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Earnings

Russia's Yandex to spend $400-500 million on e-commerce in 2021 after profit rise

MOSCOW (Reuters) - Russia’s Yandex, which on Tuesday reported a 2% rise in 2020 net profit, plans to spend $400 million-$500 million on an e-commerce push this year to help annual revenue reach 305-320 billion roubles ($4.1-4.3 billion), its finance chief said.

FILE PHOTO: The company logo is seen on the headquarters building of Yandex company, in Moscow June 14, 2012. REUTERS/Maxim Shemetov

Yandex’s core advertising business took a hit during the early stages of the COVID-19 pandemic, but surging interest in online transactions allowed other segments of its business to flourish, including food delivery and e-commerce, whose gross merchandise volume (GMV) increased by 127% in the fourth quarter.

Greg Abovsky, Chief Financial Officer of Yandex, Russia’s top internet company, said the company expected growth to continue in services that benefited from the pandemic, such as media services, food delivery logistics and e-commerce.

Abovsky said Yandex would invest “meaningfully” in 2021 in its businesses related to e-commerce, including Yandex.Market, grocery delivery Yandex.Lavka and the grocery portion of its food delivery service Yandex.Eats.

“We are looking to spend $400-500 million across the various e-commerce initiatives that we have at Yandex,” he said.

Combined GMV for those three businesses was 24 billion roubles in 2020, nearly five times higher than the year before, said Daniil Shuleyko, Yandex.Taxi CEO.

“This makes Yandex one of the biggest, if not the biggest player on the e-grocery market in Russia,” Shuleyko said.

Yandex’s adjusted net income stood at 28.5 billion roubles last year, excluding its Yandex.Market e-commerce venture.

Revenues were up 39% year-on-year in the fourth quarter of 2020, contributing to a 24% increase in consolidated revenues for the full year compared with 2019.

The company’s taxi segment, which includes its ride-hailing arm Yandex.Taxi, grew 49% in 2020 and its revenues of 68 billion roubles accounted for 31% of the company’s total, the company said.

Abovsky said an initial public offering for Yandex.Taxi was not on the agenda. Before the pandemic, back in 2019, two sources told Reuters an offering was expected in the first half of 2020.

($1 = 73.6800 roubles)

Editing by Katya Golubkova and Emelia Sithole-Matarise

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