Wrap Text
Update on impact of COVID-19
PROSUS N.V
Incorporated in the Netherlands
Trade register number: 34099856
Legal Entity Identifier: 635400Z5LQ5F9OLVT688
ISIN: NL0013654783
Euronext Amsterdam and JSE Share code: PRX
("Prosus")
Update on impact of COVID-19
- Focussing on the health of its employees and communities
- Working hard to safeguard customers, partners and businesses
- Strong financial position to navigate uncertain times
Today, 8 April 2020, Prosus (together with its consolidated subsidiaries, the "Group")
provides an update on its response to the COVID-19 pandemic, and outlines its actions to
safeguard its employees, customers and businesses as well as to support the communities
in which it operates.
The Group is a global consumer internet group and one of the largest technology investors
in the world. The Group’s businesses serve customers in more than 90 markets. The Group
estimates that approximately one-fifth of the world’s population use products and services
of businesses that the Group has built, acquired or invested in. The Group's diversified
portfolio comprises businesses in high-growth sectors, including food delivery, online
classifieds, payments and fintech, etail, online education, and social and internet
platforms.
Safeguarding its employees, customers and businesses
The Group has monitored COVID-19-related developments in its markets and has
implemented measures to limit the potential spread of the virus among its employees, its
customers and persons connected to its businesses. The Group early-on implemented
work-from-home policies and travel restrictions for its employees to help protect the health
of its employees and those around them. For those employees directly serving customers,
the Group has implemented measures designed to safeguard both them and its customers.
In addition, the Group has implemented measures to support the key partners of its
businesses.
- Food delivery: the Group has implemented several initiatives, including iFood
making available over R$50million in support to restaurants and couriers in Brazil
affected by COVID-19. In some instances, the Group's businesses have also:
waived commissions charged by it to restaurants; reduced restaurant payment
cycles to boost restaurants' liquidity; provided masks, gloves and thermal checks
for "delivery-only kitchen" staff; and provided best practice guidelines for the
health and safety of restaurant staff and couriers.
- Classifieds: the Group has: extended payment and delivery services to more
categories of users, where possible; offered cameras to users for virtual real estate
tours; and piloted car inspections by video in some of its automotive businesses.
To support sellers on some of its marketplaces, the Group has extended the
duration of listings and provided financial relief to support their ongoing business
viability.
- Payments and fintech: PayU has rolled out a number of initiatives to help
merchant partners across its markets, including “Startups helping Startups”, which
allows businesses to collaborate to support COVID-19 efforts. These initiatives
include collecting donations for hospitals at points-of-sale, and rolling out free
digital training webinars on how merchants can adapt to trading online.
- Etail: eMAG is offering customers alternative ways to receive their purchases.
These include enabling customers to collect their goods from hundreds of
conveniently located lockers, which are sanitised multiple times a day, and
contactless delivery, where drivers deposit packages outside customers’ homes.
eMAG is also adding new offline retailers to its marketplace to help drive business
for them.
The Group continues to respond to the developing situation, adhering to official guidance
and applicable law and regulation to limit the potential spread of COVID-19.
Supporting the communities in which it operates
The Group is taking action at a group level and at a local company level to support its
communities, particularly where it can use its technological expertise, global networks and
resources to contribute to the response to COVID-19.
- Swiggy has launched a campaign to donate meals to persons in need in India. The
public can also donate to this campaign. The campaign is currently donating
approximately 35,000 meals per day, with a goal of distributing approximately
500,000 meals per day in the short-term.
- OLX is using its marketplace to help find homes for doctors and arrange
transportation for the elderly, and is moderating fake advertisements.
- Codecademy has awarded 85,000 scholarships to learners in more than 80
countries to the Pro version of its course catalogue, and BYJU’S has offered its
learning platform for free in India.
Prosus's parent company, Naspers, is contributing ZAR1.5 billion (US$82 million) in
emergency aid to the South African government’s response to COVID-19. Naspers was
founded in South Africa over 100 years ago and it is committed to working with the South
African government and civil society to help overcome the impact of COVID-19 and make
a difference in the country. Naspers will contribute ZAR500 million (US$27.3 million) to
the Solidarity Response Fund and will buy ZAR1 billion (US$54.7 million) worth of personal
protective equipment and other medical supplies in China and fly these to South Africa
The Group continues to encourage the entrepreneurial and innovative spirit of its local
teams to identify additional opportunities to put its capabilities and expertise to work
across the world.
Business and financial impact
The Group's leadership team is in communication with its businesses to anticipate the
impact of COVID-19 on operations. It is still too early to estimate the scope of any impact,
whether positive or negative, on the Group's operations and financial information,
particularly in view of rising global infections and evolving government responses to the
outbreak. The size of the impact on operations will vary across sector and geography. The
Group intends to continue to invest in its businesses to position them for future recovery.
Importantly, the Group believes that it faces this challenging period from a position of
relative financial strength and with sufficient liquidity to both navigate the changing
environment and seek out new opportunities. The Group closed its financial year on 31
March 2020 with more than US$4 billion in net cash and a US$2.5 billion undrawn revolving
credit facility in place. Prosus's bond offering in January 2020 successfully priced US$1.25
billion 3.680% notes (due 2030) to raise proceeds to redeem its US$1.0 billion 6.000%
notes that were due in July 2020. The Group has no debt maturities due until 2025.
- The Group's largest investment, Tencent, continues to grow off a very large base
and in a market, China, which appears to be emerging well from the impact of
COVID-19.
- In classifieds, the Group has seen a decline in traffic to its marketplaces. The
Group, however, has taken a number of steps to assist customers and partners
during this time. In the short-term, the Group expects to experience a negative
impact on revenue and profitability in its Classifieds businesses.
- In payments and fintech, the Group's European businesses appear to be resilient.
That, however, may change. It remains too early to estimate the impact of the
recent lockdown in India on its Payments and Fintech business. India represents
more than 50% of its Payments and Fintech business's transaction volume in
payments and has initially seen a significant drop in transaction volume. In time,
the payments and fintech business is expected to benefit across its markets from
large sectoral trends, including more customers transacting online and more online
transactions being executed through alternative forms of payment (rather than
cash).
- In food delivery, while the Group is experiencing an increased demand for food
delivery across its portfolio, it has not always been able to meet that demand due
to supply issues as restaurants close. In India, Swiggy is permitted to continue to
operate during the lockdown in India. The lockdown in India has, however, not been
implemented uniformly across the country and Swiggy's service has been halted in
some regions. Swiggy is engaging with the national and regional authorities in India
to ensure the uniform implementation of the lockdown. In Brazil, iFood’s efforts to
assist its restaurant and food delivery partners has helped mitigate some of the
supply issues and, at this stage, order volume is holding up well. In the longer-term,
the Group believes that it is likely that the current environment may drive a
structural shift in global consumption patterns in favour of food delivery.
- In etail, while eMAG’s main market of operation, Romania, entered a lockdown on
26 March 2020, the business is holding up well at this stage.
All of the Group's businesses have continuity plans in place. The Group is actively assessing
potential impacts and supporting its businesses as they take appropriate, market-specific
action as needed. The challenges of COVID-19 will vary by sector and geography, but the
Group believes it has the teams, the resources and the experience required to navigate
them successfully. The Group believes it will emerge from this period well-placed to
continue to deliver long-term growth in the markets it serves.
To give further context to the impacts of COVID-19 on the Group's businesses,
Prosus invites shareholders to attend a conference call tomorrow, Thursday, 9
April 2020 at 15:00 CET. To access the call please pre-register here. Once
registered, participants will be provided with the information needed to join the
conference, including the dial-in numbers and a passcode. It is also
recommended that participants dial-in 5 to 10 minutes prior to the start time to
ensure sufficient opportunity for assistance, should it be required. The recording
of the call will be made available on the website, www.prosus.com.
Amsterdam, the Netherlands
8 April 2020
JSE sponsor: Investec Bank Limited
Enquiries:
Investor Enquiries +1 347 210 4305
Eoin Ryan, Head of Investor Relations
Media Enquires +44 207 251 3801
Sarah Ryan, International Media Relations
Further information
This announcement contains inside information for the purposes of article 7(1) of the
Market Abuse Regulation (596/2014/EU).
Forward-looking statements
This announcement contains certain statements that are, or may be, forward-looking
statements. Forward-looking statements are prospective in nature and are not based on
current or historical facts, but rather on assumptions, expectations, valuations, targets,
estimates, forecasts and projections about future events, and are therefore subject to risks
and uncertainties which could cause actual results, performance or events to differ
materially from the future results, performance or events expressed or implied by the
forward-looking statements. All statements other than statements of historical facts
included in this announcement may be forward-looking statements. Without limitation,
forward-looking statements often include words such as “targets”, “plans”, “believes”,
“hopes”, “continues”, “expects”, “is expected”, “objective”, “outlook”, ”risk”, “seeks”,
“aims”, “intends”, “will”, “may”, “should”, “would”, “could”, “anticipates”, “estimates”, “will
look to”, “budget”, “strategy”, “would look to”, “scheduled”, “goal”, “prepares”,
“forecasts”, “is subject to”, “projects” or words or terms of similar substance or the
negative thereof, as well as variations of such words and phrases or statements that
certain actions, events or results “may”, “could”, “should”, “would”, “might”, “probably”
or “will” be taken, occur or be achieved.
By their nature, forward-looking statements involve risk and uncertainty, because they
relate to events and depend on circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this announcement could
cause actual results and developments to differ materially from those expressed in, or
implied by, such forward-looking statements. Many factors could cause actual results to
differ materially from those projected or implied in any forward-looking statements. Due
to such uncertainties and risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date of this announcement. Any
forward-looking statements made in this announcement on behalf of Prosus are made as
of the date of this announcement based on the opinions and estimates of Prosus and no
assurance can be given that such opinions or estimates will prove to have been correct.
All forward-looking statements contained in this announcement and all subsequent oral or
written forward-looking statements attributable to Prosus or its directors, officers, advisers
or employees or any person acting on any of their behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section. No person
provides any representation, warranty, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this announcement will
actually occur. Other than in accordance with its legal or regulatory obligations, Prosus is
not under, and does not undertake, any obligation, and expressly disclaims any intention
or obligation, to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Financial data
None of the information in this announcement has been reviewed by the auditors of Prosus.
Figures in this announcement are based on information sourced from the financial
statements of the Group as of, and for the financial year ended, 31 March 2020 and the
related notes thereto. These figures have not been audited or reviewed, and are subject
to adjustment and audit.
No profit forecasts or estimates
No statement in, or referred to in, this announcement is intended as or shall be deemed
to be a profit forecast or estimate for any period. No statement in, or referred to in, this
announcement or should be interpreted to mean that income of persons (where relevant),
cash flow from operations, free cash flow, earnings or earnings per share for Prosus for
the current or future financial years would necessarily match or exceed the historic
published cash flow from operations, free cash flow, earnings, earnings per share or
dividend for Prosus.
Rounding
Certain figures in this announcement, including financial data, have been rounded.
Date: 08-04-2020 05:45:00
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