Naspers (NPN) H2 2024 earnings summary

Executive summary

• Achieved first year of e-commerce profitability, with a $451 million improvement in trading profit and a 3x increase in free cash flow, driven by operational improvements and higher dividends from Tencent.

• iFood and OLX were standout performers, with iFood expanding into new verticals and OLX significantly increasing user engagement and monetization.

• Artificial Intelligence was embedded across the group, driving innovation, productivity, and ~$100 million in annual cost reductions.

• Continued large-scale share buyback program, repurchasing over 20% of market cap and creating $32 billion in value.

• Sustainability commitments on track, including verified science-based climate targets and improved ESG benchmarks.

Financial highlights

• Peer-leading revenue growth, accelerating by 3% versus H1 and 2% year-over-year, with group revenue from continuing operations up 19% to $5.5 billion.

• E-commerce profitability improved by $451 million, turning a $413 million loss into a $38 million profit.

• Core headline earnings nearly doubled to $5 billion, with a 96% rise in headline earnings per share due to buybacks.

• Free cash flow increased 3x to $524 million, a $773 million year-over-year improvement.

• Strong balance sheet with $14.6 billion in cash on hand and net debt at $0.6 billion as of 31 March 2024.

Outlook and guidance

• Ambition to continue outgrowing peers and expand profit margins to peer levels across all segments.

• Focus on leveraging ecosystem synergies, especially in AI and operational best practices, to drive further profitable growth.

• No specific FY25 trading profit guidance provided, but internal targets are ambitious and focus remains on margin expansion.

• Commitment to maintaining the share repurchase program and highlighting portfolio value.

• Ongoing emphasis on innovation, AI integration, and operational efficiency to sustain long-term value creation.