July 13, 2024


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Education tech, advertising lift Russia’s Mail.ru revenues

The logo of Russian Internet company Mail.ru Group is seen on the facade of its headquarters in Moscow, Russia June 26, 2019. REUTERS/Maxim Shemetov

July 29 (Reuters) – Russian internet group Mail.ru Group (MAILRq.L) said on Thursday its second-quarter revenue rose 17.4{13aab5633489a05526ae1065595c074aeca3e93df6390063fabaebff206207ec} to 29.99 billion roubles ($409 million), boosted by a recovery in the online advertising market and demand for education technology.

Mail.ru, which owns the popular Vkontakte and Odnoklassniki social networking websites, expanded its e-commerce services and games division last year as the pandemic boosted demand for online purchases and entertainment.

Pandemic-related lockdowns in the same period last year meant the company was combating highly differing base effects across its various businesses, CEO Boris Dobrodeev and board chairman Dmitry Grishin said in a joint comment.

Mail.ru said its net profit from consolidated subsidiaries declined 33.2{13aab5633489a05526ae1065595c074aeca3e93df6390063fabaebff206207ec} year on year to 2.29 billion roubles and earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 10.5{13aab5633489a05526ae1065595c074aeca3e93df6390063fabaebff206207ec} to 6.66 billion roubles following investments in business development.

Net loss, including joint ventures, was 2.13 billion roubles compared to profit of 1.26 billion roubles a year ago, mainly because of its loss-making joint venture with Russia’s largest lender Sberbank (SBER.MM).

Mail.ru and Sberbank were earlier this year on the verge of dividing assets in the venture, which encompasses food delivery app Delivery Club, ride-hailing service Citymobil and other assets, sources told Reuters.

The company confirmed its guidance for this year. Earlier it said it expected revenue to grow by 18{13aab5633489a05526ae1065595c074aeca3e93df6390063fabaebff206207ec}-21{13aab5633489a05526ae1065595c074aeca3e93df6390063fabaebff206207ec} to 127 billion to 130 billion roubles in 2021 and its EBITDA margin to increase compared to last year.

BCS Global Markets analysts described the results as mixed, putting the growth deceleration and EBITDA drop down to the tough comparison base and investments in smaller units, such as edtech, which saw an 87.8{13aab5633489a05526ae1065595c074aeca3e93df6390063fabaebff206207ec} revenue jump to 2.17 billion roubles.

Mail.ru rival Yandex (YNDX.O) on Wednesday lifted its guidance after strong second-quarter results, saying revenue this year should now be between 330 and 340 billion roubles. read more

($1 = 73.2905 roubles)

Reporting by Anna Rzhevkina and Alexander Marrow; Editing by Edmund Blair and Barbara Lewis

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