Azernews.Az

By Bloomberg

Mail.ru Group Ltd., Russia’s largest operator of social networks and online games, sees sales growth falling below the country’s inflation level this year and profitability shrinking as a weaker ruble hurts results.

Revenue may increase 7 percent to 12 percent this year, Moscow-based Mail.ru said Thursday in a statement. That compares with the Russian Economy Ministry’s prediction for inflation of more than 12 percent. Sales rose 15 percent last year, the company said, beating analyst estimates and sending the shares up as much as 5.1 percent in London.

The Russian ruble has plunged because of falling oil prices and the effects of continuing conflict in Ukraine. Display advertising continued to decline in the fourth quarter because of “the ongoing economic and geo-political environment” and profitability is being hurt as part of Mail.ru’s costs are in dollars, Chief Executive Officer Dmitry Grishin said in the statement.

Mail.ru, controlled by billionaire Alisher Usmanov and co- owned by China’s Tencent Holdings Ltd. and South Africa’s Naspers Ltd., spent $1.47 billion to gain full control of Russia’s largest social network VKontakte last year. It also runs the My.com portal, started in 2013 to offer mobile games and communication applications to a global audience.

Mail.ru predicted its margin for earnings before interest, taxes, depreciation and amortization will shrink to a range of 46 to 47 percent in 2015 from 51 percent last year.

The company’s sales rose to 35.8 billion rubles ($589 million) last year, beating analyst estimates for 32.4 billion rubles. Net income climbed 11 percent to 12.5 billion rubles.

The shares advanced 3.2 percent to $18.06 at 8:10 a.m. in London trading.