Russia’s Yandex eyes $6.5 billion revenue in 2022, sharp e-commerce growth

By Alexander Marrow and Gleb Stolyarov

MOSCOW (Reuters) -Russian internet giant Yandex on Tuesday reported a sharp drop in adjusted annual net profit, but said total revenue could surge this year to around $6.5 billion, driven in part by high turnover growth in e-commerce.

Yandex’s core advertising business, which accounted for 47% of total revenue in the fourth quarter of 2021, suffered during the early stages of the COVID-19 pandemic, but surging interest in online transactions allowed its other businesses to flourish.

Revenue, which the company expects to reach 490 billion-500 billion roubles ($6.50 billion-$6.63 billion) in 2022, jumped 54% last year to 356.2 billion roubles compared to 2020, above company guidance of 340 billion-350 billion roubles.

Yandex’s adjusted net income stood at 8 billion roubles in 2021, down 55% on a like-for-like basis including its loss-making Yandex.Market e-commerce venture.

Investments in high-growth segments, such as e-commerce and media services, curbed profit last year, Yandex said.

It expects its total e-commerce gross merchandise volume (GMV) to double in 2022, while GMV in its taxi segment, which includes ride-hailing and car-sharing, should reach 700 billion-720 billion roubles this year.

Yandex spent $600 million on e-commerce initiatives in 2021, $50 million less than its guidance, which CFO Svetlana Demyashkevich said was evidence of disciplined capital allocation.

She said Yandex finished the year with $1.4 billion in cash after paying $1 billion to buy Uber’s stakes in their joint foodtech, delivery and self-driving businesses.

“We remain well capitalized to fund our planned strategic investments,” she said.

Yandex.Market registered a full-year loss of 40.5 billion roubles in adjusted EBITDA, but Yandex was bullish on its e-commerce prospects, expecting its subscription model and logistics infrastructure to help it capitalise.

Yandex’s combined services offering should help it become one of the top three e-commerce players once the fragmented market consolidates in two to three years, TMT analyst at Gazprombank Anna Kupriyanova told Reuters.

Yandex’s Nasdaq-listed shares were up 15.2% after the results, as of 1616 GMT, also driven higher by hopes that a military conflict between Russia and Ukraine may be averted. The shares had slumped almost 13% on Friday during a sell-off in Russian assets over Ukraine concerns.

($1 = 75.4250 roubles)

(Reporting by Gleb Stolyarov and Alexander Marrow; additional reporting by Dmitriy Turlyun; Editing by Katya Golubkova, Jan Harvey and Susan Fenton)