Russia's VK revenue sturdy but sanctions, trading freeze cloud outlook

VK

03/03/2022 13:04

MOSCOW, March 3 (Reuters) - Russian internet group VK
 VKCOq.L  reported full-year revenue in line with forecasts on
Thursday, but Russia's invasion of Ukraine and U.S. sanctions on
VK's CEO since then have sent its shares plummeting and
dramatically changed the firm's prospects. 
    VK's London-listed GDRs have lost nearly 93% year-to-date to
less than $1 before being banned from trading on Thursday. They
were at around $17 dollars before a significant overhaul of the
firm's shareholder structure saw state-owned entities assume
control in early December.  urn:newsml:reuters.com:*:nL8N2SO3IY  urn:newsml:reuters.com:*:nL4N2V61UU
    VK, which also runs email provider mail.ru and has
operations in gaming and education technology, reported an 18.2%
jump in 2021 revenue to 125.8 billion roubles ($1.07 billion)
and said its net loss narrowed to 1.19 billion roubles in the
fourth quarter from 2.6 billion roubles a year earlier.     
    Western nations have slammed Russia with unprecedented
sanctions in the wake of what Moscow calls a "special operation"
in eastern Ukraine, with VK CEO Vladimir Kiriyenko and his
father, former prime minister Sergei Kiriyenko, among those
targeted by sanctions.  urn:newsml:reuters.com:*:nL8N2UZ8MJ
    The U.S. Treasury blocked all their property and interests
in property that are in the United States due to links with the
Russian government. Vladimir Kiriyenko was designated with
sanctions for being the adult child of someone who had been a
Russian government official. 
    VK last month said Kiriyenko's inclusion on the U.S.
sanctions list would not affect its operational or financial
activities, or cooperation with partners. 
    "VK will continue to develop its ecosystem and strengthen
its leadership position in key business areas," it said. 
    The company cancelled its earnings call in light of the
"current level of uncertainty and market volatility", and
postponed forecasts. It said it was conducting contingency plans
for all potential sanctions outcomes.     
    Russia's government on Wednesday said IT companies would be
exempt from paying income tax for three years and be granted
preferential loans. Developers would also receive tax benefits
and employees of IT firms would have their military service
deferred.
    On Thursday, Deputy Prime Minister Dmitry Chernyshenko said
the number of companies applying to be registered as IT
companies had jumped tenfold. 
    ($1 = 117.3020 roubles)

 (Reporting by Reuters in Moscow
Editing by Bernadette Baum)
 ((moscow.newsroom@thomsonreuters.com;))