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Russia's Mail.ru raises sales forecasts, shrugs off Ukraine ban
August 10, 2017 / 9:19 AM / 4 months ago

Russia's Mail.ru raises sales forecasts, shrugs off Ukraine ban

* Sees 2017 revenues up 23-26 pct vs 17-21 pct previously

* Impact of Ukraine ban limited to 1.5 pct of revenue

* Q2 revenue up 36.8 pct after 24.4 pct growth in Q1

* 2017 remains an investment year

MOSCOW, Aug 10 (Reuters) - Russian internet group Mail.ru increased its sales forecasts on Thursday for the second time this year, shrugging off the impact of a Ukraine ban on its products, and said it would press on with investments.

Mail.ru now expects 2017 revenues of 52.6-53.9 billion roubles ($879-900 million), implying growth of 23 to 26 percent. In April, the company had raised its revenue forecast to 17-21 percent from 16-19 percent.

The new guidance takes into account the impact of a ban in May by the Ukrainian government on Mail.ru products, part of a package of restrictions on Russian internet firms that Kiev said was intended to guard against cyber threats.

Mail.ru said the negative effect of the ban was estimated at around 1.5 percent of total revenues in 2017. In May, the company also said the ban would not affect its targets.

The company reported a 36.8 percent jump in second-quarter revenues, including all acquisitions on a pro forma basis, to 13 billion roubles, driven by strong growth in online advertising, games and paid services on its popular social networking sites.

Net profit rose 2 percent to 3 billion roubles and earnings before interest, taxation, depreciation and amortisation (EBITDA) grew 6.5 percent to 4.6 billion roubles.

It said EBITDA was seen at 20 billion roubles this year, compared to 18 billion roubles in 2016.

“2017 remains an investment year for us and we continue to significantly invest and expand our new projects which, at this stage, are not contributing to EBITDA,” Mail.ru said.

Russia’s second biggest mobile operator Megafon bought a majority stake in Mail.ru earlier this year. Mail.ru itself has also made a number of acquisitions in the past few months, expanding in games, food delivery and ride-sharing services.

Mail.ru owns three of the major Russian language social networks - VKontakte, Odnoklassniki and Moi Mir (My World) and Russia’s largest online games business.

London-listed shares in Mail.ru were up 5.9 percent by 0850 GMT at $29.50. ($1 = 59.8709 roubles) (Reporting by Maria Kiselyova. Editing by Jane Merriman)

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