Businesses in the Naspers group are responding to the coronavirus crisis in the communities in which they operate, ranging from food donations in India to helping find transportation for the elderly, the group said on Wednesday.
In an update on the impact of Covid-19 on its business, issued to shareholders via the JSE stock exchange news service (SENS) on Wednesday, Naspers detailed the responses of some of its businesses to the Covid-19 crisis.
The group recently announced it would donate R1.5 billion to assist the South African government, with R500 million going towards the Soliarity Fund to assist the vulnerable in society. R1 billion will be used to procure medical supplies and personal protective equipment from China, Fin24 previously reported.
In India, food delivery business Swiggy has launched a campaign to donate meals to those in need, Naspers said on Wednesday.
“The campaign is currently donating approximately 35 000 meals per day, with a goal of distributing approximately 500 000 meals per day in the short-term,” the notice read.
The public can also donate to the campaign.
The group’s classifieds business OLX is also helping the elderly find transportation. Its online education company, Codecademy, has awarded 85 000 free scholarships to learners in more than 80 countries to have access to the Pro version of its course catalogue, Naspers said.
“We will continue to focus on identifying ways in which our technological expertise, global networks and resources can be used to support the global fight against Covid-19,” said CEO Bob van Dijk.
Naspers said that so far it is “still too early” to estimate the impact of the Covid-19 outbreak on its businesses, but added that it was financially prepared to navigate the challenging environment ahead.
“The group closed its financial year on 31 March 2020 with more than $4 billion in net cash and a $2.5 billion undrawn revolving credit facility in place,” the notice read. The group has no debt maturities due until 2025, it added.
Decline in traffic
So far its largest investment, Tencent, has emerged “relatively well” from the impact of Covid-19 in China.
Naspers said that its classifieds business is experienced a decline in traffic to its marketplaces and may experience declines in revenue and profitability. “In the short term, the group expects to experience a negative impact on revenue and profitability in its Classifieds businesses,” it said.
Its payment and fintech businesses in Europe appear to be resilient, but things may change, it warned.
Naspers said it is also too early to tell how the lockdown in India may impact its payments and fintech businesses. “India represents more than 50% of its Payments and Fintech business’s transaction volume in payments and has initially seen a significant drop in transaction volume,” the notice read.
The group’s food delivery businesses, although experiencing an increased demand, are not able to meet this demand due to supply issues as restaurants are closed. “In India, Swiggy is permitted to continue to operate during the lockdown in India. The lockdown in India has, however, not been implemented uniformly across the country and Swiggy’s service has been halted in some regions,” Naspers said.
In South Africa, Mr D Food is operating at a limited capacity and delivering essential goods. “In the longer term, the Group believes that it is possible that the current environment may drive a structural shift in global consumption patterns in favour of food delivery,” Naspers said.
In the retail space, Takealot in South Africa had to cease trading to comply with the lockdown, but reopened on 30 March 2020 for the sale and delivery of essential goods.
“The challenges of Covid-19 will vary by sector and geography, but the Group believes it has the teams, the resources and the experience required to navigate them successfully. The Group believes it will emerge from this period well-placed to continue to deliver long-term growth in the markets it serves,” the statement said.
The group will hold an investor call on Thursday to further unpack the implications of the lockdown on business.
*Fin24 is part of Media24, a subsidiary of Naspers.