E-commerce retailer Prosus reports 29% jump in H1 headline earnings

E-commerce retailer Prosus, a Netherlands-based company controlled by South Africa's Naspers, has reported a 29% jump in first-half earnings, largely attributed to its Chinese affiliate Tencent. Chief Financial Officer, Basil Sgourdos, recently sat down with CNBC Africa to discuss the company's financial standing and plans for the future. With a healthy balance sheet boasting $4.3 billion in cash reserves, Prosus is strategically looking to make the most of its financial position. Sgourdos highlighted that the company has announced a $5 billion share buyback program, taking advantage of trading at a discount to net asset value. This move aims to create shareholder value by enhancing returns. In addition to the share buyback, Prosus has been active in the mergers and acquisitions space, investing $600 million in the first half of the year with more deals in the pipeline. The company is also actively seeking out new business opportunities in South Africa, setting up an assets foundry to fund early-stage ventures, focusing on creating the next big success story. Sgourdos expressed excitement for the future, particularly in the edge technology segment, where Prosus has already invested heavily. The company recently announced a $500 million investment in a leading U.S. edge tech company, demonstrating its commitment to staying ahead in the rapidly evolving tech landscape. Despite concerns about valuations and market conditions, Prosus remains confident in its ability to identify and capitalize on early-stage opportunities, citing a track record of generating impressive returns on investment. The company's strategic approach to capital allocation has proven successful, with plans to continue delivering strong results and exploring opportunities to further enhance shareholder value. Sgourdos emphasized that Prosus is committed to finding ways to reduce the 73% shareholding that Naspers has in the company, with a focus on maximizing value for shareholders. The company views this as a long-term journey of evolution and growth, with careful consideration of various options to unlock value. As the conversation shifted to the African Continental Free Trade Area, Sgourdos expressed optimism and excitement about the benefits of open trade and market access in the region. Prosus sees the African continent as a key investment destination, with over a billion dollars allocated to internet-related ventures on the continent. While acknowledging challenges in deploying capital in Africa due to infrastructure and regulatory hurdles, Prosus remains bullish on the continent's potential, highlighting the abundant human capital and entrepreneurial spirit driving innovation and growth. With a proactive approach to exploring opportunities in Africa and a focus on strategic investments, Prosus is poised to capitalize on its strong earnings and drive sustainable growth in the region and beyond.