The share price of JSE-listed technology holding giant Naspers fell around 4% on Tuesday morning, following the group issuing a profit warning after the market closed on Monday.
In its Sens trading statement, Naspers flagged an anticipated plunge in core headline earnings per share (Heps) for continuing operations of between 52.3% (206 cents) and 59.7% (235 cents) for the six months ended 30 September 2022.
The share price of Naspers’s sister group Prosus also fell on the news.
Naspers noted that its core Heps, which is used as an integral measure of operating performance, declined due to investment in adjacent opportunities in ecommerce, lower contributions from associates and Tencent.
“During the period, growth expectations and valuations came under significant pressure as consumers adapted to the realities of higher inflation and interest rates on their daily lives and spending power,” the group said.
Naspers added that the decline in Heps is due to lower profitability across its associates, including its share of Tencent’s fair value losses on financial instruments of $372 million compared to fair value gains of $1 billion in the prior period.
“Headline earnings are also impacted by our increased investment in earlier stage ecommerce extensions of autos, convenience and credit,” it noted.
Naspers said it expects a decline of between 81.3% and 88.3% in its earnings per share for the half-year. It noted the significant decline relates to a gain of $12.3 billion realised on the sale of a 2% interest in Tencent in the prior year, compared to an expected gain of only $2.8 billion on the sell down of Tencent shares in the current period.
Nondumiso Lehutso is a Moneyweb intern.