Prosus Classifieds See Post Restriction Rebound in FY22 as OLX Brazil Regains Profitability

The internet and classifieds giant Prosus has today disclosed its results for the year ending 31st of March 2022. Highlights from the company's report include:

• Overall revenue was up 25% to $35 billion with classifieds revenue growth leading the way, rising 93% from $1.6 billion to $3 billion
• Trading profit was down -6% on a company level at 5.0 billion while classifieds trading profit increased from $9 million to $25 million
• OLX Brazil (run in a JV with Adevinta) was profitable for the first time since 2019 generating a trading profit of $24 million

Headquartered in The Netherlands and traded on the Euronext Amsterdam, Prosus is an offshoot of South African company Naspers and is the media giant's international internet assets division. Apart from running classifieds titles such as OLX Group, OLX Brazil and OLX Autos, Prosus is also active in the fields of EdTech, FinTech and e-commerce and is a major shareholder of Chinese internet firm Tencent.

In terms of online classifieds, the OLX brand is a true world heavyweight and as well as its eponymous horizontal platforms also runs several specialist real estate verticals including Otodom in Poland and the Property24 brand which is dominant in much of southern Africa. Apart from that, the company also operates OLX Brazil as a joint venture with Adevinta and is a stakeholder in both EMPG and Encuentra24 after a flurry of deal signing in 2020.

The Brazilian market rebounded well in 2022 as Prosus's share of revenue increased 27%, with the full-year consolidation of the leading real estate vertical Grupo ZAP.

The real gains for Prosus's classifieds division however were in the autos vertical where, as OLX Brazil CEO Andries Oudshoorn told delegates at the Global Online Marketplaces Conference in Miami earlier this month, the company has been hard at work digitalizing the transaction and building out in-platform financing. The direct-to-consumer approach is paying off with the revenue growth of OLX Autos at 153% ($1.6 billion) for the year.

Commenting on the company's overall results  Group CFO Basil Sgourdos said: “E-commerce revenues were up 51% and this performance is set against a stand-out performance in the prior year and significant global volatility. The macro-economic and severe geopolitical challenges in the second half of the year have presented significant headwinds.

But our operations remain strong, and with improved profitability at the core, we are investing to scale into adjacent opportunities across our segments. We believe that growth from the autos transaction businesses in Classifieds, broader on demand delivery ecosystem in Food Delivery, credit and digital banking in Payments & Fintech, and new investments in Edtech will create significant value for the Group over time.”

The non-financial metrics were strong for Prosus's classifieds over the year as well with the monthly app user-base rising 7% to 124 million and active listings across the network growing 11% to 174 million.

Prosus shares have risen 24% in valuation since the publication of its yearly report with the market seemingly pleased not only with the company's results but also with the announcement that Prosus is to sell off its shares in struggling Chinese firm Tencent in order to fund a mass repurchase of its own shares.

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