Mail.Ru Group Limited Final Audited IFRS Results for FY 2012
OREANDA-NEWS. 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 releases its annual report for 2012 and provides the following final audited segment financial information for the year ended 31 December 2012 and an update on the preliminary unaudited segment revenues for Q1 2013.
Performance highlights
- Q1 2013 Group aggregate segment revenue grew 29.4% Y-o-Y to RUR 6,254 million
Context advertising and MMO games were the key growth drivers delivering 47.9% and 41.5% Y-o-Y growth respectively
Display advertising saw improvement through the period
- Monthly audience of Mail.Ru portal in March 2013 reached 34.7m Russian users (TNS Russia, cities 100k+, age 12-54)
- Daily audience of Odnoklassniki (“OK”) in March 2013 reached 39.3 million users (LiveInternet)
- Final audited segment results for FY 2012 consistent with the preliminary trading statement
Group aggregate segment revenue at RUR 21,151m, Group aggregate segment EBITDA at RUR 11,535m, Group aggregate net profit at RUR 8,552m compared to RUR 21,151m, RUR 11,534m and RUR 8,499m respectively reported on February 26, 2013
Key Recent Developments
Email & Portal
- Update of email apps for iOS (new design and iPad support), Android, Windows phone and Windows 8
- Enabled registration and login on Ukrainian domain Mail.ua
- Email collector now works via IMAP protocol
- Users can see log of their actions in email service
Instant Messaging
- Video calls on Mail.Ru Agent app for Android and ICQ app for Windows 8
- Paid themes on Mail.Ru Agent app for Android
- SMS invites on ICQ app for Android
- Photo filters on Windows Phone apps for both messengers
Social Networks
- Reworked video service on OK with new design, improved navigation and usability
- Launched music recommendation service “My Radio” on OK
- Newsfeed filters on OK enabling to view selected types of news (photos, games, statuses, etc.)
- Introduction of Armenian, Azerbaijani and Uzbek language interfaces on OK
- My World released app for Android and updated app for iOS introducing large photos in newsfeed, native music and messaging
- New service navigation, separated pages for user profile and newsfeed, and new photo viewer with improved usability on My World
Games
- Warface has become our #1 revenue generating game and continues gaining traction in terms of both users and revenue
- Launch of browser-based MMO Pirate Code
Search and E-commerce
- Our search product now adds relevant user profiles from social networks, sport events with live scores and companies location on map to search result page
- Launch of Avia.Mail.Ru, air tickets booking service
- Launch of iOS and Android apps for Realty.Mail.Ru
Other
- Announced 3rd annual Russian Code Cup – an all-Russian programming contest held by Mail.Ru Group. Qualifications in April and June with finals in September 2013
- The Company held Technology Forum, an IT-conference where industry experts shared their knowledge and experience in various information technology fields
- The Company paid a special dividend of USD 899 million [1] (USD 4.3 per GDR) on 28 March 2013
- The board has approved a USD 30m GDR buying programme for the Employee Benefit Trust. This will be undertaken through 2013
Commenting on the results of the Group, Dmitry Grishin, Chairman and co-founder of Mail.Ru Group, said:
“We are very pleased to report that both our final IFRS audited results for 2012 are consistent with the preliminary results we announced in February, and that we have started 2013 positively with continued strong revenue performance in the first quarter.
In Q1 2013, Mail.Ru Group achieved Group aggregate revenue Y-o-Y growth of 29.4% with a strong contribution from all revenue streams aside from display advertising. While contextual advertising continued to show strong growth the beginning of the year for the display market was still impacted by the one off effects seen in H2 2012. However through the quarter we saw the impact of these events drop off, and by the end of the quarter the display business had returned to a stronger growth rate. We now expect to see continued improvement in display revenue growth rates through the year.
In Q1 we continued to execute on our MMO games strategy which proved successful in 2012. Warface has been an important component of this, and has seen an increasing traction in terms of both users and revenues. By the end of Q1 Warface was our largest revenue generating game with PCUs up to 145,000. In Q1 we also released browser based MMO game Pirate Code where the initial signs are very promising. We have further releases through the rest of 2013 and will continue to internationalize our most successful titles. As such we expect the MMO games revenues to continue to show strong growth through the year.
After the unprecedented growth in Community IVAS in 2012, revenues continued to show strong growth in Q1 with the main driver continuing to be the increase of paying users – especially in virtual gifts and services, as well as in our API platform. We remain focused on increasing user engagement and improving our product. As such we expect that community IVAS revenues will continue to deliver a good contribution to growth.
In Q1 2013 we continued to focus on our mobile products. Our strategy is to be device neutral wherever possible. As an example our email and IM apps have seen continued strong growth during Q1. During 2012 in email we launched iOS, Android and Windows Phone apps and we now have a significant user base with our Android app growing at a particularly fast rate. In IM our iOS, Android and Windows Phone apps have been even more successful. At present we remain primarily focused on growing the mobile user base and engagement, and we remain very excited about the future potential for further mobile growth and monetisation.
We have started the year well, and despite an uncertain global economic outlook, the underlying market remains supportive and the structural drivers of our business are unchanged. As a result we face the rest of the year with confidence and are pleased to reiterate our full year 2013 guidance of 25-28% y-o-y revenue growth and EBITDA margins in the low 50%.”
[1] Including USD 2 million paid to Mail.Ru Employee Benefit Trustees Limited
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