Press releases

28.04.2017

Mail.Ru Group Limited Annual Report and audited IFRS results for FY 2016 and unaudited IFRS results for Q1 2017

Mail.Ru Group Limited (MAIL:LI, hereinafter referred as "the Company" or "the Group"), one of the largest Internet companies in the Russian-speaking Internet market, today releases its annual report and audited IFRS results for the year ended 31st December 2016 and unaudited IFRS results and segment financial information for the three months ended 31st March.

Performance highlights

- Final audited segment results for FY 2016 are fully consistent with the preliminary trading statementGroup aggregate segment revenue of RUR 42,751m,
       -Group aggregate segment EBITDA of RUR 17,914m and Group aggregate net profit at RUR 11,616m

- Q1 2017 Group aggregate segment revenue grew 24.4% Y-o-Y to RUR 12,636 million.

- Q1 2017 Group aggregate segment EBITDA grew 10.7% Y-o-Y to RUR 4,884 million.

- Q1 2017 Group aggregate net profit grew 25.4% Y-o-Y to RUR 3,478 million.

- Net cash position as of 31 March 2017 was RUR 8,428 million.

Key Recent Developments

- Delivery Club orders doubled Y-o-Y to 718,000 in March 2017; daily orders hit a record high of 50,000.

- Delivery Club introduced curated restaurant selections and streamlined online payment process.

- Youla added full buy-side functionality that was earlier introduced in mobile apps to the web version, and rolled out advanced moderation in real estate category.

- Multiple updates of BeepCar: round trips, instant booking, comments on rides, subscription to new rides for a selected route, high price warning, view count for rides, etc.

- Launch of VK Live app for Android and integration of the streaming feature into the main VK app

- All VK platforms featured a new tool, calculating post views displayed along with likes and reposts and providing additional statistics to content creators.

- VK introduced money transfers to groups and public pages via community messages.

- Launch of VK Admin, a mobile application for SMM specialists focused on community messages.

- OK launched online stores in groups.

- OK introduced VIP-status with an access to exclusive features and services.

- OK rolled out Canvas, a new mobile advertising format, a full-screen page combining videos, panoramic images, call-to-action buttons etc.

- Launch of MMORPG Revelation Online in Europe and North America.

- Global launch of Skyforge for PS4.

- War Robots was updated with Leagues, a new matchmaking and ranking system.

- ME improved its hotel booking feature with additional details: hotel description, photos, facilities and reviews.

- Ru Group and GeekBrains launched GeekUniversity, the first Russian online-university for developers.

Commenting on the results of the Company, Dmitry Grishin, Chairman of the Board and Boris Dobrodeev, CEO (Russia) of Mail.Ru Group, said:

“We are pleased to report our final IFRS audited results for 2016 which, as in all previous years, are fully in line with the preliminary announcement in February. We are also pleased to announce we have a strong start to 2017 with Q1 revenue growth, including Pixonic and Delivery Club on a pro forma basis, of 24.4% Y-o-Y to RUR 12,636m. While we continue to invest in new projects, which at this stage are not contributing to EBITDA, we still retained a good control over costs and hence EBITDA margins were 38.6% giving 10.7% growth in EBITDA to RUB 4,884m.

Advertising revenue growth remained strong in Q1 with the trends that we saw in 2016 continuing. Despite us using a part of our inventory to boost our new mobile products advertising revenues grew 24.3% Y-o-Y to RUR 4,871m.  The fastest growing advertising revenues were in-feed advertising across the social networks and in mobile. Through 2017 we will continue to focus on the growth of mobile and video advertising and on the continued roll out of new ad technology. Engagement continues to rise across all platforms and our unique position allows us to continue to take advantage as advertising budgets continue to shift to digital, and especially mobile.

In Q1 VK continued the strong performance that we saw in FY 2016.  In Q1 revenues grew 45.9% to RUR 2,744m. Advertising continued to be the bulk of the revenues, and while VK IVAS increased in Q1, advertising revenues grew faster than total revenues.  We continue to make improvements to the platform and the user experience. In Q1 we made further updates in the smart newsfeed after which post views grew significantly. Additionally Q1 saw the roll out of VK Live and the start of money transfers to communities. Daily VK live video stream views grew 3.5x and exceeded 10m in March. Total monthly active users set a new record of 97m. Mobile usage also continued to see strong growth with a new record of over 80m mobile monthly users. 

In 2017 the focus will remain on native, and especially mobile and video advertising in the newsfeed. As previously commented we expect the ad load and pricing to continue to increase from the current levels. We continue to see significant further opportunities for VK with both an expanding user base and an increasing number of features.  As such, we retain the guidance given with the FY 2017 preliminary results in February that we will be able to double the VK revenues again over the next 3 to 4 years. 

In Q1 2017 on a pro forma basis our MMO games revenue grew 51.8% Y-o-Y to RUR 3,977m with share of international revenue for the first time exceeding one third of total MMO games revenue and hitting a record high of over 40% in March. This was driven by a combination of continued strong growth in Warface, which remains our largest game, strong continued growth in War Robots and a successful domestic and international launch of Revelation Online. The pipeline of further major releases for 2017 based around the key franchises remains very full. In April 2017 the console version of Skyforge was released.  This is the first time a free to play AAA title has been released on PlayStation and initial user feedback and results have been encouraging. Through the rest of 2017 there will be a number of additional releases including the significantly updated version of Armored Warfare and a number of both licensed and in-house developed PC, console and mobile titles. As such, we expect to see continued good growth from games in 2017.

In Q1 2017 IVAS revenues declined 1.3% which is an improvement over the declines seen in 2016.  While the shift from desktop to mobile remains a challenge, we are pleased with the initial results of the new cross-platform IVAS initiatives. There will be further new mobile products and an increased focus on the mobile UX through the year. We continue to expect that IVAS revenues will be broadly flat for FY 2017.

In November 2016 we announced the acquisition of Delivery Club. As previously stated the business has been fully integrated into the Group. Since the acquisition of Delivery Club, we have seen very significant growth in all operating metrics. In March 2017 the number of orders doubled Y-o-Y to 718,000 (with a record high of 50,000 daily orders) and the number of restaurants exceeded 5,200. We have also made a number of changes to the product to make it both easier for the user to order, and easier for the restaurants to manage and process orders. Based on the current trend lines we anticipate that the continued very strong growth in Delivery Club revenues will be seen for the rest of 2017.

Throughout 2016 our location-based marketplace Youla saw very strong user growth. This has continued in 2017 with a new high of 16.6m monthly active users and 3.0m daily active users on all platforms in April. The app remains consistently in the Top-5 overall in Russia in both the App Store and Google Play. We will continue to examine the potential of some limited monetization experiments later in 2017 however, as previously stated, the main focus will be the further driving of user numbers and engagement. In Q1 we added full buy-side functionality that was earlier introduced in mobile apps to the web version, and rolled out advanced moderation in the real estate category. User feedback remains very positive and hence we anticipate further user growth through 2017.

In Q1 2017, we launched our long distance ride sharing service BeepCar. In February the service was introduced in Russia, and later expanded to 18 more countries. It is still very early but user feedback has been encouraging and mobile app installs have exceeded 1m.

 In Q1 the cash generating capacity of our business remained unchanged and cash conversion was as expected. As a result net cash, post M&A related payments, at the end of Q1 was RUR 8,428m.

We are very pleased with the progress that the 2 acquisitions we announced in Q4 2016 have made. They fit well within the core strategy and mobile assets of the Group and present significant opportunities for the future. With a strong balance sheet and unchanged cash generation capabilities we will continue to examine further similar-sized acquisition opportunities.

We had a strong start to 2017 with good contributions from advertising, games and Delivery Club. We continue to believe we are well positioned to benefit from the ongoing structural trends in advertising. We are encouraged by the progress in games, and see great potential as Delivery Club continues to benefit from both a fast growing market, and potential increases in market share.

As such, and based on current visibility, we are pleased to increase our FY 2017 revenue guidance from previous guidance of 16–19% pro-forma revenue growth to pro-forma revenue growth of 17–21% to RUB 50.0–51.7bn. We will continue to invest in our new initiatives and do not expect them to contribute to EBITDA this year. We also do not anticipate any meaningful revenue contributions from BeepCar or Youla in 2017. Taking this into account we expect our 2017 EBITDA margin to be around 40%.”

Conference call

The management team will host an analyst and investor conference call at 9.00 UK time (11.00 Moscow time), on Friday 28th April 2017, including a Question and Answer session.

To participate in this conference call, please use the following access details:

Confirmation Code: 4341366

Participant Toll Free Telephone Numbers:
From Russia 8 800 500 9283
From the UK 0800 279 6839
From the US 800 263 0877

For further information please contact:

Investors
Matthew Hammond
E-mail: hammond@corp.mail.ru

Press
Nataliya Bogdanovich
E-mail: n.bogdanovich@corp.mail.ru

Cautionary Statement regarding Forward Looking Statements

This press release contains statements of expectation and other forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "forecast", "intend", "will", "could", "may" or "might", the negative of such terms or other similar expressions including "outlook" or "guidance". The forward-looking statements in this release are based upon various assumptions that are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and may be beyond the Group's control. Actual results could differ materially from those discussed in the forward looking statements herein. Many factors could cause actual results to differ materially from those discussed in the forward looking statements included herein, including competition in the marketplace, changes in consumer preferences, the degree of Internet penetration and online advertising in Russia, concerns about data security, claims of intellectual property infringement, adverse media speculation, changes in political, social, legal or economic conditions in Russia, exchange rate fluctuations, and the Group's success in identifying and responding to these and other risks involved in its business, including those referenced under "Risk Factors" in the Group's public filings. The forward-looking statements contained herein speak only as of the date they were made, and the Group does not intend to amend or update these statements except to the extent required by law to reflect events and circumstances occurring after the date hereof.

About Mail.Ru Group

Mail.Ru Group, international brand My.com (MAIL:LI, listed since November 5, 2010) is the largest internet business in Russia, based on mobile daily audience (TNS Mobile Index, population aged 12-64 in the cities 700 000+, February 2017, Russia).

In line with the communitainment (communication plus entertainment) strategy, the company is developing an integrated communications and entertainment platform. The company owns Russia’s leading email service and one of Russia’s largest internet portals, Mail.Ru. The company operates three of the major Russian language social networks, VKontakte (VK), Odnoklassniki (OK) and Moi Mir (My World), and Russia's largest online games, including such gaming titles as Warface, Armored Warfare, Skyforge and Perfect World. The сompany’s portfolio also includes a leading OpenStreetMap-based offline mobile maps and navigation service MAPS.ME, two instant messaging services popular in Russia and CIS, Agent Mail.Ru and ICQ, and a mobile location based marketplace Youla.

The Company owns 100% of mobile games developer Pixonic, and 100% of Delivery Club, the number one food delivery company in Russia. Mail.Ru Group also holds equity stakes in a number of small venture capital investments in various Internet companies in Russia, Ukraine and Israel.

Filing of the Annual Report for 2016 and Interim Condensed Consolidated Financial Statements for Q1 2017

The Company’s Annual Report and audited consolidated financial statements for the year ended December 31, 2016 prepared in accordance with IFRS and accompanied by an independent auditor’s report have been filed on the National Storage Mechanism appointed by the Financial Services Authority and can be accessed at https://corp.mail.ru/media/files/mail.rugrouparfy2016.pdf.

A full discussion of the Company’s 2016 results is presented on pages 47-58 of the Company’s 2016 Annual Report.

The Company's interim condensed consolidated financial statements for the three months ended 31 March 2017 prepared in accordance with IFRS and accompanied by an independent auditor's review report have been filed on the National Storage Mechanism appointed by the Financial Services Authority and can be accessed at http://corp.mail.ru/media/files/mail.rugroupifrsq12017.pdf.

Group Aggregate Segment Financial Information*

 

RUR millions

 

Q1 2016

Q1 2017

YoY, %

Group aggregate segment revenue (1)

     

Online advertising

3,919

4,871

24.3%

MMO games

2,620

3,977

51.8%

Community IVAS

3,410

3,364

-1.3%

Other revenue**

208

424

104.2%

Total Group aggregate segment revenue

10,157

12,636

24.4%

Group aggregate operating expenses

     

Personnel expenses

2,156

2,303

6.9%

Office rent and maintenance

511

512

0.2%

Agent/partner fees

1,482

2,336

57.6%

Marketing expenses

698

1,822

161.0%

Server hosting expenses

528

429

-18.8%

Professional services

108

75

-30.6%

Other operating (income)/expenses, excl. D&A

261

275

5.1%

Total Group aggregate operating expenses

5,744

7,752

35.0%

Group aggregate segment EBITDA (2)

4,413

4,884

10.7%

margin, %

43.4%

38.6%

 

Depreciation, amortisation and impairment (3)

674

796

18.1%

Other non-operating income (expense), net***

-252

123

 

Profit before tax (4)

3,487

4,210

20.8%

Income tax expense (5)

712

732

2.8%

Group aggregate net profit (6)

2,775

3,478

25.4%

margin, %

27.3%

27.5%

 

Note: Group aggregate segment financial information for the three months ended March 31, 2016 has been retrospectively adjusted to include pro-forma consolidation of Pixonic and Delivery Club from January 1, 2016.
(*) The numbers in this table and further in the document may not exactly foot or cross-foot due to rounding.
(**) Including Other IVAS revenues.
(***) Including interest expenses of RUR 437 and 12 million in Q1 2016 and Q1 2017 respectively.

- Group aggregate segment revenue is calculated by aggregating the segment revenue of the Company's operating segments and eliminating intra-segment and inter-segment revenues. This measure differs in significant respects from IFRS consolidated net revenue. See "Presentation of Aggregate Segment Financial Information" below.

- Group aggregate segment EBITDA is calculated by subtracting Group aggregate segment operating expenses from Group aggregate segment revenue. Group aggregate segment operating expenses are calculated by aggregating the segment operating expenses (excluding the depreciation and amortisation) of the Company's operating segments including allocated Company’s corporate expenses, and eliminating intra-segment and inter-segment expenses. See "Presentation of Aggregate Segment Financial Information".

- Group aggregate depreciation, amortisation and impairment expense is calculated by aggregating the depreciation, amortisation and impairment expense of the subsidiaries consolidated as of the date hereof, excluding amortisation and impairment of fair value adjustments to intangible assets acquired in business combinations.

- Profit before tax is calculated by deducting from Group aggregate segment EBITDA Group aggregate depreciation, amortisation and impairment expense and adding/deducting Group aggregate other non-operating incomes/expenses primarily consisting of interest income on cash deposits, interest expenses, dividends from financial and available-for-sale investments and other non-operating items.

- Group aggregate income tax expense is calculated by aggregating the income tax expense of the subsidiaries consolidated as of the date hereof. Group aggregate income tax expense is different from income tax as would be recorded under IFRS, as (i) it excludes deferred tax on unremitted earnings of the Company's subsidiaries and (ii) it is adjusted for the tax effect of differences in profit before tax between Group aggregate segment financial information and IFRS.

- Group aggregate net profit is the (i) Group aggregate segment EBITDA; less (ii) Group aggregate depreciation, amortisation and impairment expense; less (iii) Group aggregate other non-operating expense; plus (iv) Group aggregate other non-operating income; less (v) Group aggregate income tax expense. Group aggregate net profit differs in significant respects from IFRS consolidated net profit. See "Presentation of Aggregate Segment Financial Information".

Operating Segments

We identify our operating segments based on the types of products and services we offer. We have identified the following reportable segments on this basis:

- Email, Portal and IM;
- VK (VKontakte);
- Social Networks (excluding VK);
- Online Games;
- E-Commerce, Search and Other Services.

The Email, Portal and IM segment includes email, instant messaging and portal (main page and verticals). It earns substantially all revenues from display and context advertising.

The VK segment includes the Group’s social network VKontakte (VK.com) and earns revenues from (i) commission from application developers based on the respective applications’ revenue, (ii) user payments for virtual gifts and stickers, and (iii) online advertising, including display and context advertising.

The Social Networks (excluding VK) segment includes the Group’s two other social networks (OK and My World) and earns revenues from (i) user payments for virtual gifts, (ii) commission from application developers based on the respective applications’ revenue, and (iii) online advertising, including display and context advertising.

The Online Games segment includes online gaming services, including MMO, social and mobile games. It earns substantially all revenues from (i) sale of virtual in-game items to users and (ii) royalties for games licensed to third-party online game operators.

The E-commerce, Search and Other Services segment primarily consists of search engine services earning substantially all revenues from context advertising and e-commerce services (including O2O). This segment also includes a variety of other services, which are considered insignificant by the CODM for the purposes of performance review and resource allocation.

Each segment's EBITDA is calculated as the respective segment's revenue less operating expenses (excluding depreciation and amortisation and impairment of intangible assets), including our corporate expenses allocated to the respective segment.

Operating Segments Performance – Q1 2017

 

Email, Portal
and IM

Social Networks (ex VK)

Online Games

VK

E-Commerce, Search and other

Eliminations

Group

RUR millions

 

 

 

 

 

 

 

               

Revenue

             

External revenue

 1,107

 3,815

 4,168

 2,655

 891

 -

 12,636

Intersegment revenue

 2

 24

 -

 89

 92

 (207)

 -

Total revenue

 1,109

 3,839

 4,168

 2,744

 983

 (207)

 12,636

Total operating expenses

 745

 1,180

 2,931

 957

 2,146

 (207)

 7,752

EBITDA

 364

 2,659

 1,237

 1,787

 (1,163)

 -

 4,884

EBITDA margin, %

32.8%

69.3%

29.7%

65.1%

-118.3%

 

38.7%

Net profit

           

 3,478

Net profit margin, %

 

 

 

 

 

 

27.5%

 

Operating Segments Performance – Q1 2016

 

Email, Portal
and IM

Social Networks (ex VK)

Online Games

VK

E-Commerce, Search and other

Eliminations

Group

RUR millions

 

 

 

 

 

 

 

               

Revenue

             

External revenue

 1,007

 3,879

 2,674

 1,872

 725

 -

 10,157

Intersegment revenue

 1

 5

 -

 9

 95

 (110)

 -

Total revenue

 1,008

 3,884

 2,674

 1,881

 820

 (110)

 10,157

Total operating expenses

 801

 1,155

 2,335

 845

 718

 (110)

 5,744

EBITDA

 207

 2,729

 339

 1,036

 102

 -

 4,413

EBITDA margin, %

20.5%

70.3%

12.7%

55.1%

12.4%

 

43.4%

Net profit

           

 2,775

Net profit margin, %

 

 

 

 

 

 

27.3%

Note: Group aggregate segment financial information for the three months ended March 31, 2016 has been retrospectively adjusted to include pro-forma consolidation of Pixonic and Delivery Club from January 1, 2016

Liquidity

As of 31 March 2017, the Company had RUR 8,428 million of cash and no debt outstanding.

Presentation of Aggregate Segment Financial Information

The Group aggregate segment financial information is derived from the financial information used by management to manage the Company's business by aggregating the segment financial data of the Company's operating segments and eliminating intra-segment and inter-segment revenues and expenses. Group aggregate segment financial information differs significantly from the financial information presented on the face of the Company's consolidated financial statements in accordance with IFRS. In particular:

- The Company's segment financial information excludes certain IFRS adjustments which are not analysed by management in assessing the core operating performance of the business. Such adjustments affect such major areas as revenue recognition, deferred tax on unremitted earnings of subsidiaries, share-based payment transactions, disposal of and impairment of investments, business combinations, fair value adjustments, amortisation and impairment thereof, net foreign exchange gains and losses, share in financial results of associates, as well as irregular non-recurring items that occur from time to time and are evaluated for adjustment as and when they occur. The tax effect of these adjustments is also excluded from segment reporting.

- The segment financial information is presented for each period on the basis of an ownership interest as of the date hereof and consolidation of each of the Company's subsidiaries, including for periods prior to the acquisition of control of the entities in question, so long as the Company held at least one share of such entities during such periods. The financial information of subsidiaries disposed of prior to the date hereof is excluded from the segment presentation starting from the beginning of the earliest period presented.

- Segment revenues do not reflect certain other adjustments required when presenting consolidated revenues under IFRS. For example, segment revenue excludes barter revenues and adjustments to defer online gaming and social network revenues under IFRS.

A reconciliation of Group aggregate segment revenue to IFRS consolidated revenue of the Company for the three months ended 31 March 2016 and 2017 is presented below:

RUR millions 

Q1 2016

Q1 2017

Group aggregate segment revenue, as presented to the CODM

10,157

12,636

Adjustments to reconcile revenue as presented to the CODM to consolidated revenue under IFRS:

   

Effect of difference in dates of acquisition and loss of control in subsidiaries

97

 -

Differences in timing of revenue recognition

 (335)

 (886)

Barter revenue

13

10

Consolidated revenue under IFRS

9,932

11,760

A reconciliation of Group aggregate segment EBITDA to IFRS consolidated profit before income tax expense of the Company for the three months ended 31 March 2016 and 2017 is presented below:

RUR millions 

Q1 2016

Q1 2017

Group aggregate segment EBITDA, as presented to the CODM

4,413

4,884

Adjustments to reconcile EBITDA as presented to the CODM to consolidated profit before income tax expenses under IFRS:

   

Effect of difference in dates of acquisition and loss of control in subsidiaries

233

 -

Differences in timing of revenue recognition

 (335)

 (886)

Net loss on venture capital investments

 (111)

 (27)

Share-based payment transactions

 (572)

 (916)

Other

 (49)

 (11)

EBITDA

3,579

3,044

Depreciation and amortisation

 (1,896)

 (2,114)

Share of profit of equity accounted associates

35

8

Finance income

192

119

Finance expenses

 (427)

 (12)

Other non-operating income

38

11

Net gain on derivative financial assets and liabilities at fair value through profit or loss

368

186

Net (loss)/gain on disposal of shares in subsidiaries

8,712

 (15)

Net foreign exchange loss

 (148)

 (274)

Consolidated profit before income tax expense under IFRS

10,453

953

A reconciliation of Group aggregate net profit to IFRS consolidated net profit of the Company for the three months ended 31 March 2016 and 2017 is presented below:

 RUR millions

Q1 2016

Q1 2017

Group aggregate net profit, as presented to the CODM

2,775

3,478

Adjustments to reconcile net profit as presented to the CODM to consolidated net profit under IFRS:

   

Share-based payment transactions

 (572)

 (916)

Differences in timing of revenue recognition

 (335)

 (886)

Effect of difference in dates of acquisition and loss of control in subsidiaries

219

 -

Amortisation of fair value adjustments to intangible assets and impairment thereof

 (1,214)

 (1,318)

Net gain on financial instruments at fair value through profit or loss

256

158

Net (loss)/gain on disposal of shares in subsidiaries

8,712

 (15)

Net foreign exchange loss

 (148)

 (274)

Share of profit of equity accounted associates

35

8

Other

 (44)

 (13)

Tax effect of the adjustments and tax on unremitted earnings

580

582

Consolidated net profit under IFRS

10,264

804

Unaudited Consolidated IFRS Statement of Financial Position

 

RUR millions

 

December 31, 2016

March 31, 2017

ASSETS

 

 

Non-current assets

 

 

Investments in equity accounted associates

649

657

Goodwill

132,309

132,309

Other intangible assets

29,894

28,773

Property and equipment

3,840

4,053

Financial assets at fair value through profit or loss

403

406

Deferred income tax assets

2,600

3,278

Other non-current assets

2,265

1,719

Total non-current assets

171,960

171,195

Current assets

   

Trade accounts receivable

5,089

3,618

Prepaid income tax

49

74

Prepaid expenses and advances to suppliers

2,111

2,165

Financial assets at fair value through profit or loss

105

360

Other current assets

201

253

Cash and cash equivalents

5,513

8,428

Total current assets

13,068

14,898

Total assets

185,028

186,093

EQUITY AND LIABILITIES

   

Equity attributable to equity holders of the parent

   

Issued capital

 -

 -

Share premium

51,758

52,542

Treasury shares

 (1,290)

 (1,284)

Retained earnings

112,415

113,218

Accumulated other comprehensive income

470

631

Total equity attributable to equity holders of the parent

163,353

165,107

Non-controlling interests

64

65

Total equity

163,417

165,172

Non-current liabilities

   

Deferred income tax liabilities

3,265

3,233

Deferred revenue

2,710

3,444

Other non-current liabilities

748

494

Total non-current liabilities

6,723

7,171

Current liabilities

   

Trade accounts payable

3,355

3,871

Income tax payable

389

332

Financial liabilities at fair value through profit or loss

195

246

VAT and other taxes payable

2,231

2,182

Deferred revenue and customer advances

4,893

5,146

Short-term interest-bearing loans

122

 -

Other payables and accrued expenses

3,703

1,973

Total current liabilities

14,888

13,750

Total liabilities

21,611

20,921

Total equity and liabilities

185,028

186,093

Unaudited Consolidated IFRS Statement of Comprehensive Income

 

RUR millions

 

Q1 2016

Q1 2017

Online advertising

3,947

4,877

MMO games

2,090

3,208

Community IVAS

3,333

3,247

Other revenue

562

428

Total revenue

9,932

11,760

Net loss on venture capital investments

 (111)

 (27)

Personnel expenses

 (2,845)

 (3,220)

Office rent and maintenance

 (512)

 (512)

Agent/partner fees

 (1,411)

 (2,340)

Marketing expenses

 (602)

 (1,834)

Server hosting expenses

 (517)

 (429)

Professional services

 (105)

 (76)

Other operating expenses

 (250)

 (278)

Total operating expenses

 (6,242)

 (8,689)

EBITDA

3,579

3,044

Depreciation and amortisation

 (1,896)

 (2,114)

Share of profit of equity accounted associates

35

8

Finance income

192

119

Finance expenses

 (427)

 (12)

Other non-operating income

38

11

Net gain on derivative financial assets and liabilities at fair value through profit or loss

368

186

Net (loss)/gain on disposal of shares in subsidiaries

8,712

 (15)

Net foreign exchange loss

 (148)

 (274)

Profit before income tax expense

10,453

953

Income tax expense

 (189)

 (149)

Net profit

10,264

804

Attributable to:

   

Equity holders of the parent

10,258

803

Non-controlling  interest

6

1

Other comprehensive income/(loss) that may be reclassified to profit or loss in subsequent periods

   

Exchange differences on translation of foreign operations:

   

Differences arising during the period

 (50)

148

Available-for-sale financial assets:

   

Loss arising during the period (net of tax effect of zero)

 (234)

 -

Total other comprehensive income/(loss) net of tax effect of 0

 (284)

148

Total comprehensive income, net of tax

9,980

952

Attributable to:

   

Equity holders of the parent

9,975

951

Non-controlling  interest

5

1

Earnings per share, in RUR:

   

Basic earnings per share attributable to ordinary equity holders of the parent

49.27

3.84

Diluted earnings per share attributable to ordinary equity holders of the parent

48.18

3.78

Unaudited Consolidated IFRS Statement of Cash Flows

 

RUR millions

 

Q1 2016

Q1 2017

Cash flows from operating activities

   

Profit  before income tax

10,453

953

Adjustments for:

   

Depreciation and amortisation

1,896

2,114

Bad debt expense/(reversal)

2

 (3)

Net gain on financial assets and liabilities at fair value through profit or loss

 (368)

 (186)

Net (gain)/loss on disposal of shares in subsidiaries

 (8,712)

15

Loss on disposal of property and equipment and intangible assets

 (1)

 -

Finance income

 (192)

 (119)

Finance expenses

427

12

Share of profit of equity accounted associates

 (35)

 (8)

Net foreign exchange loss

148

274

Share-based payment expense

572

916

Other non-cash items

 (70)

 (49)

Decrease in accounts receivable

727

1,410

Increase in prepaid expenses and advances to suppliers

 (2,396)

 (168)

(Increase)/decrease in other assets

31

 (50)

Decrease in accounts payable and accrued expenses

 (470)

 (50)

Decrease in other non-current assets

40

417

Increase in deferred revenue and customers advances

338

996

(Increase)/decrease in financial assets at fair value through profit or loss

111

 (43)

Operating cash flows before interest and income taxes

2,501

6,431

Interest received

146

112

Interest paid

 (439)

 (12)

Income tax paid

 (241)

 (982)

Net cash provided by operating activities

1,967

5,549

Cash flows from investing activities

   

Cash paid for property and equipment

 (283)

 (651)

Cash paid for intangible assets

 (8)

 (596)

Collection of loans receivable

22

 -

Cash paid for acquisitions of subsidiaries, net of cash acquired

 -

 (1,174)

Proceeds from disposal of subsidiaries, net of cash disposed

5,579

 (43)

Collection of short-term and long term deposits

14

 -

Net cash (used in)/provided by investing activities

5,324

 (2,464)

Cash flows from financing activities

   

Loans repaid

 (5,300)

 (122)

Dividends paid by subsidiaries to non-controlling shareholders

 (2)

 -

Net cash used in financing activities

 (5,302)

 (122)

Net increase in cash and cash equivalents

1,989

2,963

Effect of exchange differences on cash balances

 (95)

 (48)

Cash and cash equivalents at the beginning of the period

8,676

5,513

Cash and cash equivalents at the end of the period

10,570

8,428