OREANDA-NEWS. August 31, 2011. Mail.Ru Group Limited (LSE: MAIL, hereinafter referred as "the Company" or "the Group"), one of the largest Internet companies in the high-growth Russian-speaking Internet market, today provides the following preliminary unaudited segment financial information for the half year ended 30 June 2011.

H1 2011 Highlights

Group aggregate 1H 2011 segment revenue was USD 228.2m, an increase of 66.3% compared to 1H 2010 (or 59.3% organic growth, i.e. excluding the effect of ICQ acquisition completed in July 2010). 2Q 2011 aggregate segment revenue demonstrated 64.0% year on year growth;
Group aggregate 1H 2011 segment EBITDA was USD 115.2m, an increase of 114.3% compared to 1H 2010;
Group aggregate 1H 2011 segment Net Income was USD 85.6m, an increase of 115.5% compared to 1H 2010;
Net Cash position as of June 30 2011 was USD 192.0m;
Monthly audience (TNS Russia) of Mail.Ru portal in June 2011 reached 27.5m Russian users.
Key Recent Developments
The email service has been revamped to fit the needs of our audience;
New modern design launched ;
New antispam-mechanism developed and introduced ;
Cooperation agreement signed with Microsoft providing our users with the opportunity to view Microsoft Office documents directly in their browser window;
Further development of our instant messaging services;
New versions of Mail.Ru Agent supporting Odnoklassniki and VKontakte messaging;
New version of Mail.Ru Agent for Mac OS;
New versions of ICQ for PC, Mac OS and Linux;
ICQ On-Site, a web plug-in for third party sites was released;
Continued redesign of Odnoklassniki, including;
Launch of video service ;
Improved photo functionality ;
We continue to develop our online games business;
4 MMO games (Farm Kingdom, Territory 2, Business Tycoon Online, Boomz!) and 2 mobile games (The Bubbles, Time Quest) launched since April 2011;
Signed a cooperation agreement with Bigpoint, the leading European gaming portal, under which Bigpoint and Mail.Ru Group will offer selected partner games on their portals ;
New features in our search product, including real-time search of new public comments and discussions online;
We launched the beta-version of Target, our self-serve advertising service. The service allows advertisers to run advertising campaigns for audiences segmented by gender, age and location on Odnoklassniki and My World social networks;
Opened sales office in Rostov-on-Don, the eleventh operating location of Mail.Ru Group in Russia;
Successfully completed the selection stage of the 2011 Russian Code Cup, the first Russian national competition for programming;
Alexander Karavaev will be leaving Mail.Ru Group as of September 30th for personal reasons. Verdi Israelian will combine the role of CFO and COO effective immediately;
Exercised the option to acquire 7.44% of shares in VKontakte for USD111.7m taking Mail.Ru Group’s equity stake to 39.99%.
Commenting on the results of the Group, Dmitry Grishin, co-founder and CEO of Mail.Ru Group, said:

"For the first six months of 2011, Mail.Ru Group has significantly exceeded all key performance indicators compared to the prior period, delivering strong growth across all strategic sectors — communications, social networks and online gaming. In comparison with the first half of 2010, group aggregate segment revenue increased by 66.3%, reaching USD228.2 million and group aggregate segment EBITDA rose 114.3% to USD115.2 million.

The Group maintained its market leading position and achieved impressive growth in the development of Odnoklassiniki with its June 2011 average daily audience growing by 44%, compared to the same period last year, according to TNS. Significant success was also achieved by Mail.Ru Agent, the Group’s instant messenger — its monthly audience for the year increased by 35%.

We also continued to strengthen our competitive advantages, creating new opportunities for advertisers. Earlier this year, we launched Target, the new targeted self-serve advertising service and joined all projects in a single technological advertising platform.

During the first half, the Group has increased its investment in new talent, focusing on training and the recruitment of new high quality professionals. In the first six months of the year our total headcount increased by 361 full-time employees and reached 2,450 as of 30 June 2011. To support the development of Russian talent, the Group organized the largest domestic competition for programmers — The 2011 Russian Code Cup. More than 3,000 people participated in the qualifying stages online, with 50 of the most talented proceeding to the final stage of the competition where they will meet in Moscow in September to determine the overall winner.

We continue to deliver significant improvements in profitability — EBITDA margin of 50.5% compared to 39.2% in 1H 2010, driven by significant synergies in server hosting and rental costs, as well as savings in headquarter costs.

The strong progress during the period further validates the Group’s strategy of integrating its services: email, social networks, instant messengers and online gaming. Looking toward the second half, the Group will continue to focus its efforts on delivering synergies from the integration of its key projects and growing its presence through expansion in Russia and the CIS to capitalize on the increasing demand for our services.

Given the strong results of H1 and our continued delivery we are increasing our FY 2011 guidance and now expect to see FY 2011 revenue growth of around 50% with FY 2011 EBITDA margin percentage in the high forties."
Conference call

The Mail.Ru Group management team will host an analyst and investor conference call at 14.00 UK time (17.00 Moscow time, 9.00 U.S. Eastern Daylight Time), on Wednesday 31 August 2011, to discuss details of the Company’s performance for the half year ended 30 June 2011 and certain forward-looking information. The conference call will include a Question and Answer session. Presentation


 To participate in this conference call, please use the following access details:Confirmation Code: 4057488
  
Participant Toll Free Telephone Numbers: 
  
From Russia 810 800 2503 1012
  
From the UK 0800 279 9640
  
From the US 1866 850 2201


 
Investor Relation Contacts:

Matthew Hammond
Managing Director Mail.Ru Group
Phone: +971 505 56 1315 / +44 7711 624 679
E-mail: ir@corp.mail.ru
Press Contacts:

Alexey Ivanov
VP Corporate communications Mail.Ru Group
Phone: +7 495 725 6359 / +7 903 797 73 82
E-mail: alexey.ivanov@corp.mail.ru

Jon Snowball
Financial Dynamics
Phone: +44 (0)20 7831 3113
E-mail: Jon.Snowball@fd.com
Cautionary Statement regarding Forward Looking Statements

This press release contains statements of expectation and other forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "forecast", "intend", "will", "could", "may" or "might", the negative of such terms or other similar expressions including "outlook" or "guidance". The forward-looking statements in this release are based upon various assumptions that are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and may be beyond the Group’s control. Actual results could differ materially from those discussed in the forward looking statements herein. Many factors could cause actual results to differ materially from those discussed in the forward looking statements included herein, including competition in the marketplace, changes in consumer preferences, the degree of Internet penetration and online advertising in Russia, concerns about data security, claims of intellectual property infringement, adverse media speculation, changes in political, social, legal or economic conditions in Russia, exchange rate fluctuations, and the Group’s success in identifying and responding to these and other risks involved in its business, including those referenced under "Risk Factors" in the Group’s public filings. The forward-looking statements contained herein speak only as of the date they were made, and the Group does not intend to amend or update these statements except to the extent required by law to reflect events and circumstances occurring after the date hereof.