Tencent increases Prosus profits, e-commerce transaction losses expand Reuters

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© Reuters. File picture: On September 11, 2019, when Prosus started trading on the Euronext Stock Exchange in Amsterdam, the Netherlands, the Prosus logo was displayed on the stock exchange building in Amsterdam. REUTERS/Piroschka van de Wouw/File photo

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Authors: Toby Sterling and Promit Mukherjee

Amsterdam/Johannesburg (Reuters)-Prosus (OTC:) holds a US$175 billion minority stake in Chinese Internet gaming and social media group Tencent. Its trading profit in the first half of the year increased by 8% to US$2.9 billion due to its rapid revenue growth. The overall investment portfolio.

Sometimes compared with SoftBank and its Vision Fund, Prosus NV owns shares in many consumer Internet companies, among which Tencent Holdings (OTC:) returns dominate its overall performance.

Although Prosus sold some Tencent shares to obtain a one-time profit of 12.3 billion US dollars, its net profit soared, but the operating loss of the business controlled by it increased.

Prosus said in a statement on Monday that revenue from its e-commerce portfolio increased by 53% to US$4.2 billion, while the division’s trading losses increased to US$372 million from a loss of US$214 million in the same period last year.

The e-commerce portfolio excludes its returns from Tencent Holdings, and covers a set of businesses owned or controlled by Prosus in classified advertising, food delivery, education technology, and financial technology and payment.

Prosus estimates that the market value of the e-commerce business is approximately US$49 billion.

Its classified advertising business has better profitability, and its food delivery business has grown strongly, including iFood in Brazil and Swiggy in India.

These figures are consistent with the signs given by the company in its advance announcement on November 16.

Prosus CEO Bob Van Dijk said that he does not expect China’s recent crackdown on large technology companies to have a negative impact on future earnings.

“Although some regulations are about to be introduced…In my opinion, Tencent is the best-positioned Internet company in the world’s most attractive Internet market,” he told reporters on the phone.

In August, Prosus and Naspers established a cross-shareholding structure. Prosus shareholders own 60% of its underlying assets, but Naspers retains control. They share the same board.

In a separate earnings report, South Africa’s largest company by market capitalization, Naspers, reported half-year revenue of $17.2 billion, a year-on-year increase of 29%.

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