Page 194 - RusRPTApr23

December 2021 to state-run insurer Sogaz, which is part-owned by a long-time ally of President Vladimir Putin, banker Yuri Kovalchuk, whom Putin has publicly called a personal friend.
Later Vladimir Kiriyenko became the CEO of VK; he is the son of former Prime Minister Sergei Kiriyenko, who currently serves as the first deputy head of the presidential administration.
VK, originally known as Vkontakte (“In contact” and the Russian analogy to Facebook), was founded in 2006 and has since grown to become one of the most popular social media platforms in Russia and other parts of the world. The platform boasts over 500mn registered users and has been a significant player in the social media space for many years.
After going on an acquisition binge as other internet companies were forced to dump assets or break their businesses up thanks to sanctions, the company's financial performance took a hit.
VK’s revenue grew by 19% in 2022 to RUB97.8bn ($1.3bn) thanks to a 29% rise of online advertising sales to RUB56.9bn. The adjusted EBITDA gained 8.9% to RUB20bn with an EBITDA margin of 20.4%, according to the company’s financial statement.
VK’s personnel costs widened to RUB38.8bn in 2022 from RUB27.9bn a year earlier, and its total operating expenses grew to RUB83bn from RUB65.7bn.
BCS analysts expect VK’s revenue to expand by an 8% compound annual growth rate (CAGR) in 2023–2026 to RUB133bn in 2026, including RUB81bn from online advertising with a 9% CAGR; RUB12bn from EdTech with a 2% CAGR; and RUB20bn from internet value-added services with a 5% CAGR, Prime reports.
VK’s operating costs will grow in 2023-2026 with a 7% CAGR to RUB107bn in 2026 with an average EBITDA margin of 21.9% and adjusted EBITDA of RUB32bn in 2026 with a 12% CAGR in 2023-2026, according to BCS analysts.
“The key economic risk, from our point of view, is return on investment on the new initiatives. For an economically tangible scale and the provision of high-quality services, large resources may be required, which can negatively affect margins in the short and medium term,” BCS’ Konstantin Belov said in a note.
● Wildberries
Wildberries, the Russian online marketplace, is set to launch its own line of electronics and household appliances, business daily Vedomosti reported on March 21.
194 RUSSIA Country Report Russia April 2023 www.intellinews.com