Prosus NV reported a surge in adjusted EBITDA to $1.05 billion, more than doubling profit and beating analyst expectations. The tech investment company’s growth was fueled by strong performance in its e-commerce businesses and a rising valuation of its stake in China’s Tencent Holdings. Shares rose 2.8% in Amsterdam, though they remain down 27% for the year, reflecting ongoing market skepticism.
CEO Fabricio Bloisi is aggressively reshaping the portfolio, spending $6 billion in Europe and $2 billion in Latin America on acquisitions. Key deals include the €4.1 billion purchase of Just Eat Takeaway.com and a €400 million investment in French health-tech firm Alan. Bloisi is betting heavily on food-delivery platforms, aiming to gain market share across Latin America, Europe, and India, and expects growth to resume within months.
The company is simultaneously reducing its massive Tencent stake, using proceeds for share buybacks to narrow a persistent valuation discount. This discount, caused by the outsized Tencent holding, has long depressed Prosus’s market value relative to its assets. Bloisi argues the discount will naturally shrink as investors recognize Prosus as a profitable European champion, with core earnings per share rising 24% to $3.77.
What to watch next: Whether Bloisi’s acquisition-heavy strategy can deliver sustained organic growth and further narrow the Tencent-driven valuation gap, especially as the company continues to sell down its stake.
Key Takeaways
- Prosus’s adjusted EBITDA doubled to $1.05 billion, beating forecasts on e-commerce and Tencent gains.
- CEO Fabricio Bloisi is executing a bold acquisition spree, spending $8 billion across Europe and Latin America.
- The company is actively selling Tencent shares to fund buybacks and reduce a persistent valuation discount.
- Core earnings per share rose 24%, signaling improved profitability from the restructured portfolio.
Insights & Analysis
- Bloisi’s strategy mirrors a classic conglomerate discount play: use cash from a mature asset (Tencent) to fund high-growth bets, but execution risk is high given the scale of acquisitions.
- If the Tencent stake continues to be monetized and buybacks accelerate, Prosus could re-rate significantly, but market patience with the discount may be limited without clear operational milestones.