Seek shares take hit on $141m Zhaopin writedown
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More news: Seek's share price took a hit after the job listings platform said it would recognise a $141 million impairment charge relating to its investment in Chinese business Zhaopin.
Seek shares were down 3% to $19.92 by 12:05pm AEST and over the last 12 months has plummeted 16.4%.
Zhaopin has only seen a modest recovery since the easing of Covid-19 restrictions in January 2023.
Seek flags $141m Zhaopin writedown
The news: Job listings platform Seek will write down the value of Chinese business Zhaopin as the country’s economy recovers at a much slower pace than had been expected.
The numbers: Seek said it will recognise a $141 million total impairment charge related to its investment in Zhaopin in its FY24 results due to be released next month.
As a result, Seek’s carrying value of the equity-accounted investment will be $433 million.
Zhaopin’s revenue has declined along with near-to medium term revenue and cash flow forecasts. Seek’s adjusted net profit after tax will be impacted by approximately $5 million relative to FY23 due to a lower share of earnings from Zhaopin during the period.
Seek shares were trading 2.5% lower at $20.02 in early trading on the ASX.
The context: Seek attributed the impairment to Zhaopin not seeing a quick broad-based growth in China following the easing of Covid-19 restrictions in January 2023. Instead, recovery had been modest, with no clear visibility on sustained recovery in the white collar market in which Zhaopin operates.
The source: ASX announcement
