What do Yandex’s financial results indicate?
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Yandex (MOEX: YNDX) summed up the financial results of the year – the net profit of the IT giant dropped by almost half, but the quarterly result turned out to be better than forecasts. In the last three months of 2023, revenue in the search and advertising segment grew by 45%. At the same time, the e-commerce segment showed a slowdown in growth rates, although it was this segment that allowed the company to halve the company’s loss compared to the previous quarter. In addition, the company disclosed details of the restructuring. It follows from the report that the deal to sell the Russian business of Yandex for 475 billion rubles. unanimously approved by the board of directors of the parent Dutch company. Thus, for the final completion of the process, it remains to wait for the decision on the exchange of Yandex NV shares for securities of a new structure, which is now registered in Kaliningrad.
In general, such results can be considered positive, says Sergei Suverov, investment strategist of the management company Ari-Capital: “This report is of particular interest in light of the division of the company. Yandex remains among the major Russian high-tech players that are represented on the stock market. It is also one of the fastest growing companies.
Thus, his main businesses grew by 45-50%, this is a very impressive growth. EBITDA margin also increased, which is encouraging.
The greatest growth was shown by such services as Yandex.Plus, entertainment services, ad services, and the main projects – a search engine and a taxi aggregator are also growing confidently, as are e-commerce and the company’s share in the Russian search market.
After the division, some foreign projects will go to the Dutch structure, but at the same time, the main business will remain in the domestic company, which will be managed by the Russian management team of Yandex. They also receive the most significant importance among its new shareholders. Therefore, I think that continuity will remain, at the same time, the market potential remains very high.”
In its report, Yandex said that current geopolitical tensions have created challenging conditions for the company’s business, its team and shareholders. This makes it difficult to make forecasts in the short and medium term. In general, they noted that they will continue to invest in the development of key areas, as well as pay special attention to protecting the interests of employees, shareholders and other stakeholders.
Most likely, this year Yandex may become the largest company on the Russian market, and then the new management will take care of its profitability, believes Leonid Delitsyn, an analyst at the financial group Finam: “Probably, in a year, Yandex’s profit may exceed 1 trillion rubles ., and it will become the largest company if Rostelecom does not have time. And he, of course, will already compete mainly with Wildberries and Ozon. Because, as the report says, revenue from e-commerce, ridetech and delivery has already amounted to 420 billion rubles.
That is, Yandex is no longer a search engine, but a store.
I think that in the future shareholders will change the company’s strategy and tactics, because they are not essentially strategic investors. What are their interests now? Naturally, one day I will sell this package. Although they bought the securities at a good price, half their market value, as required by the government, they remember that there were times when the shares cost about 6 thousand rubles. This means that these shareholders are very interested in ensuring that capitalization does not fall.
So, I think they will offer a favorable exchange ratio to Russian minority shareholders so that Yandex shares maintain their price on the stock exchange, and then continue to grow for two to three years and return to previous peak values.”
As reported in the press service of the IT giant, by the end of July the Dutch Yandex NV must change its name and stop using the brands of the Russian company. Several foreign startups will go to it, as well as a data center in Finland.
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