Page 109 - RPTRusFeb17

see the investment planned by Renova as high, noting that the cost of 1ha of greenhouses is about €2mn less infrastructure and land costs, and warning about the lack of qualified labour for large greenhouse projects. In 2016, 160ha of new greenhouses were commissioned in Russia, lagging behind the 260-280ha planned under the government's import substitution plan. In November 2016, Russian agricultural major RosAgro announced the freezing of a RUB24bn greenhouse project because government support for the project was below expectations. The size of RusAgro's project is the same as renova's at 100ha.
9.2.7 TMT corporate news
EPAM has signed a multi-year strategic framework agreement, valued at over $300mn, with UBS. Analysts estimate that EPAM earned around $140mn from its major client UBS over the twelve months ending in September 2016 (4Q15-3Q16). EPAM has not disclosed the contract duration. In November 2016, UBS signed a similar contract with Luxoft with a minimum target spend of $300mn over three years. We think that this latest agreement mainly outlines the minimum guaranteed revenues which EPAM might earn from UBS during the coming years.
Russia's internet services major Yandex (anchor service Runet's largest search engine) posted 27% year-on-year revenue growth to RUB75.9bn (€1.23bn) in 2016, the company said on February 16. The revenue growth outpaced 18% seen in 2015. "Yandex's 4Q16 results showed persistently strong growth momentum, which exceeded the consensus forecasts," VTB Capital commented, noting, however, that adjusted Ebitda was slightly below the consensus despite the stronger top line. In the fourth quarter of 2016 alone the company's revenues increased by 22% year-on-year, slowing from 25% seen in the third quarter. Yandex's Ebitda gained 25% in 2016 to RUB26.1bn and adjusted net profit increased by 16% y/y to RUB14.1bn. Revenues increased due to both the higher number of clicks on paid advertisements (12% more y/y in the fourth quarter of 2016) and to the higher cost per click (8% more y/y). Online advertising continued to be the key source of revenues, accounting for 96% of the revenues in 2016 and 95% the fourth quarter, as well as delivering y/y growth of 25% and 20%, respectively. Yandex.Taxi remained the key source of growth for non-advertising revenues, increasing by 135% y/y to RUB2.3bn in 2016. The company's announcement emphasised the fast expansion of the Yandex.Taxi service, with the number of rides in December 2016 soaring on the year by 452%. Yandex sees high potential in services such as Yandex.Taxi and Yandex.Market and will continue to invest in those in 2017.
Russian mobile operator VimpelCom posted 2.5% year-on-year IFRS revenue growth to $2.35bn in the fourth quarter of 2016, the company said on February 27. The Ebitda gained 1.3% y/y to $910mn at a margin of 38.6% (39.1% for the same quarter of last year), while net profit jumped to $1.6bn from $58mn in October-December, when VimpelCom had to reserve $0.9bn for fines on its operations in Uzbekistan. On February 27, the company also announced plans to rebrand into VEON and hold an SPO to increase the share of the free float to over 20%. "The company's revised strategy envisions Vimpelcom Ltd transforming from a traditional player in the telecom sector into a provider of a wide range of digital services based on the VEON platform successfully launched in Italy," Gazprombank commented on February 28, adding that the rebranding will not apply to the operators local brands. The strategy expects
109 RUSSIA Country Report February 2017 www.intellinews.com