The E-commerce division of Prosus NV is expected to see a massive surge in adjusted profit, with Fabricio Bloisi recently appointed as the company's CEO. The company estimates the earnings before interest and taxes (EBIT) to hit $400 million in the year to end in March from $38 million in the previous financial year. This significant increase means that the division earned a profit for the first time, with the company seeking expansion as its goal.
Bloisi, who outlined his initial strategy during his first 100 days in office, emphasises the necessity for a robust and profitable core e-commerce business. The executive aims to build on recent revenue acceleration observed in the first half of the year, where e-commerce revenue growth outpaced expectations, generating three times the adjusted EBIT compared to the previous fiscal year. Bloisi remains optimistic that this growth trajectory will continue, focusing on enhancing profitability and free cash flow across the group.
Prosus, a spinoff from Naspers Ltd., has encountered challenges stemming from a complicated business structure. This complexity has been a concern for Bloisi, particularly given the company's significant investment in Tencent Holdings Ltd., which notably influences Prosus's stock performance. Tencent's dominance presents risks in a shift of market conditions, affecting the worth of multiple Prosus online operations.
With a current valuation of roughly $100 billion, Bloisi wants to double that figure by acquiring high-growth, highly profitable businesses within the Prosus ecosystem. The CEO clarifies that the company must provide real returns to its shareholders, including innovative business development and exploration of new markets.
Prosus is ready to take advantage of the growth perspectives, especially in the Indian market. Swiggy, an India-based online food delivery platform, just declared its IPO plan, and according to Bloisi, more subsidiaries in India will go public within the next 12 to 18 months. This could create value for Prosus, improving its investment positioning in one of the biggest markets globally.
The company has also taken proactive steps to streamline operations and maximize efficiency. In recent transactions, Prosus sold its stake in Trip.com for $1.5 billion and divested its online fashion retailer Superbalist in South Africa. Additionally, an agreement to sell its Romanian food delivery service, Tazz, aligns with Bloisi's strategy to concentrate on core businesses and increase market competitiveness.
Prosus is integrating artificial intelligence across its business units amid these strategic shifts. The online food delivery service IFood, previously led by Bloisi, achieved a milestone of 100 million monthly orders, showcasing the potential of leveraging technology for operational efficiency. The CEO's commitment to AI integration aims to enhance service delivery and optimize customer engagement.