Prosus FY - Ecommerce Solid Print

Yesterday Prosus released solid looking numbers. When Prosus releases numbers, we like to focus on their 'rest of business' figures because we already know what is happening with Tencent.

Ecommerce (food delivery, classifieds, fintech, online retail) grew revenues by 54% while the loss lessened to $277 million from $660 million last year. Free cash flow went from minus $353 million to +$126 million; an important sign of the quality of the growth. Over 60% of their e-commerce businesses are now profitable.

An independent firm has valued the e-commerce segment at $39 billion, up 77% from last year. That represents around one quarter of the market cap. Of course, if you consider the current discount to NAV, currently sitting at close to 40%, some would argue that the market has given the e-commerce business a zero value.

I am not going to delve into the discount and the complex "solutions" they are using to alleviate the discount. You can watch CEO Bob van Dijk skip around some tough questions about that on Bloomberg yesterday.

The e-commerce numbers looked very solid. Here at Vestact we are not worried that the overall business runs at a loss, we have seen other businesses of the same nature (Amazon) run at a loss for ages while they built scale. They are in all the right places and we expect this part of the business to continue to thrive.