Prosus Profit Surges on E-commerce

Prosus (PRX) has reported an increase in profitability for the first half of its financial year, a result that highlights the success of its major strategic transformation. The company has been actively evolving from a passive investment firm, largely known for its stake in Chinese tech giant Tencent, into a hands-on operator of its global e-commerce assets. This pivot involves a dual strategy – methodically selling down its Tencent stake to fund a massive share buyback programme, while simultaneously making acquisitions and investments to build out its own profitable digital ecosystems. The strong performance in H1 ending in September, fuelled by strong results from platforms like iFood and OLX, demonstrates that actively managing its portfolio is now bearing fruit and driving a strong operational turnaround.

Key Financial Metrics

●      E-commerce Revenue Growth: 14% to $3.6 billion.

This is a crucial top-line metric showing that the company’s core e-commerce businesses, like iFood, OLX, and PayU, are growing at a strong pace, ahead of their peer group. It proves that Prosus’ strategy of actively operating and scaling these businesses is successfully driving organic growth.

●      Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA): $530 million, a 58% year-over-year (YoY) improvement.

This demonstrates that Prosus is successfully transitioning its portfolio from cash-burning, high-growth startups into mature, profitable enterprises, a key goal of its transformation strategy.

●      Core Headline Earnings Per Share (HEPS) Growth: 24%.

Core HEPS is the company’s preferred measure of overall profitability, as it includes contributions from its profitable e-commerce businesses as well as its massive stake in Tencent. The strong 24% growth shows that the combination of a profitable core business and the benefits of the ongoing share buyback programme is creating value for shareholders on a per-share basis.

●      Free Cash Flow (FCF): $399 million.

This metric shows the company’s ability to generate cash from its total operations. The positive swing is driven by higher dividends from Tencent and, crucially, improved profitability from its own e-commerce businesses, which are now contributing to cash generation instead of consuming it.

●      Value Created from Share Buyback: $63 billion.

This is a measure of the value unlocked by the company’s primary capital allocation strategy. By selling its highly valued Tencent shares and buying back its own lower-valued shares, Prosus is actively closing the valuation gap and creating direct value for its shareholders. The $63 billion quantifies the success of this massive and ongoing financial movement.

●      Central Cash Position: $18.3 billion.

This represents the company’s cash on hand. A cash position of this size gives Prosus financial firepower and flexibility. It allows the company to continue its share buyback programme, make large strategic acquisitions like Just Eat Takeaway and invest in new technologies like AI, all without needing to take on new debt.

Analysis & Outlook

Prosus’ latest results highlight a successful strategic shift, showcasing its ability to build profitable, standalone businesses beyond its long-held Tencent investment. The group’s e-commerce division delivered sharply improved profitability and strong revenue momentum driven by deeper integration across platforms such as iFood, PayU and Swiggy. This transformation is being reinforced by an ambitious yet disciplined capital allocation strategy that includes major acquisitions, such as the €4.1 billion integration of Just Eat Takeaway and the $1.3 billion purchase of La Centrale, alongside fresh investments across India and Latin America. At the same time, Prosus is funding this expansion by selling non-core assets, targeting $2 billion in proceeds for the year, while the ongoing sale of Tencent shares continues to support its large-scale buyback programme, which management estimates has already created $63 billion in value. Looking ahead, CEO Fabricio Bloisi has affirmed that the group’s operating businesses are now profitable and on track to deliver $1.1 billion to $1.2 billion in EBITDA for the full year, backed by a strong $18.3 billion cash reserve that positions the company to pursue further acquisitions and invest aggressively in innovation, including more than $100 million already committed to developing agentic AI models aimed at driving the next wave of growth across its global portfolio.

Disclaimer:
*Any opinions, views, analysis, or other information provided in this article is provided by BROKSTOCK SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BROKSTOCK SA does not warrant the correctness, accuracy, timeliness, reliability, or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions, and all decisions are made at your own risk. BROKSTOCK SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss, including, without limitation, any loss of profit which may arise directly or indirectly from the use of the market commentary. The content contained within the article is subject to change at any time without notice. BROKSTOCK SA is an authorised financial services provider - FSP No. 51404. T&Cs and Disclaimers are applicable: https://brokstock.co.za/
** This article was prepared by BROKSTOCK analyst Maboko Seabi