Russian Online Giant Yandex Improves Revenue Outlook As E-Commerce Booms
Russian internet giant Yandex has raised its 2021 revenue forecast, saying that strong growth in newer business areas such as e-commerce and food delivery pushed advertising's share of group revenues below 50% for the first time.
Yandex's advertising and search business, still the driving force of its profits, has recovered from a hit during the early stages of the COVID-19 pandemic.
At the same time, its revenue growth has been outpaced by the newer business areas as more people switched to online shopping during lockdowns to control the virus.
The company, which plans to spend $400 million to $500 million on an e-commerce drive this year, said it now expected full-year revenues of RUB 315 billion to RUB330 billion roubles, up from RUB 305-320 billion previously.
First-quarter revenue, which now includes the Yandex.Market e-commerce venture, jumped 39% year-on-year to RUB 73.1 billion, helped by 18% growth at the group's core search business.
Online ad revenues grew 12% and made up 49.2% of total revenues.
Adjusted net income fell 43% to RUB 2.2 billion in the quarter, a drop Yandex attributed to continuing investments in its fast growing, but often still loss-making, new businesses.
Revenue in the taxi business, which includes ride-hailing arm Yandex.Taxi, jumped 89% to RUB 26.6 billion, helped by increased demand during extreme weather conditions in January and February.
Rapid growth in logistics and a strong performance in food tech services, such as e-grocery service Yandex.Lavka, also contributed to growth in the taxi business, said Vadim Marchuk, vice president of corporate development.
The gross merchandise value (GMV) of all Yandex's e-commerce operations leapt 186% year-on-year to RUB 24.7 billion, a metric deputy CEO Tigran Khudaverdyan said Yandex planned to increase by 2.5 times in 2021.