Mail.ru Group revenues up 33% in Q4, sees growth continuing in 2018

Thursday 1 March 2018 | 14:13 CET | News

Russian internet company Mail.ru Group announced that its aggregate segment revenue grew by 32.6 percent year-on-year to RUB 17.56 billion in the fourth quarter of 2017 and EBITDA increased by 29.7 percent to RUB 6.45 billion. Net profit rose 54.0 percent to RUB 4.51 billion.

Advertising revenue growth remained strong in the fourth quarter, driven by rising user engagement, improved advertising technologies and sales execution. The company continued to invest in its new businesses and allocate part of the inventory to promote new products. Advertising revenues grew by 29.4 percent to RUB 7.68 billion in the period.

As in previous periods, promotional posts on social networks remained the fastest growing stream of advertising revenues. In terms of overall customer budgets, the company continues to see advertising budgets shift to online from all other media, and in online, towards mobile and social networks in particular. Traditional offline brands are allocating growing parts of their media spend to mobile, especially to social. 

In the fourth quarter, the social network VKontakte continued to perform strongly with further growth in engagement. Its revenues grew by 53.2 percent to RUB 4.58 billion. Advertising continued to be the bulk of the revenues, and grew faster than total revenues.

Over the full year 2017, Mail.ru's revenues rose 34 percent on a pro forma basis to RUB 57.5 billion, better than its forecast. EBITDA was up 15 percent to RUB 20.5, in line with guidance. For 2018, the company expects pro forma revenue growth of 23-28 percent to RUB 68.6-71.4 billion, excluding the pending takeover of ESforce.

At the core social network business, underlying margins are expected to be broadly flat in 2018. However, Mail.ru said it was "very encouraged" by the initial progress of its Chinese e-commerce platform Pandao and as such was bringing forward investment in this business, to spend an extra RUB 3 billion in 2018. As a result, EBITDA will grow only slightly this year, to an estimated RUB 21-22 billion. 

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