VK borrowed on bonds – Hi-Tech – Kommersant

In 2022, VK ​​quadrupled its loans to RUB 82.2 billion. Thus, the company’s debt became comparable to its annual revenue, which increased by 19.3%, to 97.8 billion. The holding explained the increase in expenses and borrowings by investments in the development of new areas, as well as mergers and acquisitions. However, experts note that at the same time, VK needed a significant part of the funds to buy Eurobonds: at the end of the year, the company bought 66% of the entire issue of convertible bonds with a par value of $263 million. For this, as Kommersant reported, it received a loan from the government .

At the end of 2022, the revenue of the VK group increased (.pdf) by 19.3%, to RUB 97.8 billion, the main source of revenue growth was online advertising (segment revenue increased by 29%, to RUB 56.9 billion), adjusted EBITDA increased by 8.9%, up to 20 billion rubles, the profitability was 20.4%. The group’s total loss decreased year-on-year by RUB 12.4 billion to RUB 2.9 billion. in 2021. The company explains this by the restructuring and optimization of the group’s assets, in particular, the exit from the joint venture with Sberbank (O2O Holding; owns Citydrive carsharing and food delivery services Samokat and Kitchen in the District) and the sale of the international gaming direction My.Games for $642 million

The key point in reporting is the growth of debt, said Timur Nigmatullin, senior investment consultant at Finam. From the cash flow statement it follows that loans received in 2022 amounted to 82.2 billion rubles. against 21 billion rubles. a year earlier. “The figures are comparable to the annual revenue of 97.8 billion rubles, while it is necessary to take into account the operating expenses that the company incurs from the received revenue of 83 billion rubles,” the analyst notes, adding that the financial expenses of the group increased from 4.2 billion rubles. in 2021 to 12.4 billion rubles. in 2022

“The main business, the segment of social networks and content services, shows double-digit dynamics, but in order to achieve sustainable profitability, it would be logical to see a reduction in financial costs and debt in general,” Mr. Nigmatullin notes.

In VK, the growth of financial expenses and borrowings was explained by the active development of the holding: “These are investments in the development of existing and new products, active marketing promotion, intensive work of the holding in the M&A market.” In 2022, the company acquired short video developer Movika, production studio Medium Quality, among others. In September, the company announced a deal with Yandex, under which VK received Zen and Yandex.News, and Yandex received Delivery Club.

At the same time, VK, most likely, spent a significant part of the funds on the redemption of bonds, notes the interlocutor of Kommersant in the IT market. It follows from the company’s financial statements that it bought back about 66% of the entire issue of convertible bonds with a par value of $263 million as part of the restructuring carried out until the end of 2022. In 2020, the company placed senior unsecured convertible bonds on the London Stock Exchange in the amount of $400 million at 1.625% maturing in 2025.

After the outbreak of hostilities in Ukraine, foreign exchanges (NASDAQ, LSE) suspended trading in shares and global depositary receipts (GDRs) of VK, Yandex and Ozon. According to the issue documentation, when trading is suspended for more than a certain number of trading days in a row (ten days for VK Company Limited), a “delisting event” occurs and holders of convertible bonds of these companies have the right to early redemption. In April it became known that the government singled out “Yandex”, VK and Ozon preferential loan for a total of 130 billion rubles. to fulfill the obligations of companies to the holders of their Eurobonds.

It also follows from the VK reporting that, taking into account the transformation of the business, the “social networks and communication services” segment was reorganized into “social networks and content services”.

It included such projects as VK Calls, VK Clips and VK Video (the segment’s revenue grew by 22% to RUB 75.1 billion, EBITDA grew by 3.6% to RUB 25.3 billion). rub.). Previously, these projects were in the “New Initiatives” segment, which was reorganized into “new business areas” in the fourth quarter (includes VK Play, RuStore, Yulu, VK Capsule, Marusya voice assistant, etc.). The segment’s revenue for the year amounted to 6.3 billion rubles, down 5.9%, the loss on adjusted EBITDA increased by 66.3% and amounted to 4.3 billion rubles.

The number of developers registered on video game distribution platform VK Play, which was launched in April 2022, doubled during the second half of the year and reached 600 in December 2022, according to the report. In mid-August, VK made it possible for individual developers to publish games on VK Play – by the time the company reported, more than 300 developers had registered on the site. At the end of the fourth quarter of 2022, more than 12 million accounts were registered on the site. The monthly unique audience of the project for the last 30 days of 2022 amounted to more than 11 million users. The owner of the Kanobu portal, Gadzhi Makhtiev, called the growth dynamics understandable: “A Russian developer has few platforms for self-publishing games.”

Yulia Tishina, Yuri Litvinenko