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Today, Mail.Ru Group published its annual report and audited segment results for 2012, as well as preliminary unaudited data on segment revenue for Q1 2013.
Main financial and operational indicators
– In Q1 2013, the company’s total segment revenue grew by 29.4% compared to the same period last year, reaching 6.25 billion rubles.
– The main growth drivers were contextual advertising and MMO games. Revenue from these increased by 47.9% and 41.5% respectively.
– There was an improvement in the growth rate of media advertising, with revenues increasing during the period.
– The monthly audience of the Mail.Ru portal in March 2013 was 34.7 million users.
– The daily audience of the social network Odnoklassniki in March 2013 was 39.3 million users.
– The company’s total segment revenue amounted to 21.15 billion rubles, total segment EBITDA was 11.53 billion rubles, and net profit totaled 8.55 billion rubles.
– Mail.Ru Group’s income from investments in strategic assets — “VKontakte” and Qiwi — decreased in 2012 by 13.7% to 291 million rubles.
Maksim Klyagin, analyst at UK “Finam Management”:
The Mail.Ru Group report can generally be assessed as very positive. In the last reporting period and for 2012 as a whole, the group demonstrated solid results. Despite a reduction in advertising inventory, the company maintained a high growth rate in key financial indicators. The slowdown in sales growth in Q1 is a moderately negative factor, but we expect growth rates to pick up in the medium term. We believe the report will support stock prices in the medium term. Investors interpret the published data positively. Today the shares are trading in a strong upward trend and have already gained more than 3%.
The correction observed in recent months is mainly due to the overall unfavorable market environment and relatively low stock liquidity.
The decline in VKontakte’s net profit is generally a neutral factor for a fast-growing innovative company. The main pressure on profitability came from rising costs related to business expansion, which is undoubtedly a justified development strategy in a competitive and dynamic market, creating a solid foundation for profit growth and increased shareholder value in the medium term.
