July 28, 2021

MOSCOW (Reuters) -Russian internet giant Yandex on Wednesday reported a 34% rise in second-quarter adjusted net income compared with a year ago and raised its 2021 group revenue forecast to between 330 and 340 billion roubles ($4.49-$4.63 billion).

Yandex, which is spending $400-500 million on an e-commerce drive this year to tap into the pandemic-driven surge for online services, said gross merchandise volumes (GMV) for its e-commerce businesses jumped 155% to 35.1 billion roubles year on year.

Yandex services range from advertising to ride-hailing and foodtech. Strong growth in newer business areas, such as e-commerce and food delivery, pushed advertising’s share of group revenues below 50% for a second successive quarter.

Adjusted net income stood at 1 billion roubles, while second-quarter revenue was at 81.4 billion roubles, up 70% year-on-year. Yandex had previously expected 2021 revenue to reach 315-330 billion roubles.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were down 13% in the second quarter compared with a year earlier, when pandemic restrictions reduced company earnings and business activity. Yandex said the decline was mainly driven by e-commerce investments.

It said it expected group e-commerce GMV, which encompasses its marketplace Yandex.Market, e-grocery business Yandex.Lavka and a portion of its food delivery service Yandex.Eats, to grow by up to three times in 2021 year-on-year.

Its online advertising business swiftly recovered from a dip during the early stages of COVID-19, with revenue in the second quarter growing 48% to 33.4 billion roubles.

“From a lower base of Q2 2020 as a result of the pandemic, we have seen improved financial performance in our key businesses, including online advertising and ride-hailing,” Yandex said in a statement. “We expect the trends to normalize in the following quarters as the low base effect fades.”

Yandex’s Moscow-listed shares were up 1.1% at 1043 GMT, outperforming the wider market.

($1 = 73.5040 roubles)

(Reporting by Alexander Marrow, Anna Rzhevkina and Gleb Stolyarov; Editing by Katya Golubkova and Barbara Lewis)