“Yandex” earned against the outflow – Business – Kommersant

According to the results of the three quarters of 2022, Yandex’s net profit more than tripled: from 1.34 billion to 5 billion rubles, follows from the company’s financial statements. In Yandex itself, such indicators are associated with the effect of the low base in 2021, when the cost of investing in Yandex Market and other areas was significant. Among the factors that could affect financial performance in the future, the company notes an increase in staff retention costs in the context of a general outflow of specialists from Russia.

“Kommersant” got acquainted with reporting “Yandex” for July-September 2022. The company reported a 46% YoY increase in total revenue to RUB 133.2 billion. The adjusted net profit of “Yandex” in the third quarter was 5 billion rubles. against 1.34 billion rubles. for the same period last year, adjusted EBITDA – 20 billion rubles. (an increase of 3.5 times year on year). Yandex attributed the more than three-fold increase in net profit to the low base effect of the previous period, caused by investments in the development of Yandex Market and other areas in 2021. This is Yandex’s first report after the September asset swap with VK, but the deal was closed at the end of the reporting period and had little effect on quarterly figures.

The revenue of the Search and Portal group, which includes geolocation services, grew to 60.9 billion rubles. (+45% yoy), adjusted EBITDA — 20.9% (+61%). Yandex names its advertising network as a growth driver, according to the company, the advertising market in Russia has stabilized, and local advertisers have already redistributed their budgets. The total search share of Yandex reached 62% (+2.7 percentage points yoy).

Revenue of services of e-commerce, mobility and delivery grew to 63.3 billion rubles. (+49%), the unprofitability of the segment decreased by 77% (adjusted EBITDA amounted to -2.4 billion rubles). billion rubles

The financial statements do not disclose net profit or loss by segments. Kommersant requested this data from Yandex, but the company refused to provide it.

Assessing the prospects for the fourth quarter, Yandex assumes that the deal with VK may negatively affect the growth of search services revenue and the profitability of delivery services.

Yandex will be able to neutralize the consequences of the deal with VK by optimizing part of the costs after the merger in the food delivery segment, as well as by growing in other business segments, Denis Buivolov, an analyst at BCS World of Investments, believes. “We don’t see any critical moments in the short-term deterioration of margins due to asset swaps,” he says.

Also, the consequences of mobilization are yet to be seen, according to Yandex.

In September, the company, whose shares on NASDAQ were frozen after the start of Russia’s military operation in Ukraine, has already announced the replacement of options for cash payments, the cost of which amounted to 4.7 billion rubles.

Staff costs are also expected to rise in the medium term. The company’s report indicated that a rise in “undesired developer churn” has made it harder to hire and retain employees. “Yandex”, having lost the opportunity to give options to employees, has lost “one of the most powerful tools for retaining employees,” said Karen Kazaryan, CEO of the Internet Development Institute. At the same time, he believes that Yandex will be able to retain the ability to expand the staff, including in non-material ways: “The company has always been strong with interesting tasks and flexible organization of work, and is also loyal to remote work.”

Yuri Litvinenko