MOSCOW (Reuters) - Russian internet firm Yandex on Friday raised its 2019 revenue growth guidance for a second time after a strong second quarter driven by its taxi and ride-sharing businesses.
Taxi and ride-sharing services have been booming in Russia over the last couple of years after a number of players invested in online platforms for such businesses.
Yandex, widely known as “Russia’s Google” for its array of online services, now sees revenue growing 32-36%, up from the 30-34% forecast in April.
Yandex’s Moscow-listed shares were up 4.2% by 1450 GMT.
Second quarter revenue excluding Yandex.Market grew 41% year-on-year to 41.4 billion roubles ($655.32 million). Adjusted net income rose 31% year-on-year to 6.9 billion roubles. The group said non-core businesses contributed one-third of consolidated revenues in the quarter.
Revenue related to Yandex’s Taxi segment jumped 116% and accounted for 21% of total revenues, driven by an increase in rides and optimisation of incentives, the company said.
The business unit became profitable in the quarter with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 423 million roubles.
Yandex management says its ultimate focus is to convince consumers to abandon car ownership and shift to sharing rides.
The number of rides in the Taxi segment grew by 49% year-on-year after a 53% growth on a like-for like basis in the first quarter.
“We do expect that this rate of growth is going to slow down but at a modest pace,” Greg Abovsky, Yandex Chief Operating Officer, said on a conference call but did not elaborate.
In July, Yandex’s joint venture with Uber agreed to buy rival taxi firm Vezet’s core business, further cementing Yandex’s role as a major online taxi operator in Russia and neighbouring countries as competition in its home market intensifies.
Russia’s Sberbank and internet firm Mail.ru said on Thursday they would invest up to 64 billion roubles in a new joint platform for taxi services and food.
“We are used to working in a competitive environment with global and local players,” Yandex Deputy Chief Executive Tigran Khudaverdyan said after the Sberbank, Mail.ru deal.
Apart from Russia, Yandex.Taxi is developing in other countries including Armenia, Azerbaijan, Belarus, and Georgia, where it joined forces with Uber in 2017.
“The service is doing very well in Kazakhstan, Uzbekistan, and it’s doing very well in places like Africa,” Abovsky said.
($1 = 63.1750 roubles)
Reporting by Anna Rzhevkina; additional reporting by Nadezhda Tsydenova; Editing by Katya Golubkova/ Kirsten Donovan and Emelia Sithole-Matarise