Core Classifieds Business Remains Profitable in FY23 as Prosus Sells Off Assets

The online classifieds and internet giant Prosus has released its financial results for the 12 months ended 31st of March 2023. Notable points from the Amsterdam headquartered company's missive to the market include:

• Company-wide revenue was up 16% to $4.9 billion.
• Trading loss widened 4% to $574 million.
• Core classifieds revenues grew 15% on a like-for-like basis to $486 million.

Commenting on the results, Prosus CEO, Bob van Dijk said:

“During the last 12 months we have made good progress across all of our strategic objectives. Against a challenging backdrop, the E-commerce portfolio has performed well and the open-ended buyback programme is driving improved NAV per share."

"There is much more to do, but we are on a good trajectory, we have strong momentum and remain confident in our commitment to achieve profitability in our Ecommerce portfolio during the first half of 2025.”

The past 12 months have seen a great deal of upheaval in the online classifieds portfolio of the Naspers-related firm.

In October 2022 Prosus sold Russian classifieds giant Avito for a reported $2.5 billion after coming under heavy pressure to do so. Avito generated 48 billion Rubles ($559 million) in revenue in FY21 at a 34% trading profit margin.

More recently, Prosus has announced that it will be closing its Latin American autos business OLX Autos with the company explaining in its FY23 reporting that the business has been "materially affected by macroeconomic and market challenges... similar to listed peers."

OLX Autos revenue and trading loss for the year were US$1.8bn and US$418m respectively, of which US$853m of revenue and US$216m of trading losses are included in continuing operations.

In February Prosus announced 1,500 job losses across its classifieds division aimed at reducing losses. And on a like-for-like basis, the profitability of Prosus' core classifieds business improved slightly from $65 million in 2022 to $69 million in 2023. The company said in its latest statement that the first six months of 2023 will represent the "high water mark" for trading losses with overall company profitability expected to improve.

The classifieds business, which is dominated by OLX Group, saw notable gains in the pay-and-ship services category of its generalist classifieds sites as display advertising remained soft.

As for the company's real estate verticals, they delivered a combined 29% revenue gain for the year largely thanks to longer listing durations and higher revenue per-user figures.

Prosus Classifieds Assets

Alongside the company's operations in Poland, where it is the market leader, Prosus' report highlighted OLX Brazil's performance over the 12 month period.

Prosus owns 50% of the business with the other 50% being controlled by European classifieds operator Adevinta. OLX Brazil grew revenue 16% and contributed $43 million in revenue on an economic-interest basis.

The company also stated that it has proposed a transaction to simplify the Group ownership structure through the removal of the cross-holding between Prosus and Naspers, a measure that shareholders have been demanding for some time. Prosus controversially paid $144 million in transaction fees when it bought a 49% stake in parent company Naspers in 2021.