between October and 24 November 2023. The group will account for this transaction in the same manner that it was accounted for in the year ended 30 September 2023. |
|
The group sold 26 217 600 shares of Tencent Holdings Limited (Tencent) between October and 24 November 2023, yielding US$1.0bn in proceeds. An accurate estimate for the gain on disposal of these shares cannot be made until the corresponding equity-accounted results for the period have been finalised. |
INDEPENDENT AUDITOR'S REVIEW REPORT ON THE INTERIM FINANCIAL STATEMENTS
To the Board of Directors of Prosus N.V.
Our conclusion
We have reviewed the condensed consolidated interim financial information of Prosus N.V. based in Amsterdam, The Netherlands.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information of Prosus N.V. is not prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union.
The interim financial information comprises:
· The condensed consolidated statement of financial position as at 30 September 2023.
· The condensed consolidated income statement for the period from 1 April 2023 to 30 September 2023.
· The condensed consolidated statement of comprehensive income for the period from 1 April 2023 to 30 September 2023.
· The condensed consolidated statement of changes in equity for the period from 1 April 2023 to 30 September 2023.
· Condensed consolidated statement of cash flows for the period from 1 April 2023 to 30 September 2023.
· The notes comprising of a summary of the accounting policies and other explanatory information.
Basis for our conclusion
We conducted our review in accordance with Dutch law, including the Dutch Standard 2410, 'Het beoordelen van tussentijdse financiële informatie door de accountant van de entiteit' (Review of interim financial information performed by the independent auditor of the entity). A review of interim financial information in accordance with the Dutch Standard 2410 is a limited assurance engagement. Our responsibilities under this standard are further described in the 'Our responsibilities for the review of the interim financial information' section of our report.
We are independent of Prosus N.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Responsibilities of the board of directors and the supervisory board for the interim financial information
The board of directors is responsible for the preparation of the interim financial information in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. Furthermore, the board of directors is responsible for such internal control as it determines is necessary to enable the preparation of the interim financial information that are free from material misstatement, whether due to fraud or error.
The supervisory board is responsible for overseeing the company's financial reporting process.
Our responsibilities for the review of the interim financial information
Our responsibility is to plan and perform the review in a manner that allows us to obtain sufficient and appropriate assurance evidence for our conclusion.
The level of assurance obtained in a limited assurance engagement is substantially less than the level of assurance obtained in an audit conducted in accordance with the Dutch Standards on Auditing. Accordingly, we do not express an audit opinion.
We have exercised professional judgement and have maintained professional skepticism throughout the review, in accordance with Dutch Standard 2410.
INDEPENDENT AUDITOR'S REVIEW REPORT ON THE INTERIM FINANCIAL STATEMENTS continued
Our review included among others:
· Obtaining an understanding in the entity and its environment, including its internal control, and the applicable financial reporting framework, in order to identify areas in the interim financial information where material misstatements are likely to arise due to fraud or error, designing and performing procedures to address those areas, and obtaining assurance evidence that is sufficient and appropriate to provide a basis for our conclusion.
· Obtaining an understanding of internal control, as it relates to the preparation of the interim financial information.
· Making inquiries of the board and others within the company.
· Applying analytical procedures with respect to information included in the interim financial information.
· Obtaining assurance evidence that the interim financial information agrees with or reconciles to the company's underlying accounting records.
· Evaluating the assurance evidence obtained.
· Considering whether there have been any changes in accounting principles or in the methods of applying them and whether any new transactions have necessitated the application of a new accounting principle.
· Considering whether the board has identified all events that may require adjustment to or disclosure in the interim financial information.
· Considering whether the interim financial information has been prepared in accordance with the applicable financial reporting framework and represents the underlying transactions free from material misstatement.
Amsterdam, November 28, 2023
Deloitte Accountants B.V.
I.A. Buitendijk
OTHER INFORMATION TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 September 2023 |
||||
A. |
NON-IFRS FINANCIAL MEASURES AND ALTERNATIVE PERFORMANCE MEASURES |
|||
A.1 |
Core headline earnings |
|||
|
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; |
|||
|
Reconciliation of core headline earnings |
|
|
|
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Headline earnings from continuing operations (refer to note 7) |
1 409 |
200 |
756 |
|
Adjusted for: |
|
|
|
|
Equity-settled share-based payment expenses |
501 |
806 |
1 449 |
|
Remeasurement of cash-settled share-based incentive expenses |
(17) |
(249) |
(257) |
|
Amortisation of other intangible assets |
243 |
348 |
664 |
|
Fair value adjustments and currency translation differences |
(108) |
(13) |
(13) |
|
Retention option expense |
(61) |
(13) |
23 |
|
Transaction-related costs |
45 |
11 |
91 |
|
Core headline earnings from continuing operations |
2 012 |
1 090 |
2 713 |
|
Per share information for the period |
|
|
|
|
Core headline earnings per ordinary share N (US cents)1 |
76 |
39 |
99 |
|
Diluted core headline earning per ordinary share N (US cents)2 |
75 |
38 |
94 |
|
1 Core headline earnings per share are based on the weighted average number of shares taking into account the impact of the removal of the group's cross-holding structure in the current and prior period. 2 The diluted core headline earnings per share include a decrease of US$26m (2022: US$33m and March 2023: US$116m) relating to the future dilutive impact of potential ordinary shares issued by equity-accounted investees. |
A. |
NON-IFRS FINANCIAL MEASURES AND ALTERNATIVE PERFORMANCE MEASURES continued |
|||
A.1 |
Core headline earnings continued |
|
|
|
|
Reconciliation of core headline earnings continued |
|
|
|
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Headline earnings from discontinued operations (refer to note 7) |
(128) |
(13) |
(128) |
|
Adjusted for: |
|
|
|
|
Remeasurement of cash-settled share-based incentive expenses |
(2) |
(33) |
(41) |
|
Amortisation of other intangible assets |
- |
12 |
15 |
|
Fair value adjustments and currency translation differences |
4 |
18 |
(60) |
|
Transaction-related costs |
9 |
- |
- |
|
Core headline earnings from discontinued operations |
(117) |
(16) |
(214) |
|
Per share information for the period |
|
|
|
|
Core headline earnings per ordinary share N (US cents) |
(4) |
(1) |
(8) |
|
Diluted core headline earnings per ordinary share N (US cents) |
(4) |
(1) |
(8) |
|
Equity-accounted results |
|
|
|
|
The group's equity-accounted investments contributed to the condensed consolidated interim financial statements as follows:
|
|||
|
|
Six months ended 30 September |
Year ended 31 March |
|
|
|
2023 US$'m |
2022 US$'m |
2023 US$'m |
|
Share of equity-accounted results from continuing operations |
1 152 |
1 059 |
5 174 |
|
Sale of assets |
1 |
3 |
5 |
|
Gains on acquisitions and disposals |
(14) |
(1 823) |
(5 873) |
|
Impairment of investments |
25 |
783 |
1 919 |
|
Contribution to headline earnings from continuing operations |
1 164 |
22 |
1 225 |
|
Amortisation of other intangible assets |
229 |
335 |
641 |
|
Equity-settled share-based payment expenses |
500 |
803 |
1 440 |
|
Fair value adjustments and currency translation differences |
116 |
292 |
(75) |
|
Acquisition-related costs |
16 |
34 |
62 |
|
Contribution to core headline earnings from continuing operations |
2 025 |
1 486 |
3 293 |
|
Tencent |
2 285 |
2 098 |
4 326 |
|
Delivery Hero |
(103) |
(206) |
(374) |
|
Other |
(157) |
(406) |
(659) |
|
|
|
|
|
|
The group applies an appropriate lag period of not more than three months in reporting the results of equity-accounted investments. |
A. |
NON-IFRS FINANCIAL MEASURES AND ALTERNATIVE PERFORMANCE MEASURES continued |
||
A.2 |
Growth in local currency, excluding acquisitions and disposals |
||
|
The group applies certain adjustments to segmental revenue and trading profit reported in the condensed consolidated interim financial statements to present the growth in such metrics in local currency, excluding the effects of changes in the composition of the group. Such underlying adjustments provide a view of the company's underlying financial performance that management believes is more comparable between periods by removing the impact of changes in foreign exchange rates, hyperinflation adjustments and changes in the composition of the group on its results. Such adjustments are referred to herein as 'growth in local currency, excluding acquisitions and disposals'. The group applies the following methodology in calculating growth in local currency, excluding acquisitions and disposals: · Foreign exchange/constant currency adjustments have been calculated by adjusting the current period's results to the prior period's average foreign exchange rates, determined as the average of the monthly exchange rates for that period. The local currency financial information quoted is calculated as the constant currency results arrived at using the methodology outlined above, compared to the prior period's actual IFRS results. The relevant average exchange rates (relative to the US dollar) used for the group's most significant functional currencies, were: |
||
|
|
Six months ended 30 September |
|
|
Currency (1FC = US$) |
2023 |
2022 |
|
South African rand (ZAR) |
0.0533 |
0.0602 |
|
Euro (EUR) |
1.0836 |
1.0297 |
|
Chinese yuan renminbi (RMB) |
0.1396 |
0.1473 |
|
Brazilian real (BRL) |
0.2031 |
0.1952 |
|
Indian rupee (INR) |
0.0121 |
0.0127 |
|
Polish zloty (PLN) |
0.2403 |
0.2184 |
|
Russian rouble (RUB) |
0.0112 |
0.0160 |
|
British pound sterling (GBP) |
1.2566 |
1.2028 |
|
Turkish lira (TRY) |
0.0407 |
0.0585 |
|
Hungarian forint (HUF) |
0.0029 |
0.0026 |
|
· Adjustments made for changes in the composition of the group relate to acquisitions, mergers and disposals of subsidiaries and equity-accounted investments, as well as to changes in the group's shareholding in its equity-accounted investments. For acquisitions, adjustments are made to remove the revenue and trading profit/(loss) of the acquired entity from the current reporting period and in subsequent reporting periods to ensure that the current reporting period and the comparative reporting period contain revenue and trading profit/(loss) information relating to the same number of months. For mergers, adjustments are made to include a portion of the prior period's revenue and trading profit/(loss) of the entity acquired as a result of a merger. For disposals, adjustments are made to remove the revenue and trading profit/(loss) of the disposed entity from the previous reporting period to the extent that there is no comparable revenue or trading profit/(loss) information in the current period and, in subsequent reporting periods, to ensure that the previous reporting period does not contain revenue and trading profit/(loss) information relating to the disposed business. |
||
|
Core headline earnings and the growth in local currency, excluding acquisitions and disposals, are the responsibility of the board of directors of the group. The auditor, Deloitte, has issued an ISAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information and their unmodified report has been issued and is available for inspection at the group's registered office. |
A. |
NON-IFRS FINANCIAL MEASURES AND ALTERNATIVE PERFORMANCE MEASURES continued |
|||
A.2 |
Growth in local currency, excluding acquisitions and disposals continued |
|||
|
The following significant changes in the composition of the group during the respective reporting periods have been adjusted for in arriving at the pro forma financial information: |
|||
|
For the six months 1 April 2023 to 30 September 2023 |
|||
|
Transaction |
Basis of accounting |
Reportable segment |
Acquisition/ Disposal |
|
Dilution of the group's interest in Tencent |
Associate |
Social and internet platforms |
Disposal |
|
Dilution of the group's interest in EMPG |
Associate |
Ecommerce |
Disposal |
|
Dilution of the group's interest in OfferUp |
Associate |
Ecommerce |
Disposal |
|
Disposal of the group's interest in Oda |
Associate |
Ecommerce |
Disposal |
|
Dilution of the group's interest in Flink |
Associate |
Ecommerce |
Disposal |
|
Disposal of the group's interest in iFood Colombia |
Associate |
Ecommerce |
Disposal |
|
Disposal of the group's interest in PayU Russia |
Subsidiary |
Ecommerce |
Disposal |
|
Acquisition of the group's interest in Ding |
Subsidiary |
Ecommerce |
Acquisition |
|
Step-up in the group's interest in Flip, together with the |
Subsidiary |
Ecommerce |
Acquisition/Disposal |
|
Increase in the group's interest in Delivery Hero |
Associate |
Ecommerce |
Acquisition |
|
Increase in the group's interest in Swiggy |
Associate |
Ecommerce |
Acquisition |
|
Increase/dilution in the group's interest in Emicotransit |
Associate |
Ecommerce |
Acquisition/Disposal |
|
Increase/dilution in the group's interest in ElasticRun |
Associate |
Ecommerce |
Acquisition/Disposal |
|
Acquisition of the group's interest in Azos |
Associate |
Ecommerce |
Acquisition |
|
Increase in the group's interest in PharmEasy |
Associate |
Ecommerce |
Acquisition |
|
Acquisition of the group's interest in Planet24 |
Associate |
Ecommerce |
Acquisition |
|
Acquisition of the group's interest in Alwans |
Associate |
Ecommerce |
Acquisition |
|
Increase in the group's interest in Captain Fresh |
Associate |
Ecommerce |
Acquisition |
|
Increase in the group's interest in Sangvhi Beauty |
Associate |
Ecommerce |
Acquisition |
|
Increase/dilution in the group's interest in Bux |
Associate |
Ecommerce |
Acquisition/Disposal |
|
Increase/dilution in the group's interest in Klar |
Associate |
Ecommerce |
Acquisition/Disposal |
|
Dilution of the group's interest in Remitly |
Associate |
Ecommerce |
Disposal |
|
Increase in the group's interest in FinWizard |
Associate |
Ecommerce |
Acquisition |
|
Loss of control of the group's interest in Udemy |
Associate |
Ecommerce |
Disposal |
|
Loss of control of the group's interest in BYJU'S |
Associate |
Ecommerce |
Disposal |
|
Dilution of the group's interest in Skillsoft |
Associate |
Ecommerce |
Disposal |
|
The net adjustment made for all acquisitions and disposals on continuing operations that took place during the period ended 30 September 2023 amounted to a negative adjustment of US$1.3bn on revenue and a negative adjustment of US$147m on trading profit. The group composition disposal adjustments include the impact of a change in revenue recognition related to iFood. |
A. |
NON-IFRS FINANCIAL MEASURES AND ALTERNATIVE PERFORMANCE MEASURES continued |
||||||||
A.2 |
Growth in local currency, excluding acquisitions and disposals continued |
||||||||
|
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial information are presented in the table below: |
||||||||
|
|
Six months ended 30 September |
|||||||
|
|
2022 |
2023 |
2023 |
2023 |
2023 |
2023 |
2023 |
2023 |
|
|
A |
B |
C |
D |
E |
F2 |
G3 |
H4 |
|
|
IFRS 81 US$'m |
Group composition disposal adjustment US$'m |
Group composition acquisition adjustment US$'m |
Foreign currency adjustment US$'m |
Local currency growth US$'m |
IFRS 81 US$'m |
Local currency growth % change |
IFRS 8 % change |
|
Continuing operations |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Ecommerce |
4 246 |
(290) |
179 |
108 |
696 |
4 939 |
18 |
16 |
|
Classifieds5, 6 |
368 |
(3) |
- |
17 |
84 |
466 |
23 |
27 |
|
Food Delivery7 |
1 911 |
(129) |
160 |
94 |
408 |
2 444 |
23 |
28 |
|
Payments and |
|
|
|
|
|
|
|
|
|
Fintech |
480 |
(7) |
1 |
(45) |
162 |
591 |
34 |
23 |
|
Edtech |
334 |
(141) |
- |
1 |
17 |
211 |
9 |
(37) |
|
Etail |
852 |
3 |
8 |
47 |
38 |
948 |
4 |
11 |
|
Other |
301 |
(13) |
10 |
(6) |
(13) |
279 |
(5) |
(7) |
|
Social and internet platforms |
11 309 |
(1 156) |
- |
(594) |
1 116 |
10 675 |
11 |
(6) |
|
Tencent |
11 309 |
(1 156) |
- |
(594) |
1 116 |
10 675 |
11 |
(6) |
|
Corporate segment |
- |
- |
- |
- |
- |
- |
- |
- |
|
Economic interest from continuing operations |
15 555 |
(1 446) |
179 |
(486) |
1 812 |
15 614 |
13 |
- |
|
Discontinued operations5, 6 |
1 511 |
(625) |
- |
(93) |
(175) |
618 |
(20) |
(59) |
|
Group economic interest |
17 066 |
(2 071) |
179 |
(579) |
1 637 |
16 232 |
11 |
(5) |
|
1 Figures presented on an economic-interest basis as per the segmental review. |
||||||||
|
2 A + B + C + D + E. |
|
3 [E/(A + B)] x 100. |
|
4 [(F/A) - 1] x 100. |
|
|
||
|
5 From 1 April 2022, following the separation from the OLX Group, the CODM reviewed the financial results of Avito separately. Subsequent to the group's decision to exit this Russian business, Avito was presented as a discontinued operation up until the date of disposal. 6 From 1 March 2023, following the group's decision to exit the OLX Autos business unit, its operations disposed, classified as held for sale or closed down by 7 From 1 April 2023, iFood changed its revenue recognition from a gross basis to a net basis as a result of a change in the services rendered to its customers. Refer to note 4.
|
A. |
NON-IFRS FINANCIAL MEASURES AND ALTERNATIVE PERFORMANCE MEASURES continued |
||||||||
A.2 |
Growth in local currency, excluding acquisitions and disposals continued |
||||||||
|
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial information are presented in the table below: |
||||||||
|
|
Six months ended 30 September |
|||||||
|
|
2022 |
2023 |
2023 |
2023 |
2023 |
2023 |
2023 |
2023 |
|
|
A |
B |
C |
D |
E |
F2 |
G3 |
H4 |
|
|
IFRS 81 US$'m |
Group composition disposal adjustment US$'m |
Group composition acquisition adjustment US$'m |
Foreign currency adjustment US$'m |
Local currency growth US$'m |
IFRS 81 US$'m |
Local currency growth % change |
IFRS 8 % change |
|
Continuing operations |
|
|
|
|
|
|
|
|
|
Trading profit |
|
|
|
|
|
|
|
|
|
Ecommerce |
(805) |
122 |
(14) |
2 |
449 |
(246) |
66 |
69 |
|
Classifieds5, 6 |
33 |
- |
- |
7 |
70 |
110 |
>100 |
>100 |
|
Food Delivery7 |
(381) |
22 |
(10) |
- |
214 |
(155) |
60 |
59 |
|
Payments and Fintech |
(97) |
1 |
(2) |
(2) |
66 |
(34) |
69 |
65 |
|
Edtech |
(178) |
91 |
- |
(1) |
24 |
(64) |
28 |
64 |
|
Etail |
(38) |
- |
- |
(1) |
14 |
(25) |
37 |
34 |
|
Other |
(144) |
8 |
(2) |
(1) |
61 |
(78) |
45 |
46 |
|
Social and internet platforms |
2 497 |
(255) |
- |
(159) |
792 |
2 875 |
35 |
15 |
|
Tencent |
2 497 |
(255) |
- |
(159) |
792 |
2 875 |
35 |
15 |
|
Corporate segment |
(82) |
- |
- |
- |
8 |
(74) |
10 |
10 |
|
Economic interest from continuing operations |
1 610 |
(133) |
(14) |
(157) |
1 249 |
2 555 |
85 |
59 |
|
Discontinued operations5, 6 |
17 |
(193) |
- |
9 |
52 |
(115) |
(30) |
>(100) |
|
Group economic interest |
1 627 |
(326) |
(14) |
(148) |
1 301 |
2 440 |
100 |
50 |
|
1 Figures presented on an economic-interest basis as per the segmental review. |
||||||||
|
2 A + B + C + D + E. |
|
3 [E/(A + B)] x 100. |
|
4 [(F/A) - 1] x 100. |
|
|
||
|
5 From 1 April 2022, following the separation from the OLX Group, the CODM reviewed the financial results of Avito separately. Subsequent to the group's decision to exit this Russian business, Avito was presented as a discontinued operation. 6 From 1 March 2023, following the group's decision to exit the OLX Autos business unit, its operations disposed, classified as held for sale or closed down by 7 From 1 April 2023, iFood changed its revenue recognition from a gross basis to a net basis as a result of a change in the services rendered to its customers. Refer to note 4. |
ADMINISTRATION AND CORPORATE INFORMATION
Prosus N.V.
Incorporated in the Netherlands
(Registration number: 34099856)
(Prosus or the group)
Euronext Amsterdam and
JSE share code: PRX
ISIN: NL 0013654783
Directors
JP Bekker (chair), S Dubey, HJ du Toit, CL Enenstein,
M Girotra, RCC Jafta, AGZ Kemna, FLN Letele,
D Meyer, R Oliveira de Lima, SJZ Pacak, V Sgourdos,
MR Sorour, JDT Stofberg, Y Xu
Company secretary
Lynelle Bagwandeen
Gustav Mahlerplein 5
Symphony Offices
1082 MS Amsterdam
The Netherlands
Registered office
Gustav Mahlerplein 5
Symphony Offices
1082 MS Amsterdam
The Netherlands
Tel: +31 20 299 9777
www.prosus.com
Independent auditor
Deloitte Netherlands
Gustav Mahlerlaan 2970
1081 LA Amsterdam
The Netherlands
Euronext listing agent
ING Bank N.V.
Bijlmerplein 888
1102 MG Amsterdam
The Netherlands
Euronext paying agent
ABN AMRO Bank N.V.
Corporate broking and issuer services
HQ 7212
Gustav Mahlerlaan 10
1082 PP Amsterdam
The Netherlands
JSE transfer secretary
Computershare Investor Services
Proprietary Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank
Johannesburg 2196
South Africa
Tel: +27 (0)86 110 0933
Cross-border settlement agent
Citibank, N.A. South Africa Branch
145 West Street
Sandown
Johannesburg 2196
South Africa
JSE sponsor
Investec Bank Limited
(Registration number: 1969/004763/06)
PO Box 785700
Sandton 2146
South Africa
Tel: +27 (0)11 286 7326
Fax: +27 (0)11 286 9986
ADR programme
Bank of New York Mellon maintains a GlobalBuyDIRECTSM plan for Prosus N.V.
For additional information, please visit Bank of New York Mellon's website at www.globalbuydirect.com
or call Shareholder Relations at 1-888-BNY-ADRS or 1-800-345-1612 or write to:
Bank of New York Mellon, Shareholder
Relations Department - GlobalBuyDIRECTSM
Church Street Station
PO Box 11258
New York, NY 10286-1258
USA
Attorney
Allen & Overy LLP
Apollolaan 15
1077 AB Amsterdam
The Netherlands
Investor relations
Eoin Ryan
InvestorRelations@prosus.com
Tel: +1 347 210 4305
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995 concerning our financial condition, results of operations and businesses. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and all of which are based on our current beliefs and expectations about future events. Forward-looking statements are typically identified by the use of forward-looking terminology such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'intends', 'estimates', 'plans', 'assumes' or 'anticipates', or associated negative, or other variations or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These forward-looking statements and other statements contained in this report on matters that are not historical facts involve predictions.
No assurance can be given that such future results will be achieved. Actual events or results may differ materially as a result of risks and uncertainties implied in such forward-looking statements.
A number of factors could affect our future operations and could cause those results to differ materially from those expressed in the forward-looking statements, including (without limitation): (a) changes to IFRS and associated interpretations, applications and practices as they apply to past, present and future periods; (b) ongoing and future acquisitions, changes to domestic and international business and market conditions such as exchange rate and interest rate movements; (c) changes in domestic and international regulatory and legislative environments;
(d) changes to domestic and international operational, social, economic and political conditions; (e) labour disruptions and industrial action; and (f) the effects of both current and future litigation. The forward-looking statements contained in this report apply only as of the date of the report. We are not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements to reflect events or circumstances after the date of the report or to reflect the occurrence of unanticipated events. We cannot give any assurance that forward-looking statements will prove correct and investors are cautioned not to place undue reliance on any forward-looking statements.
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