Russian internet major Yandex plans to IPO Yandex.Taxi

Russian internet major Yandex plans to IPO Yandex.Taxi
The business is most likely list in the US.
By bne IntelliNews November 17, 2017

Russian internet services major Yandex plans to IPO its taxi ordering business Yandex.Taxi in the US, which recently got a boost from a tie up in a joint venture with Uber, Bloomberg reported on November 16 citing the CFO of Yandex Greg Abovsky.

In July Yandex and Uber agreed to join forces in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan, investing $225mn and $100mn in the new company respectively, giving it an estimated $3.73bn valuation.

The business is most likely list in the US, according to Abovsky, who boasted that in second and third quarters user growth in Moscow "increased by triple digits."

However, while still waiting regulatory approval in Russia and other CIS countries, spending on the taxi business has already undermined Yandex performance.

Yandex.Taxi saw its Ebitda decline by 800% y/y to negative RUB6.38bn ($111mn) in January-June. For the July-September accounting period, its Ebitda was RUB3.17bn.

In the meantime consolidated Yandex results in the third quarter missed expectations. While company's revenues matched expectations, the adjusted Ebitda of RUB5.7bn and net profit of RUB2.4bn missed the forecast by 6% and 20%, respectively.

Renaissance Capital attributed the underperformance to higher marketing spending and ongoing investments in Yandex.Taxi pressuring the margins.

Most recently another internet major Mail.ru said it could enter the taxi market, although the news were met sceptically by the analysts. 

Mail.ru invested heavily in the food delivery services, and Yandex could compete in the segment by "investing very aggressively" in UberEats in Russia next year, according to Abovsky.

Yandex US GAAP the third quarter of 2017 financial highlights

RUB mn

the third quarter of 2016

the second quarter of 2017

the third quarter of 2017

Chng QoQ

Chng YoY

the third quarter of 2017F, VTBC

Diff.

the third quarter of 2017 Cons*

Diff.

Revenue

19293

22104

23438

0.06

0.21

23327

0

23440

0

Adj. EBITDA

6888

7213

5695

-0.21

-0.17

5693

0

6000

-0.05

Adj. EBITDA margin

0.357

0.326

0.243

-8.3pp

-11.4pp

0.244

-0.1pp

0.256

-1.3pp

Adj. net income

3793

3990

2371

-0.41

-0.37

2609

-0.09

3000

-0.21

Adj. net margin

0.197

0.181

0.101

-7.9pp

-9.5pp

0.112

-1.1pp

0.128

-2.7pp

Source: Company data, VTB Capital Research; * Interfax as of 23 October 2017

 

 

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