The net loss of VK for the second quarter amounted to 6.8 billion rubles. against earnings a year earlier

The net loss of VK for the second quarter amounted to 6.8 billion rubles. against earnings a year earlier, follows from the financial statements. Revenue at the same time increased by a third, to almost 30 billion rubles. mostly through advertising. VK’s debt load has increased by 48 billion rubles over the past six months, and the group, experts believe, should get ready to refinance loans. They note that the main reason for VK’s losses is development costs, and the “virtually monopoly” status in a number of “core segments” will allow profit to be restored. Investors were not embarrassed by the results of VK, but a number of analysts consider the growth of quotations in response to the current reporting unreasonable.

“Kommersant” got acquainted with the reporting of VK under IFRS for the second quarter and the first six months. The company reported a net loss for the quarter in the amount of 6.8 billion rubles. against profit of 1.4 billion rubles. in the second quarter of 2022.

VK’s quarterly revenue, however, grew by 33.5% to RUB 29.9 billion. The group names the main source of additional income sales of online advertising, which increased by 40.1% to 18.7 billion rubles. However, the revenue of social networks VK for the quarter also increased – by 36.7%, to 23.5 billion rubles. The audience of VKontakte amounted to 85 million active users per month (a year earlier – 75.7 million; Odnoklassniki – 36 million versus 37 million a year earlier). Segment adjusted EBITDA decreased by RUB 2.5 billion. year on year, up to 3.4 billion rubles: VK explains this by an increase in personnel and marketing costs.

Revenues are also growing in other segments: educational services (combines Skillbox, Geekbrains and Sferum, by 36.7%, to 3.6 billion rubles), technologies for business – by 68.9%, to 1.9 billion rubles . The exception was new business areas, which, in particular, include RuStore and VK Play, as well as VK Capsule smart speakers. The segment’s revenue decreased by 8% to RUB 1.1 billion.

The amount of outstanding loans and bonds of VK as of June 30 amounted to 172.7 billion rubles. (an increase of 48.2 billion rubles compared to the figure at the end of 2022), of which 85.9 billion rubles. (growth by 4.5 billion rubles) are attributable to a floating rate loan maturing in 2024–2029.

VK in the reporting warned about the imminent reclassification of most liabilities into short-term ones, and, as Timur Nigmatullin, an investment consultant at Finam, says, we are talking about this particular loan: “As a rule, such parameters indicate a credit line. The company should prepare to refinance or repay debt to maintain long-term liquidity.”

At the same time, the expert emphasizes that after the Dutch Prosus transferred its stake to VK, the group “actually became a state-owned company, that is, for it the credit burden and financial performance are already second-order factors.” “According to generally accepted practice, the credit rating of VK should correspond to the sovereign. Thus, the credit quality is very high,” adds Mr. Nigmatullin.

Negative financial results are mainly associated not with an increase in the debt burden, but with an increase in operating expenses by almost 14 billion rubles. for the first six months on an annualized basis, Anna Avakimyan, chief analyst at RegBlock, clarifies.

She connects the situation with the scaling of the company: “The VK IT agglomeration is in the stage of rapid development.” To improve the financial situation, the company will have to increase the pool of operating income: “However, this is implied, especially since VK is gradually becoming a monopoly in a number of key segments.”

Analysts at Renaissance Capital noted that VK has not yet received funds from the 2022 sale of My.Games and the previously held stake by Prosus, and has not provided an update regarding these transactions: “We expect a significant deterioration in consensus forecasts after the release of today’s results . Given the soft financial trends, we believe that the increase in the share price since the beginning of the year is not justified.” The price of VK depositary receipts on the Moscow Exchange by 12:32 p.m. decreased by 2.02% compared to the closing price of the previous day, to 766.2 rubles.

Yuri Litvinenko