SEEK sells growing South American operations for $127.7m to reduce debt

SEEK sells growing South American operations for $127.7m to reduce debt

Photo: Eric Prouzet via Unsplash

Global online jobs portal SEEK (ASX: SEK) is selling its South American operations, both of which performed strongly in the latest half year, as the company looks to cut back on debt.

SEEK says it has entered into a binding agreement to sell its 98.2 per cent interest in OCC Mexico and its 100 per cent interest in Catho Online (Brasil Online) to Spain-based Red Arbor Holding, which is among the biggest recruitment companies in Latin America.

Redarbor is paying US$85 million ($127.7 million) cash for the businesses, although US$20 million of this will be held in escrow as security against certain representations and warranties given by SEEK in connection with the transaction.

SEEK expects the deal to be settled by the end of June with the proceeds applied to reducing debt which stood at $1.1 billion at the end of December

However, the sale will lead to SEEK recording a net loss after tax of between $15 million and $35 million in its FY24 full-year accounts.

The loss will comprise the cash proceeds less carrying value, provisions for warranties, transaction costs and tax impacts.

OCC Mexico posted a 17 per cent increase in EBITDA in constant-currency terms as revenue grew through yield. At Brasil Online, revenue increased moderately, while costs fell by 17 per cent.

However, SEEK reported a group net profit after tax of $35.2 million in the first half of this financial year, down 74 per cent from $135 million a year earlier. The result came on the heels of a 5 per cent fall in revenue to $596.8 million.

The latest financial results of OCC Mexico and Brasil Online will be recorded in the FY24 full year results as discontinued operations.

SEEK says the sale will not affect its FY24 guidance.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Netflix NT drama series Territory to debut in October

Netflix NT drama series Territory to debut in October

Netflix is set to launch its next blockbuster Australian drama seri...

American Express to pay $8m fine over inappropriate targeting of co-branded David Jones credit cards

American Express to pay $8m fine over inappropriate targeting of co-branded David Jones credit cards

American Express Australia (Amex) has been ordered to pay an $8 mil...

Results from Juukan Gorge show 47,000 years of Aboriginal heritage destroyed in mining blast

Results from Juukan Gorge show 47,000 years of Aboriginal heritage destroyed in mining blast

Aboriginal and Torres Strait Islander readers are advised this arti...

From Michael Hill to Adore Beauty, retailers rise on positive sales results

From Michael Hill to Adore Beauty, retailers rise on positive sales results

A handful of retailers including jeweller Michael Hill Internationa...