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April 29 - Russian internet company Mail.ru Group said on Thursday its first-quarter revenue rose 27.4% year on year to 28.3 billion roubles ($381 million), boosted by a 42% jump in its games business.
Mail.ru Group, which owns popular Russian social networks Vkontakte and Odnoklassniki, generates the bulk of its revenue from games and advertising, but has heavily invested in businesses such as online education, food delivery, and e-commerce.
Its aggregate net profit fell 7% year on year to 1.9 billion roubles, with earnings before interest, tax, depreciation and amortisation (EBITDA) rising 8.1% to 6.1 billion roubles, the company said.
BCS analysts said they expected EBITDA growth to accelerate throughout the year.
The pandemic boosted e-commerce in Russia as coronavirus-related restrictions kept people at home, propping up demand for online services, as well as video games.
Mail.ru’s ride-hailing and food delivery joint venture with Russia’s largest lender Sberbank is under strain, three sources told Reuters this month, with the two partners on the verge of dividing assets.
“To drive our development and unlock new growth opportunities, we will continue to invest in our key products and services as well as our ecosystem,” Chief Executive Boris Dobrodeev said, naming payment system VK Pay, mini apps and social commerce as areas the company wanted to expand.
Mail.ru confirmed its 2021 earnings guidance, with revenue seen at 127-130 billion roubles and an expected improvement in its EBITDA margin which stood at 13.2% in the first quarter.
The company expects double-digit organic growth for its game unit My.Games in 2021, with year-on-year improvement in profitability.
Mail.ru rival Yandex this week reported a 43% drop in first-quarter adjusted net income compared with last year but raised its 2021 group revenue forecast to between 315 and 330 billion roubles.
$1 = 74.2914 roubles Reporting by Anna Rzhevkina and Elizaveta Zhuravleva; Editing by Alexander Marrow and Edmund Blair