Page 90 - RusRPTJune18

protection for transmitted data, strict internal policies for data access, ongoing security testing of its infrastructure and more,” the company said in a statement. “With this new set of measures, Kaspersky Lab aims to significantly improve the resilience of its IT infrastructure to any trust risk – even theoretical ones – and to increase its transparency to current and future clients, as well as to the general public.”
One of Russia's "big four" mobile operators Mobile TeleSystems (MTS) increased the share in Cyprus-registered Ozon Holdings from 13.65% to 16.66%, Vedomosti daily said on May 14. Ozon is one of Russia's largest and oldest e-commerce platforms, first starting operations in 1998 as online bookstore. MegaFon mobile operator has just established a joint venture MF Technologies to control Mail.ru internet major, together with country's third largest bank Gazprombank and USM Holdings of billionaire and tech investor Alisher Usmanov. Russia's largest bank Sberbank and internet major Yandex announced finalising the Yandex.Market deal . Reportedly MTS acquired two minority stakes in Ozon, 0.35% acquired from former general manager Bernard Luke and 2.65% from Index Ventures fund. Previously in March MTS spent RUB1.15bn on additional share issue of Ozon of 2.5% of share capital. Previous reports suggested that Ozon could issue more shares worth RUB3.5bn to be acquired by MTS and Baring Vostok Capital Partners.
Mail.ru Group reported the first quarter of 2018 results on May 5. EBITDA missed the consensus by 16%, excluding the recently acquired ESforce, despite solid top-line growth (up 27% y/y). Most of the EBITDA weakness owed to cyclical marketing investments in the new services (mainly Pandao and Youla) and to support game launches. Given that investments peaked in the first quarter of 2018 , according to the management, and also that revenue growth should accelerate in the second half of 2018 as they pay off, we should see an overall improvement going forward. There is also now more structural pressure on margins due to a higher share of mobile and console games, a shift to direct ad sales for part of Mail.ru's inventory and a new monetization tool for groups in VK. However, all these changes are accretive to EBITDA in absolute terms. We reiterate our positive stance on the stock. Top line in the first quarter of 2018 boosted by ad revenues, games and new projects. Mail.ru's total revenues grew by 28% y/y in the first quarter of 2018 , while EBITDA slid 20% to R4.0bn (for a 24.2% margin). Excluding ESforce, revenues rose 27% and EBITDA was down 19%. The drivers of the top-line growth were the ad segment (up 40%), games (up 29%) and "other" revenues (up 120%). The latter category includes the ready-made meal delivery service Delivery Club (up 55%), mobile-first classifieds Youla, and Pandao, a marketplace for Chinese goods. VK's revenues continued rising, gaining 60%. Mail.ru's total revenues excluding VK were up 24%. In games, the growth continued to be driven by expansion abroad: international revenues now account for 59% of the total, up from just one third in 1the first quarter7. Pandao further grew its MAU to 6mn in the first quarter of 2018 from 5.5mn in February, while Youla's MAU increased to 25mn (from 24mn in the fourth quarter of 2017). EBITDA miss in the first quarter of 2018 due to tactical increase in investments. The EBITDA drop was mainly related to the hike in marketing spending (up 81%) as the company aimed to spur growth of its new projects and support new game launches. The management claims the investment cycle peaked during the quarter and thus expects cost pressure to abate going forward, while growth should accelerate in the second half of 2018 as investments pay off. We also see structural pressure on profitability in games (due to a growing share of mobile and console) and VK (owing to the
90 RUSSIA Country Report June 2018 www.intellinews.com