Mail.Ru Group Limited reported preliminary unaudited segment data revenue for the third quarter of 2016, As told CNews in the company ,ithout taking into account the results Pixonic, in the third quarter of 2016, the aggregate segment revenue grew by 5.0% compared to the same period last year and amounted to RUB 9 127 million Total segment revenue for 9 months of 2016 increased by 9.3% compared to the same period last year.
based on the results of Pixonic, in the third quarter of 2016, the aggregate segment revenue of kompanii increased by 9.4% compared to the same period last year and amounted to 9.620 RUB million Total segment revenue for 9 months of 2016 increased by 12.7% compared to the same period last year.
the Balance of funds on current and Deposit accounts as of September 30, 2016 amounted to RUB 9 550 million.
In the intervening period Mail.Ru Group acquired a 100% interest in Pixonic, the international developer of mobile games and 51% of the shares in GeekBrains, online learning platform for programmers. Mail.Ru the Group also released an iOS version of the app for services that support two-factor authentication — “access Code”. Navigation in MAPS.ME supplemented by a terrain representation and a new ergonomic design.
In ICQ appeared editor for pictures and video, as well as the ability to process video using neural networks. running mask video call and “Stories.”
the size of the audience of mobile service free listing Yula has reached 1 million daily and 5 million monthly. Implemented a number of updates Yuly: new interface, advanced filtering of search results and improved moderation.
the Cloud Mail.Ru launched Clouder — a browser plugin that saves images to cloud storage, and Screenshoter — desktop application that allows you to take screenshots and share them.
Vkontakte has launched a money transfer service and voice messages, and also provided a widget “Messages of community” for third-party sites. Comments and likes are displayed directly in the news feed of Facebook on mobile devices. The application Vkontakte and Odnoklassniki for iOS is back “Music” section in Vkontakte and Odnoklassniki implemented auto-play videos in news feed.
Classmates appeared to display the comments of the audience in real time over a live video feed and also added animated themes for user profile page and the new types of groups (public pages, companies, places, celebrities, events, etc.).
the Company launched a mobile game Juggernaut Champions and a closed beta test of the MMORPG Revelation Online. Programmatic-myTarget is now available on the main page Mail.Ru and inside mobile apps Mail Mail.Ru.
Commenting on the company’s results of operations, Dmitry Grishin, Chairman of the Board of Directors Mail.Ru Group, said: “In the third quarter of 2016, the company’s revenue increased by 5.0% compared to the same period last year and amounted to RUB 9127 million; revenue growth in the first nine months of 2016 has reached 9.3%. Considering the acquisition of Pixonic indicators total revenue growth in the third quarter was 9.4%. Pixonic acquisition was completed in early October. The growth of advertising revenues in the third quarter remained stable compared to the same period last year it increased by 21.3%, amounting to 4 to 408 million rubles., and for nine months it increased by 25.9% (to 12 mln. 506). The trends observed in the first half of 2016, as a whole remain unchanged. As we mentioned earlier, the growth of mobile audiences and inventory, as well as integration of ad technology, encourage the redistribution of advertising budgets in the mobile segment, where we own significant market share. Native advertising continues to show good results in social networking. This growth, especially mobile, allows us to mitigate the impact of lower search revenue, which is also in line revenues. In the second half of the high base effect for advertising revenue remains significant, but we expect that the favorable structural trends, coupled with the ongoing flow of budgets from other types of media, as well as the impact of new advertising formats, will provide us with a stable level of revenues at the end of 2016″.
Audience and the involvement of users Vkontakte, according to the company, continue to grow. Thanks to the redesign of the desktop version and adding new features to the mobile, the monthly audience of the embedded messenger Facebook for mobile and desktop users reached 80 million active users, more than 50 million of them in Russia. The mobile audience continues to grow: in September, the monthly mobile audience amounted to more than 73 million users.
the Company has focused on native — and especially mobile — ads in news feed. In the third quarter of 2016, the total revenue of Vkontakte increased by 39.3%, amounting to 2 127 mln.
In the third quarter of 2016, revenue from MMO games decreased by 13.5% compared to the same period last year and amounted to 1 909 million rubles. the Main reasons were the comparison with very high results for the third quarter of 2015 (at the expense of income from foreign territories), as well as schedule games. With the release of Revelation Online in the domestic market and contribution of Pixonic, in the fourth quarter of 2016, the company expects a return to growth in revenue from games on a comparable basis. A busy schedule of major game releases in 2017 including the key franchise: for the first half planned out Revelation Online in the international market, Skyforge version for consoles, mobile and the Chinese versions of Armored Warfare. In addition, there will be released a few mobile games.
As before, in relation to IVAS the company focuses on mobile (adding new features and improving the mobile interface) and, consequently, on the growth of the share of paying users. Monetization on mobile devices have not yet reached an acceptable level, and the macroeconomic situation and the deterrent effect of fluctuations in exchange rates continue to negatively affect the amount of revenues from IVAS. All this led to a decline in revenues from IVAS 3.8% in the third quarter. According to the forecast, in the fourth quarter in this segment there is no significant change.
the Number of active users of the mobile service Yula lets you find and offer products in the immediate vicinity, more than 5 million people a month and 1 million daily. The monthly audience has doubled compared with the published results of the company for the first half at the end of August, when the monthly number of users was 2.5 million the Application systematically kept in the top 5 most popular apps App Store and Google Play in Russia. Currently, the company focuses on building audience and user engagement.
the potential of the business to generate cash flow remains unchanged and cash flow in the third quarter consistent with the projections. As a result, the cash balance in the accounts at the end of the third quarter amounted to RUB 9 550 million (figures refer to the time before purchasing Pixonic).
the Company also announced changes in management structure. the Boris Dobrodeyev, who held the position of Director for strategy and development group and General Director of Vkontakte, to take over the leadership of the current operating activity in the post of General Director (CEO Russia). Dmitry Grishin will continue to participate in management as the Chairman of the Board of Directors.
the company expects that with regard to joining Pixonic revenue growth in 2016 will amount to about 10%. The rate of return on total segment EBITDA will be around 45% by the end of 2016.
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