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[August 22, 2014]
Mail.Ru Interim Profits Rise But Warns On Russian Economic Situation
(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - Russia-focused internet company Mail.Ru Group Ltd Friday posted a rise in profit on the back of a jump in revenue in the first half, but warned that the underlying economic and geopolitical environment in Russia is darkening its outlook.
The internet services group said its net profit in the six months to June 30 rose 26% to RUB6.3 billion, with revenue in the first half jumping 22% to RUB15.1 billion from RUB12.4 billion last year.
But despite the rise in revenue, the group said the underlying economic and geopolitical environment in Russia has continued to become more challenging, impacting its advertising revenues. In the second quarter to June 30, the company said advertising revenues were down by around 10%.
Its Headhunter online recruitment business, Mail.Ru's biggest revenue driver, also has been hurt by the macroeconomic situation in Russia and therefore has underperformed, the company said.
Mail.Ru said it was continuing to focus on its multiplayer online games strategy. Warface remains its largest revenue-generating game, but it said its games revenue was impacted in the second quarter by a hacking attack on its Archage game, which allowed users to access paid features on the platform for free.
It said its community internet value-added services business shows solid growth in the first half, while its myMail app continued to prove successful following the wider launch of the My.com personalised email address service.
Chairman and Chief Executive Dmitry Grishin said forecasting is difficult given the challenging underlying economic environment. Due to the problems currently facing Russia, Grishin said the company does not expect a near-term improvement in display advertising revenues or in its Headhunter business.
Grishin said the company expects full-year revenue to rise 14%-18% and said the cost control measures put in place in the first half should help it maintain its margins.
Mail.Ru shares were untraded on Friday at 31.15 pence.
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