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Russian tech firm VK lowers 2021 revenue forecast on slowing growth

MOSCOW :Russian internet group VK downgraded its full-year revenue guidance to 124-127 billion roubles (US$1.75-1.80 billion) on Thursday, citing slowing growth after a surge in pandemic demand.

Its previous 2021 revenue forecast was for growth of 18-21per cent to 127-130 billion roubles.

The company, which owns the popular Vkontakte and Odnoklassniki social networking websites, expanded its e-commerce services and games division last year as the pandemic boosted demand for online purchases and entertainment.

VK shares were down 0.2per cent in London at 0716 GMT.

Known as Mail.Ru Group before a rebranding this month, VK reported a 19per cent rise in third-quarter consolidated revenue to 30.4 billion roubles, which it said was supported by appetite for online advertising and education technology.

The company said it was bullish on the growth prospects of its games unit My.Games, which delivered 2.3per cent year-on-year growth in the quarter, but said growth in the segment's earnings before interest, tax, depreciation and amortisation (EBITDA) was the focus this year.

Revenue from edtech jumped 56per cent year-on-year to 2.5 billon roubles, supported by expanded course offering, which VK said helps drive paying user growth.

The net loss, including joint ventures, widened to 1.37 billion roubles, compared with a loss of 415 million roubles a year ago.

Russia's top internet company Yandex on Wednesday reported an 82per cent year-on-year drop in third-quarter adjusted net income, in part due to e-commerce investments, but raised its full-year group revenue forecast.

"Today's results are in line with expectations, albeit the full-year guidance downgrade should impact the share price," analysts at Jefferies said in a note.

(US$1 = 70.6750 roubles)

(Reporting by Anna Rzhevkina and Alexander Marrow; Editing by Jason Neely and Mike Harrison)

Source: Reuters

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