Page 114 - RusRPTNov18

Russia's most valuable digital company Yandex might reshuffle its shareholding structure shifting 60% of the voting power to a fund controlled by Yandex CEO Arkady Volozh and other top managers with Russian citizenship, Kommersant d aily reported on October 31 citing unnamed sources. Despite beating expectations with solid third-quarter results , Yandex continues to be under pressure on rumours that the company could become state-controlled under a creeping takeover from Russia's largest bank Sberbank . Management's conference call did not provide any convincing details on the subject, while the possible takeover was unofficially endorsed by the head of Russian antimonopoly watchdog . Any shareholder reorganisation would require the approval of more than 75% of class A holders and gold share owner, Sberbank. Should Sberbank block such an initiative, it would be a strong negative signal to the investors that the bank is indeed looking to gain control in Yandex. This month the Russian government said is considering a bill that would limit the share of foreign ownership in online news aggregators to 20%, which further pressured sentiment on Yandex, operating one of the largest aggregators Yandex.Novosti. NASDAQ-listed Yandex is operated through a Netherlands-registered holding company, while its co-founder and major shareholder Volozh has a dual nationality and holds a Maltese passport.
Russia's internet major Yandex posted 39% year-on-year revenue growth in the third quarter of 2018 to RUB32.6bn ($0.5bn), with Ebitda soaring 88% y/y to RUB10.7bn and Ebitda margin up by 8.5pp y/y to 32.9%. At the end of October Yandex saw its capitalisation slashed by rumours of a creeping takeover by Russia's largest bank Sberbank . The results defied the negative sentiment with the top line and earnings in the reporting quarter were 6% and 18% above the consensus expectations, respectively. "We think that these strong results point to healthy fundamentals," VTB Capital wrote on October 29, while noting that as "the stock has been driven by non-fundamental factors of late and we have Yandex Under Review." Growth in revenues was attributed to the expansion of the taxi business and Search and Portal revenue growth of 22% by VTB Capital. Yandex also announced that in September the number of rides ordered on Yandex.Taxi exceeded 1bn. As for earnings, VTB believes that "the Ebitda outperformance was mainly due to the 36.5% y/y increase in the adjusted Ebitda of Search and Portal and the significant reduction in the losses shown by the Taxi segment, which were reported at RUB0.7bn in 3Q18 (after RUB 1.9bn in 2Q18 and RUB 3.2bn in 3Q17)."
114 RUSSIA Country Report November 2018 www.intellinews.com