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Russia's Yandex withdraws 2022 financial guidance, scales back investments

Russia's Yandex withdraws 2022 financial guidance
Russia's Yandex withdraws 2022 financial guidance   -   Copyright  Thomson Reuters 2022
By Reuters

-Russian internet giant Yandex on Thursday withdrew its 2022 financial forecasts and said it was scaling back planned investments, one of several Russian companies grappling with Moscow’s increasing isolation in the wake of the conflict in Ukraine.

Just over a week before Russia sent tens of thousands of troops into Ukraine, Yandex forecast total revenue jumping in 2022 to 490-500 billion roubles ($6.13-6.26 billion), but on Thursday said it could no longer provide reliable forecasts.

“In the current circumstances, our visibility over the … medium-term is extremely limited,” the company said in a SEC statement. “Our previous guidance for 2022 should no longer be relied upon and we are not able to provide any forward-looking comments at this stage.”

Nasdaq-listed Yandex said it expected its core advertising business, which accounted for 47% of total revenue in the fourth quarter of 2021, to be affected by the withdrawal of multinational advertisers and tighter advertising budgets for domestic businesses.

The company said its ride-hailing business remained stable, but that it was unable to predict the impact broader macroeconomic trends and supply and demand dynamics may have.

In e-commerce, Yandex said it anticipated a reduction of discretionary spending by consumers and highlighted that it may be forced to reduce its offering of goods as shipping companies and other foreign producers cease or suspend supplies.

“We have scaled back or paused many of our planned investments in our businesses both domestically and internationally,” Yandex said.

“Any prolonged economic downturn in Russia as a result of sanctions, depreciation of the rouble or negative consumer sentiment could have a material adverse effect on our financial position and results of operations.”

Yandex has faced a range of issues in the past few weeks, from senior management changes to European Union criticism and concerns over servicing its debt.

($1 = 79.8950 roubles)