MOSCOW and AMSTERDAM, the Netherlands, July 28, 2020 (GLOBE NEWSWIRE) — Yandex (NASDAQ and MOEX: YNDX), one of Europe’s largest internet companies and the leading search and ride-hailing provider in Russia, today announced its unaudited financial results for the second quarter ended June 30, 2020.
Q2 2020 Financial Highlights (1)Q2 2020 consolidated financial resultsRevenues of RUB 41.4 billion ($591.9 million), in line with Q2 2019Net loss of RUB 3.7 billion ($52.3 million), down 203% compared with net income of RUB 3.6 billion in Q2 2019; net loss margin of -8.8%Adjusted net income of RUB 1.9 billion ($27.3 million), down 67% compared with Q2 2019; adjusted net income margin of 4.6%Adjusted EBITDA of RUB 8.5 billion ($121.3 million), down 35% compared with Q2 2019; adjusted EBITDA margin of 20.5%Cash, cash equivalents and term deposits as of June 30, 2020:RUB 241.9 billion ($3,457.8 million) on a consolidated basis, including the net proceeds from a public offering and concurrent private placement of 21.5 million Class A shares on June 24, 2020Of which RUB 24.4 billion ($348.3 million) is related to Taxi segmentRUB 17.8 billion ($254.2 million) related to Yandex.Market is not included in Yandex N.V. consolidated balance sheet as of June 30, 2020(1) Pursuant to SEC rules regarding convenience translations, Russian ruble (RUB) amounts have been translated into U.S. dollars at a rate of RUB 69.9513 to $1.00, the official exchange rate quoted as of June 30, 2020 by the Central Bank of the Russian Federation.Q2 2020 Operational and Corporate HighlightsSearchShare of Russian search market, including mobile, averaged 59.6% in Q2 2020, up from 56.9% in Q2 2019 and 58.1% in Q1 2020, according to Yandex.RadarSearch share on Android in Russia was 57.5% in Q2 2020, up from 52.3% in Q2 2019 and 55.5% in Q1 2020, according to Yandex.RadarMobile search traffic was 56.6% of our total search traffic in Q2 2020. Mobile revenues represented 51.3% of our search revenues in Q2 2020Search queries in Russia grew 29% compared with Q2 2019Paid clicks on Yandex’s and its partners’ websites, in aggregate, increased 22% compared with Q2 2019Average cost per click decreased 30% compared with Q2 2019Business Units and ExperimentsNumber of rides in the Taxi service declined 6% year-on-year compared with Q2 2019Number of Media Services subscribers was 4.5 million as of the end of Q2 2020Zen’s daily average audience reached 16.8 million users in June 2020, up 59% from June 2019CorporateYandex entered into a binding agreement with Sberbank to reorganize their two Joint Ventures – Yandex.Market and Yandex.Money. The transactions closed on July 23. As a result of these transactions, Yandex has become the controlling shareholder in Yandex.Market, while simultaneously exiting the Yandex.Money Joint Venture. Yandex paid net cash consideration of RUB 39.6 billion to Sberbank at the closing date.Yandex issued 21,522,840 new Class A shares and raised gross proceeds of $1.06 billion (before deducting underwriting fees and expenses) in a public offering and concurrent private placement in JuneYandex repurchased 732,175 Class A shares in Q2 2020, as part of the share repurchase program announced in November 2019“It has been both a challenging as well as eventful quarter for us,” said Arkady Volozh, Chief Executive Officer of Yandex. “Our top priority has been to ensure the well-being of our staff, our partners and our users, as we dedicated significant resources to support them through a variety of targeted social initiatives. The COVID-19 pandemic has put pressure on our core advertising and ride-hailing businesses, while at the same time creating a number of new opportunities that we believe further strengthen the company’s long-term potential. We are also excited to regain full operating control over Yandex.Market, which we believe will unlock significant synergies from the deeper integration of the e-commerce business with other parts of the Yandex ecosystem and accelerate its path to profitability.”“We are pleased with the results we achieved during this very challenging quarter,” said Greg Abovsky, Chief Operating Officer and Chief Financial Officer of Yandex. “Our immediate focus on cost optimization and improving operational efficiency after the start of the lockdown has definitely paid off and enabled us to mitigate the negative impact of the pandemic on our financial performance. While we have limited visibility in terms of the pace of further recovery, we have been encouraged by the trends that we have seen in July. In addition, we believe that the recent capital raise provides us with ample financial flexibility to continue investing into existing strategic projects and to pursue new exciting opportunities.”Impact of COVID-19 Pandemic
The COVID-19 pandemic and the resulting strict lockdown measures had a material impact on our financial results and operations in Q2 2020, particularly on our advertising and ride-hailing businesses, as well as classifieds and car-sharing services. The adverse impact was partially offset by the acceleration in FoodTech businesses (both Yandex.Eats and Lavka) and Media Services. During the second quarter Yandex incurred COVID-19 related expenses of RUB 408 million consisting of the costs of personal protective equipment (masks, sanitizers etc.), our Helping Hand project and our driver and courier support fund. In addition, we have invested in various social initiatives to support small and medium sized businesses, restaurants and taxi fleet companies during the challenging pandemic period, as well as in distance education initiatives.The trends in April were particularly challenging, but we began to see a moderate recovery in advertising and ride-hailing from the end of the month, which continued in May and June (in classifieds and car-sharing the recovery began in June). In July we see a continuing improvement of revenue growth across all the businesses affected by COVID-19.With regards to our financial position as of the end of June 30, 2020, our analysis of the effect of COVID-19 on goodwill, non-current assets and redeemable non-controlling interests shows no measurable impact. At the same time, the full impact of COVID-19 is still unknown and there is a limited visibility on the sustainability and the further dynamic of the performance recovery across Yandex businesses.The extent to which the COVID-19 crisis impacts the Company’s results will depend on future developments, which are still highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain the virus or treat its impact, among others. The development of the situation with respect to COVID-19 may also lead to changes in estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates.Consolidated Results
The following table provides a summary of our key consolidated financial results for the three and six months ended June 30, 2019 and 2020:
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