Page 91 - RusRPTJune18

switch to direct sales of some ads that used to be sold through Yandex's ad network and hence the company now books revenues on a gross basis and pays traffic acquisition costs to partners directly; and also due to revenue sharing for the new monetization tool of VK groups and with the content creators in its "Recommendations" tab). All of these new initiatives contribute to EBITDA in absolute terms and hence are value-accretive.
Russia's largest state-controlled bank Sberbank announced closing the deal with internet major Yandex and setting up the Yandex.Market joint venture . "We want to create Russian Amazon on the basis of Yandex.Market, and I very much hope we will succeed," the CEO of the bank Herman Gref is quoted as saying by Vedomosti daily on April 27. The deal is in line with Sberbank's ambitious digital strategy adopted in 2017 . The bank keeps a constant roll-out of digitally-driven innovations and on April 28 promised to enable ATMs to withdraw cash through mobile application. Currently Yandex.Market attracts more than 19mn desktop and laptop users each month, giving them access to over 20,000 domestic and international merchants and 150mn product offerings. Sberbank bought RUB30bn ($500mn) worth of Yandex.Market shares, and the two partners will hold equal shares in the joint venture, focusing on expansion in Russia, Georgia, CIS and Baltic states. The joint venture is valued at RUB60bn ($1bn). The main development directions of Yandex.Market will be an online platform securing operational, financial, and logistical services for merchants, as well as cross-border e-commerce and price comparison. In 2017 Yandex.Market sold RUB150bn worth of goods, and targets RUB500bn turnover in five years, which would need sustained 60% annual growth.
Russia's internet services major Mail.ru posted 28% year-on-year growth in revenues in the first quarter to RUB16.5bn ($262mn), but saw Ebitda decline by 20% to RUB3.99bn missing consensus expectations by 21% and pushing net profit down 32% y/y to RUB2.4bn. Previously Mail.ru margins were already under pressure due to growing investments across multiple segments, from gaming and e-sports , location-based and cross-border market places Youla and Pandao, to food delivery with Delivery Club, money transfers , and taxi market . In January-March Ebitda also declined due to high investments into new project development, and increased personnel costs that gained 47% y/y, Aton Equity commented on May 4. Aton analysts deem the results as negative for Mail.ru, but point to strong advertising revenue growth (40.3% y/y increase) that is the key positive takeaway, showing that the company has managed to improve monetisation of VKontakte social network. In the meantime Mail.ru assessment is that its investment peak is in the past, and that the second half of 2018 will be a stronger revenue period for the company. 2018 guidance of 23-28% revenue growth to RUB68.6bn-71.4bn and Ebitda of RUB21bn-22bn was reiterated.
The net profit of Russian Internet giant Mail.Ru Group fell 32.2% on the year to RUB2.406bn in January–March , as calculated under International Financial Reporting Standards (IFRS), the company said in a statement on Friday. Revenue of the company rose 27.8% on the year to 16.5bn in the period, but aggregate segment earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 20.1% to almost 4bn because of development costs, the company said quoting CEO Boris Dobrodeyev as saying. The company expected its EBITDA to fall in the first quarter, but it maintains its forecast for the annual revenue and EBITDA excluding a March US $100mn purchase of e-sports company ESforce, Dobrodeyev said. In
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