VK Company Limited audited IFRS results for FY 2021

 

VK Company Limited audited IFRS results for FY 2021

 

March 3, 2022. VK Company Limited (LSE, MOEX: VKCO, hereinafter referred to as "the Company" and together with its subsidiaries "VK" or "the Group"), one of the largest companies in the Russian-speaking Internet market, today releases audited IFRS results and segment financial information for the year ended 31 December 2021.

 

Performance highlights*

Results for the three months ended 31 December 2021:

 

• Q4 2021 Group aggregate segment revenue grew 12.4% YoY to RUB 37,053m
• Q4 2021 Group aggregate segment EBITDA rose 46.4% YoY to RUB 10,643m
• Q4 2021 Group aggregate net profit from consolidated subsidiaries grew 152.1% YoY to RUB 4,359m
• Q4 2021 Group aggregate net loss including key strategic associates and joint ventures was RUB (1,187m), compared to Q4 2020 net loss of RUB (2,633m), including the following contributions:
  • O2O JV: RUB (3,225m) in Q4 2021 vs RUB (3,707m) in Q4 2020;
  • AER JV: RUB (2,213m) in Q4 2021 vs RUB (655m) in Q4 2020;
  • Uchi Group: RUB 26m in Q4 2021;
  • Umskul: RUB (34m) in Q4 2021

 

Results for the twelve months ended 31 December 2021:

• FY 2021 Group aggregate segment revenue rose 18.2% YoY to RUB 125,752m
• FY 2021 Group aggregate segment EBITDA grew 18.2% YoY to RUB 31,802m
• FY 2021 Group aggregate net profit from consolidated subsidiaries grew 24.7% YoY to RUB 12,429m
• FY 2021 Group aggregate net loss including key strategic associates and joint ventures was RUB (6,486m), compared to FY 2020 net loss of RUB (1,959m), including the following contributions:
  • O2O JV: RUB (14,423m) in FY 2021 vs RUB (10,573m ) in FY 2020;
  • AER JV: RUB (4,392m) in FY 2021 vs RUB (1,350m) in FY 2020;
  • Uchi Group: RUB (66m) in FY 2021;
  • Umskul: RUB (34m) in FY 2021

 

* Performance highlights are based on the Group aggregate segment financial information, which is different from IFRS accounts. See "Presentation of Aggregate Segment Financial Information".

 

Commenting on the results of the Group, Vladimir Kirienko, CEO (Russia) of VK, said:

 

"Given that this is my first reporting as the CEO of VK (Russia), I would like to discuss the key financial parameters and share my initial impressions.

 

First of all, we have achieved good results. In Q4, Group revenue grew by more than 12%, with Education Technology services (+38%), Other (+25%) and online advertising (around +15%) revenues showing superior growth rates. MMO Games continued to expand despite the challenging base effect, combined with no new games launches.

 

Q4 revenue split:

• Advertising: +14.7% YoY to RUB 14,659m
• MMO: 3.3% YoY to RUB 10,130m
• Community IVAS: +2.9% YoY to RUB 5,047m
• Education Technology services: +38.0% YoY to RUB 3,557m
• Other: 25.4% YoY to RUB 3,660m

 

 

VKontakte remains the key contributor to our core online advertising revenue stream and to the largest Communications & Social (C&S) reporting segment. Its quarterly revenue reached RUB 8.1bn (+12% YoY), with Q4 providing the toughest comp within 2021 (+17.2% YoY in Q4 2020). VKontakte delivered 21.9% YoY revenue growth to RUB 27.9bn for the year and further strengthening of its leading position on the domestic social networking market remains among our major strategic priorities.

 

In terms of advertising products, performance remained the key driver (+20% YoY) in Q4. Within advertising formats, we saw 27% YoY growth for video.

 

Community IVAS (14% of Group revenue in Q4) grew by 2.9% YoY, driven by Music.

 

With 97% of Community IVAS and 81% of Online advertising revenues booked within the C&S segment, it saw 10.2% growth with significant margin improvement as EBITDA margin expanded to 45.7% versus 40.7% in Q4 2020, as we continued to focus on efficiency and exercise tight cost control in all the key verticals of the segment .

 

MMO Games (27% of Group revenue in Q4) grew by 3.3% YoY, with the overall Games segment (represented by MY.GAMES) delivering 5.1% growth to RUB 11.6bn. EBITDA of MY.GAMES was RUB 3.8bn with a margin of 32.7% compared to 24.2% in Q3 and 13% in Q4 2020. MY.GAMES delivered RUB 10.4bn in EBITDA in 2021, having more than doubled EBITDA versus 2018 level (RUB 5.0bn) a year ahead of guidance. EBITDA Margin was 23.6% for the year, a significant improvement versus 16.0% in 2020 and in line with the target low to mid-20s through-the-cycle margin for this business outlined in 2018.

 

EdTech segment (Skillbox Holding Limited) revenues grew by 38.1% YoY in Q4 (to RUB 3.6bn) with RUB 10.4bn in revenue delivered in 2021. EBITDA margin stood at minus 12.7% in Q4 versus minus 13.0% in Q3 given the ongoing investment into the course offer along with international experiments.

 

Within the New Initiatives segment, Youla remains the largest component, with RUB1.1bn in revenue in Q4 (+11% YoY). Youla delivered RUB 3.8bn in revenue in 2021, arriving within guidance of RUB 3.6-3.9bn. The EBITDA margin stood at minus 20% in Q4 2021 versus minus 59% in Q4 2020.

 

For the year, VK revenues were RUB 125.8bn versus guidance of RUB124-127bn with a stable margin of 25.3%. Forward guidance and outlook will be provided following the completion of the ongoing strategic review and upon better overall visibility.

 

Our net debt position excluding lease liabilities at the end of December stood at RUB 35,030m (RUB 50,478m including lease liabilities), with RUB 21.6bn invested into the O2O JV, $60.3mn into the AER JV and RUB 4.7bn into online education and games in 2021.

 

Also, I want to share my initial impressions. I believe that VK offers a phenomenal combination of assets, which cover almost all the daily online, and now also many offline, needs of millions of users. The company has unique technologies and platform solutions with up-to-date services that allow people to stay in touch, support each other, work, study and much more.

 

I have also been impressed with the team at all levels and their motivation to either remain or become the leaders in their directions. And we have a strong brand and unique culture. In my view, the company generally has everything it needs for us as a team to succeed in our main goal - develop the VK ecosystem and solidify its role on the Russian market".

 

Commenting on the results of the Group, Dmitry Grishin, Chairman of the Board of VK, said:

"I have a lot of confidence in our team and our unified ability to make VK the best it can be. We will continue to develop the VK ecosystem and strengthen the Group's leadership positions in the key areas. I remain confident that our services will remain indispensable for our users and partners in solving their everyday tasks in a highly convenient and safe way".

 

Postponement of conference call and webcast:

In light of the current level of uncertainty and market volatility, the conference call and webcast, which had been previously scheduled for today to discuss the results and outlook will be postponed until there is better visibility. We continue to assess the situation and are in the process of contingency planning for all potential sanctions outcomes. Continuity of our business with ongoing protection of our employees and our customers are our top priorities.

 

We will host a group call as soon as possible. In the meantime, all our stakeholders are welcome to send any questions related to our business using the contact details available below and we remain available for individual incoming call requests.

 

Financial and operational highlights around our most material non-consolidated assets among associates and joint ventures including AliExpress Russia JV and O2O JV can be found below in the "Joint Ventures" section of the press release.

 

Segmental highlights

 

Communications and Social segment

 

The segment's revenue was up 10.2% YoY to RUB 17.9bn in Q4 2021 driven by advertising revenue growth. EBITDA increased by 23.8% YoY to RUB 8.2bn in Q4 (with a margin of 45.7% vs 40.7% a year ago, mainly driven by increased efficiencies across the largest cost items, including Personnel, Marketing and Agent/Partner fees) despite the ongoing product investments, particularly into content and music.

 

Communications and Social Segment Performance - Q4 2021 & FY 2021

 

RUB millions	Q4 2020	Q4 2021	YoY, %	FY 2020	FY 2021	YoY, %
Revenue
External revenue	16,049	17,770		52,513	60,053
Intersegment revenue	175	106		172	328
Total revenue	16,224	17,876	10%	52,685	60,381	15%
Total operating expenses	9,628	9,710	1%	28,120	33,066	18%
EBITDA	6,596	8,166	24%	24,565	27,315	11%
EBITDA margin, %	41%	46%	5pp	47%	45%	(1)pp

 

VKontakte

 

VKontakte leads among the local social networking platforms, with an average Russia MAU of 72.5mn and DAU of 47mn in Q4. According to Mediascope*, VKontakte reaches 76% of the Russian Internet audience every month, with 45% visiting the platform daily.

 

The number of VK Mini Apps rose by 53% YoY in December to over 39,700, with MAU of 46mn (+18% YoY). Monetization of mini apps and games on the VK Mini Apps platform is expanding, with its in-app ad revenue increasing by 300% YoY in Q4.

VK Calls saw AR enhancements and were enabled to simultaneously host an unlimited number of participants, with related MAU in VKontakte at 13mn and 20mn inclusive of Odnoklassniki (OK) in December. The VK Calls SDK was also made available to third-party developers.

 

Video is a major focus area, with VKontakte's revenue from video ads increasing by 6.25x YoY in Q4. VK Video was rolled out in October with DAU of 40mn in Q4. To further drive engagement, an updated video player with automatic Russian subtitles was rolled out in October. In November, a new interface, along with an updated search and recommendations system was released, with the full video catalogue enabled for unregistered users in December. The first series of a VK Video originals generated 44mn views within three months.

 

48mn content creators published content on VKontakte every month in Q4. Creators using VK Donut earned over RUB 53mn in Q4 (+23% QoQ), with the number of public pages using VK Donut up 1.8x and the number of donating subscribers up 2x YoY in 2021.

VK Music, a music streaming app developed on the basis of BOOM that unifies all the music technologies of VK was rolled out in November. VK Studio, a service for musicians, was also launched. >5mn people listen to music with VK Combo subscription premium features.

 

Among the latest social commerce initiatives was the addition of a new tool for VKontakte stores that shows related products.

 

* Source: Mediascope, October 2021, Russia (all cities, age 0+), mobile app

 

Odnoklassniki (OK)

 

Average Russia MAU stood at 38mn in Q4, with high engagement reflected in more than 7.3bn virtual gifts, 731mn postcards and 573mn stickers sent during the quarter.

 

Average mobile games MAU exceeded 13mn. DAU in mobile games grew by 7% YoY in Q4, with penetration exceeding 10% of overall OK mobile DAU. Total payments to game developers exceeded RUB 3.2bn in 2021, with ~40% of payments made to mobile game developers. Total games advertising revenue grew nearly 4x YoY in Q4.

 

Moments MAU reached 27mn in December (+2.2x YoY), with reach exceeding 50% of total OK MAU. The number of views stood at 434mn (+4x YoY) and reactions at 46mn (+4.8x YoY) in Q4.

 

Some of the multiple latest product initiatives include recommended publications within newsfeed, new content formats based on machine learning and AI-algorithms, updated business platform, new social commerce tools, major mobile interface update etc.

 

OK continues to develop advertising based monetization, with the revenue from the internal ads manager within OK up 38% YoY in Q4.

 

Cross-integrations continue, with the launch of VK Mini Apps application on desktop in October, along with the ongoing integration of VK Pay Checkout on the web platform.

 

Games segment (represented by MY.GAMES)

 

MY.GAMES revenue grew by 10.5% YoY in 2021 (to RUB 43.8bn), including 5.1% YoY growth in Q4 (to RUB 11.6bn). ~67% of Q4 revenues came from mobile games (versus 76% in Q4 2020). The share of revenue coming from markets outside of Russia & CIS stood at 73% (versus 77% in Q4 2020), with the top-3 international markets being the US, Germany and the UK. MY.GAMES revenue splits by geographies and platforms in Q4 2021 were affected by strong performance of PC/console games in the quarter (saw traditionally high demand on Russian market) and ongoing adaptation to IDFA-related changes.

 

Average MAU rose by 5.2% QoQ to 22.1mn in Q4, with hyper-casual players of Mamboo Games being the key driver, while the share of monthly paying users was stable at 4.31%.

 

In Q4 2021, MY.GAMES EBITDA grew 163.6% to RUB 3.8bn, with a margin of 32.7%. MY.GAMES reached its goal of doubling EBITDA versus RUB 5.0bn delivered in 2018 a year ahead of schedule, with its 2021 EBITDA reaching RUB 10.4bn.

 

MY.GAMES Venture Capital (MGVC) completed 2 new minority investments in Q4 (Square Triangle and Talerock), with 12 transactions including 2 consolidations (Mamboo Games and Playkey) executed in 2021.

 

Games Segment Performance - Q4 2021 & FY 2021

 

RUB millions	Q4 2020	Q4 2021	YoY, %	FY 2020	FY 2021	YoY, %
Revenue
External revenue	11,055	11,588		39,553	43,671
Intersegment revenue	29	59		102	137
Total revenue	11,084	11,647	5%	39,655	43,808	10%
Total operating expenses	9,638	7,836	-19%	33,320	33,451	0%
EBITDA	1,446	3,811	164%	6,335	10,357	63%
EBITDA margin, %	13%	33%	20pp	16%	24%	8pp

 

Mobile

 

The top-5 revenue-generating mobile titles in Q4 remained War Robots, Rush Royale, Hustle Castle, Grand Hotel Mania and Left to Survive.

 

Game	Initial release	Studio	Genre	Average monthly revenue in Q4 (RUB mn)	Lifetime installs as of December (mn)
War Robots	2014	Pixonic	Shooter	~875	206
Rush Royale	2020	IT Territory	Tower defense	~475	18.3
Hustle Castle	2017	Nord	RPG	~300	72
Left to Survive	2018	Whalekit	Shooter	~150	44.3
Grand Hotel Mania	2020	Deus Craft	Time management	~150	14
Tacticool	2019	Panzerdog	PvP shooter	~125	22
Zero City	2020	Nord	RPG	~75	20
American Dad	2019	Nord	RPG	~75	10
Guild of Heroes	2015	BIT.GAMES	RPG	~50	10
Storyngton Hall	2019	BIT.GAMES	Match-3	~25	5

 

In Q4, Rush Royale from IT Territory became the second-highest revenue-generating title in MY.GAMES portfolio as well as data.ai (ex AppAnnie) number one Tower Defense Strategy game in revenue.

 

PC & Console

 

Game	Initial release	Platform	Studio	Genre	Average monthly revenue in Q4 (RUB mn)	Lifetime registered users as of December (mn)
Warface	2013	PC/ console	GODD	First-person shooter	~475	104
Lost Ark	2019 (License)	PC	GODD	MMORPG	~80	3
Perfect World	2009 (License)	PC	GODD	MMORPG	~70	7
Legend	2006	PC	IT Territory	MMORPG	~60	4

 

The Warface franchise (2013, PC/console/mobile) remains a top-3 revenue generator for MY.GAMES. MY.GAMES will continue expanding its PC portfolio.

 

EdTech segment (represented by Skillbox Holding Limited, which includes Skillbox (100%), Geekbrains (100%), Skillfactory (63.75%), Mentorama (90%), Lerna (70%)

 

The segment continued to demonstrate solid performance in Q4, with revenue rising by ~38% YoY to RUB 3.6bn and RUB 10.4bn in revenue for 2021, in line with guidance.

 

EdTech delivered an EBITDA loss of RUB 0.5bn in Q4 2021 compared to a positive RUB 0.4bn contribution in Q4 2020 due to an increase in personnel and commercial expenses especially marketing expenses to promote seasonal Christmas and New Year discounts, as well as «Black Friday» in December. An increase in the tax burden relative to 2020 also had a negative effect (with minus 1% margin excluding this tax effect). EBITDA margin stood at minus 12.7%, with a slight improvement versus minus 13% in Q3 2021.

 

EdTech Segment Performance - Q4 2021 & FY 2021

 

RUB millions	Q4 2020	Q4 2021	YoY, %	FY 2020	FY 2021	YoY, %
Revenue
External revenue	2,578	3,559		6,100	10,428
Intersegment revenue	0	0		0	2
Total revenue	2,578	3,559	38%	6,100	10,430	71%
Total operating expenses	2,174	4,012	85%	5,046	12,036	139%
EBITDA	404	-453	n/a	1,054	-1,606	n/a
EBITDA margin, %	16%	-13%	(28)pp	17%	-15%	(33)pp

 

The platforms exceeded 9.9mn in combined cumulative registered learners as of the end of December, up 1.5x YoY, with 1.1mn in new registrations during the quarter (excluding the effect of adding the cumulative registered learners of Mentorama and SkillFactory). The cumulative number of paying learners approached 349,000, up 2.1x YoY, with nearly 48,000 new paying learners added during Q4 (excluding the effect of adding the cumulative paid learners of Mentorama and SkillFactory).

 

The units launched 115 new courses and programs (professions and faculties) during Q4. The average check stood at RUB 63,000 in Q4 (+17% YoY).

 

New Initiatives segment

 

The segment's revenue was up 26% to RUB 4.2bn in Q4, with the largest growth contribution coming from recommendation platforms. New Initiatives EBITDA loss amounted to RUB 881m vs a loss of RUB 1.2bn in Q4 2020, and a QoQ improvement versus a loss of RUB 1bn in Q3. EBITDA margin stood at minus 21.2% versus 35.6% in Q4 2020 and minus 35.2% in Q3 due to the ongoing improvement in profitability across most product groups, including Youla, recommendation platforms and B2B (including Cloud).

 

New Initiatives Segment Performance - Q4 2021 & FY 2021

 

RUB millions	Q4 2020	Q4 2021	YoY, %	FY 2020	FY 2021	YoY, %
Revenue
External revenue	3,297	4,136		8,207	11,600
Intersegment revenue	8	16		41	46
Total revenue	3,305	4,152	26%	8,248	11,646	41%
Total operating expenses	4,481	5,033	12%	13,290	15,910	20%
EBITDA	-1,176	-881	-25%	-5,042	-4,264	-15%
EBITDA margin, %	-36%	-21%	15pp	-61%	-37%	24pp

 

Youla (classifieds)

Revenue exceeded RUB 1.1bn in Q4 (+11% YoY), reaching RUB 3.8bn in 2021, meeting the set guidance of RUB 3.6-3.9bn. Revenue growth was driven by the rising share of B2B sales.

 

MAU grew by 18% YoY reaching 39mn in December, stimulated by the ongoing rollout of VK Classifieds, with integration across 195,000 Groups in VKontakte.

 

EBITDA loss as a proportion of revenue continued to decline, with EBITDA margin of minus 20% in Q4 versus minus 59% in Q4 2020.

 

VK Clips (short video)

As of December, VK Clips offered over 11.3mn in short videos (+223% YoY) from more than 2.4mn unique content creators (+118% YoY).

 

Engagement continues to rise, with 368mn in average daily views in Q4 and >430mn in peak views. Time spent per user in Clips grew by 103% YoY in December, with the number of users with 10+ minutes in time spent rising by 135% over the same period.

 

Pulse and Relap (recommendation platforms)

In Q4, Pulse DAU stood at 9.8mn (+74% YoY), with MAU of 77.6mn (+36% YoY). Relap DAU stood at 9.7mn (+23% YoY) in Q4, with MAU of 114mn (+6% YoY). Combined revenue reached RUB 473mn in Q4 (+115% YoY), with RUB 1.3bn in revenue in 2021 (+124% YoY). Timespent per active user increased by 25% YoY to 13 minutes.

 

Joint Ventures

 

O2O JV (equal 45.01% ownership between Sber and VK)

GMV of O2O JV reached 53bn (+34% YoY) in Q4. EBITDA burn stood at minus RUB 6.5bn with e-grocery being the main investment area. At the same time, continuous focus on operational efficiency resulted in an EBITDA margin of minus 12% (as % of GMV), an improvement versus minus 16% in Q3 2021 and minus 21% in Q4 2020.

 

	Q4 2020	Q4 2021	YoY, %	FY 2020	FY 2021	YoY, %
GMV, RUB mn	39,967	53,364	34%	115,612	187,167	62%
EBITDA, RUB mn	(8,548)	(6,507)	-24%	(26,279)	(29,491)	12%
EBITDA margin, as % of GMV	-21%	-12%	9.2%	-23%	-16%	7.0%

 

AliExpress Russia (AER) JV (15% stake held by VK)

Total GMV (excluding services) increased by 46% YoY to RUB 306bn in 2021, with the local business growing by 124% YoY to RUB 110bn to 36% of total GMV. Total number of orders reached 309mn in 2021, with 204,000 (+220% YoY) in average daily local orders in December. The number of active buyers exceeded 28.7mn in 2021 with buyers of local goods growing 2x YoY. Total number of sellers exceeded 400,000 (+69% YoY), with the number of Russian sellers increasing by 193% YoY to 102,500. Further details can be found here: https://press.aliexpress.ru/page25326016.html

 

For further information please contact:

Investors

Tatiana Volochkovich

Phone: +7 495 725 6357 extension: 3434

E-mail:  [email protected]

 

Press

Alina Fedorova
Mobile: +7 916 238 1297
E-mail: [email protected] 

 

Cautionary Statement regarding Forward Looking Statements and Disclaimers

This press release contains statements of expectation and other forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "forecast", "intend", "will", "could", "may" or "might", the negative of such terms or other similar expressions including "outlook" or "guidance". The forward-looking statements in this release are based upon various assumptions that are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and may be beyond the Group's control. Actual results could differ materially from those discussed in the forward-looking statements herein. Many factors could cause actual results to differ materially from those discussed in the forward looking statements included herein, including competition in the marketplace, changes in consumer preferences, the degree of Internet penetration and online advertising in Russia, concerns about data security, claims of intellectual property infringement, adverse media speculation, changes in political, social, legal or economic conditions in Russia, exchange rate fluctuations, and the Group's success in identifying and responding to these and other risks involved in its business, including those referenced under "Risk Factors" in the Group's public filings. The forward-looking statements contained herein speak only as of the date they were made, and the Group does not intend to amend or update these statements except to the extent required by law to reflect events and circumstances occurring after the date hereof.

 

 

About VK

VK develops the ecosystem helping millions of people with their day-to-day needs online. More than 90% of the Russian internet audience use it every day.

The ecosystem enables people to keep in touch (using social networks OK and VKontakte, messaging apps and email service), play video games (via MY.GAMES), get and offer items and services, browse jobs and hire talent (via Youla and VK Jobs), order food and grocery delivery (via Delivery Club, Samokat and Local Kitchen), get a ride (with Citymobil and Citydrive), master new skills (at GeekBrains, Skillbox and other educational services), buy and sell at AliExpress Russia and fulfill other needs.

The VK ecosystem features a number of shared elements bringing the services together. Users can sign in to different services with a single VK ID account, pay and earn cash back with the VK Pay platform, get discounts and deals with VK Combo, access their favorite services via the VK Mini Apps platform - and the Marusya voice assistant can help with any task.

The company offers enterprises to employ its dynamic ecosystem to digitize their business processes, providing a range of solutions from online promotion and predictive analytics to corporate social networks, cloud services and enterprise automation.

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (REGULATION 596/2014/EU) AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

Filing of the Interim Condensed Consolidated Financial Statements for 12m 2021

The Group's interim condensed consolidated financial statements for the nine months ended 31 December 2021 prepared in accordance with IFRS and accompanied by an independent auditor's review report have been filed on the National Storage Mechanism appointed by the Financial Conduct Authority and can be accessed at https://data.fca.org.uk/#/nsm/nationalstoragemechanism or on the Group's website at https://vk.company/media/files/vkifrsfy2021.pdf

 

Group Aggregate Segment Financial Information*

RUB millions	Q4 2020	Q4 2021	YoY, %	12m 2020	12m 2021	YoY, %
Group aggregate segment revenue (1)
Online advertising	12,779	14,659	14.7%	39,004	48,608	24.6%
MMO games	9,802	10,130	3.3%	35,862	37,918	5.7%
Community IVAS	4,904	5,047	2.9%	18,337	18,450	0.6%
Education Technology services	2,578	3,557	38.0%	6,099	10,422	70.9%
Other revenue**	2,916	3,660	25.4%	7,071	10,354	46.4%
Total Group aggregate segment revenue	32,979	37,053	12.4%	106,373	125,752	18.2%
Group aggregate operating expenses
Personnel expenses	7,980	9,724	21.9%	25,253	32,774	29.8%
Agent/partner fees	9,448	9,249	-2.1%	28,997	33,667	16.1%
Marketing expenses	6,897	4,879	-29.3%	19,985	20,707	3.6%
Server hosting expenses	210	218	3.8%	777	853	9.8%
Professional services	333	450	35.1%	960	1,488	55.0%
Other operating (income)/expenses, excl. D&A	841	1,890	124.7%	3,489	4,461	27.9%
Total Group aggregate operating expenses	25,709	26,410	2.7%	79,461	93,950	18.2%
Group aggregate segment EBITDA (2)	7,270	10,643	46.4%	26,912	31,802	18.2%
margin, %	22.0%	28.7%		25.3%	25.3%
Depreciation, amortisation and impairment*** (3)	3,717	4,338	16.7%	11,840	14,750	24.6%
Share of loss of key JVs and equity associates	4,362	5,546	27.1%	11,923	18,915	58.6%
Other non-operating income (expense), net	-855	-821	-4.0%	-2,431	-2,206	-9.3%
Profit/(loss) before tax (4)	-1,664	-62	n/m	718	-4,069	n/m
Income tax expense (5)	969	1,125	16.1%	2,677	2,417	-9.7%
Group aggregate net profit from consolidated subsidiaries (6)	1,729	4,359	n/m	9,964	12,429	24.7%
margin, %	5.2%	11.8%		9.4%	9.9%
Group aggregate net profit/(loss) (7)	-2,633	-1,187	n/m	-1,959	-6,486	n/m
margin, %	-8.0%	-3.2%		-1.8%	-5.2%

 (*) The numbers in this table and further in the document may not exactly foot or cross-foot due to rounding.

(**) Including Other IVAS revenues.

(***) Including the impairment of Love Choice and Ashes of Creation in amount of RUB 327m in Q4 2021.

 

1. Group aggregate segment revenue is calculated by aggregating the segment revenue of the Group's operating segments and eliminating intra-segment and inter-segment revenues. This measure differs in significant respects from IFRS consolidated net revenue. See "Presentation of Aggregate Segment Financial Information" below.
2. Group aggregate segment EBITDA is calculated by subtracting Group aggregate segment operating expenses from Group aggregate segment revenue. Group aggregate segment operating expenses are calculated by aggregating the segment operating expenses (excluding the depreciation and amortisation) of the Group's operating segments including allocated Group's corporate expenses, and eliminating intra-segment and inter-segment expenses. See "Presentation of Aggregate Segment Financial Information".
3. Group aggregate depreciation, amortisation and impairment expense is calculated by aggregating the depreciation, amortisation and impairment expense of the subsidiaries consolidated as of the date hereof, excluding amortisation and impairment of fair value adjustments to intangible assets acquired in business combinations.
4. Profit before tax is calculated by deducting from Group aggregate segment EBITDA Group aggregate depreciation, amortisation and impairment expense and adding/deducting Group aggregate other non-operating incomes/expenses primarily consisting of interest income on cash deposits, interest expenses, dividends from financial and available-for-sale investments and other non-operating items.
5. Group aggregate income tax expense is calculated by aggregating the income tax expense of the subsidiaries consolidated as of the date hereof. Group aggregate income tax expense is different from income tax as would be recorded under IFRS, as it is adjusted for the tax effect of differences in profit before tax between Group aggregate segment financial information and IFRS.
6. Group aggregate net profit from consolidated subsidiaries is the (i) Group aggregate segment EBITDA; less (ii) Group aggregate depreciation, amortisation and impairment expense; less (iii) Group aggregate other non-operating expense; plus (iv) Group aggregate other non-operating income; less (v) Group aggregate income tax expense.
7. Group aggregate net profit is the (i) Group aggregate net profit from consolidated subsidiaries; less (ii) Share of loss of key JVs and equity associates. Group aggregate net profit differs in significant respects from IFRS consolidated net profit. See "Presentation of Aggregate Segment Financial Information".

 

Operating Segments

The composition of the reporting segments reflects the Group's strategy, the way the business is managed and units' interconnection within its eco-system. From the first quarter of 2021 the Group has identified the following reportable segments on this basis:

• Communications and Social;
• Games;
• Education Technologies (EdTech); and
• New initiatives.

The Communications and Social segment includes email, instant messaging and portal (main page and media projects). It earns substantially all revenues from display and context advertising. This segment also aggregates the Group's social network Vkontakte (VK) and two other social networks (OK and My World) and earns revenues from (i) commission from application developers based on the respective applications' revenue, (ii) user payments for virtual gifts, stickers and music subscriptions and (iii) online advertising, including display and context advertising. It also includes Search and music services (UMA). These businesses have similar nature and economic characteristics as they are represented by social networks and online communications, common type of customers for their products and services and are regulated under similar regulatory environment.

The Games segment includes online gaming services, including MMO, social and mobile games operated by the Group. It earns substantially all revenues from (i) sale of virtual in-game items to users, (ii) royalties for games licensed to third-party online game operators and (iii) in-game advertising.

The Education Technologies (EdTech) segment includes our consolidated education businesses presented by GeekBrains and Skillbox. The businesses earn substantially all revenues from education technology services.

The New initiatives segment primarily consists of Youla classifieds earning substantially all revenues from advertising and listing fees, VK Clips with potential to become a major separate product with the planned launch of own application and target presence across the various Group's services, B2B new projects including cloud along with other services, which are considered insignificant by the CODM for the purposes of performance review and resource allocation.

Each segment's EBITDA is calculated as the respective segment's revenue less operating expenses (excluding depreciation and amortisation and impairment of intangible assets), including our corporate expenses allocated to the respective segment.

Operating Segments Performance - Q4 2021

RUB millions	Communications and Social	Games	EdTech	New initiatives	Eliminations	Group
Revenue
External revenue	17,770	11,588	3,559	4,136	-	37,053
Intersegment revenue	106	59	-	16	(181)	-
Total revenue	17,876	11,647	3,559	4,152	(181)	37,053
Total operating expenses	9,710	7,836	4,012	5,033	(181)	26,410
EBITDA	8,166	3,811	(453)	(881)	-	10,643
EBITDA margin, %	45.7%	32.7%	-12.7%	-21.2%	0.0%	28.7%
Net profit from consolidated subsidiaries						4,359
Net profit from consolidated subsidiaries margin, %						11.8%
Share of loss of equity accounted associates and joint ventures						(5,546)
Aliexpress Russia JV						(2,213)
O2O JV						(3,325)
Umskul associate						(34)
Uchi.ru associate						26
Net loss						(1,187)
Net loss margin, %						-3.2%

 

Operating Segments Performance - Q4 2020

RUB millions	Communications and Social	Games	EdTech	New initiatives	Eliminations	Group
Revenue
External revenue	16,049	11,055	2,578	3,297	-	32,979
Intersegment revenue	175	29	-	8	(212)	-
Total revenue	16,224	11,084	2,578	3,305	(212)	32,979
Total operating expenses	9,628	9,638	2,174	4,481	(212)	25,709
EBITDA	6,596	1,446	404	(1,176)	-	7,270
EBITDA margin, %	40.7%	13.0%	15.7%	-35.6%	0.0%	22.0%
Net profit from consolidated subsidiaries						1,729
Net profit from consolidated subsidiaries margin, %						5.2%
Share of loss of joint ventures						(4,362)
Aliexpress Russia JV						(655)
O2O JV						(3,707)
Net loss						(2,633)
Net loss margin, %						-8.0%

 

Operating Segments Performance - 12m 2021

RUB millions	Communications and Social	Games	EdTech	New initiatives	Eliminations	Group
Revenue
External revenue	60,053	43,671	10,428	11,600	-	125,752
Intersegment revenue	328	137	2	46	(513)	-
Total revenue	60,381	43,808	10,430	11,646	(513)	125,752
Total operating expenses	33,066	33,451	12,036	15,910	(513)	93,950
EBITDA	27,315	10,357	(1,606)	(4,264)	-	31,802
EBITDA margin, %	45.2%	23.6%	-15.4%	-36.6%	0.0%	25.3%
Net profit from consolidated subsidiaries						12,429
Net profit from consolidated subsidiaries margin, %						9.9%
Share of loss of equity accounted associates and joint ventures						(18,915)
Aliexpress Russia JV						(4,392)
O2O JV						(14,423)
Umskul associate						(34)
Uchi.ru associate						(66)
Net loss						(6,486)
Net loss margin, %						-5.2%

 

Operating Segments Performance - 12m 2020

RUB millions	Communications and Social	Games	EdTech	New initiatives	Eliminations	Group
Revenue
External revenue	52,513	39,553	6,100	8,207	-	106,373
Intersegment revenue	172	102	-	41	(315)	-
Total revenue	52,685	39,655	6,100	8,248	(315)	106,373
Total operating expenses	28,120	33,320	5,046	13,290	(315)	79,461
EBITDA	24,565	6,335	1,054	(5,042)	-	26,912
EBITDA margin, %	46.6%	16.0%	17.3%	-61.1%	0.0%	25.3%
Net profit from consolidated subsidiaries						9,964
Net profit from consolidated subsidiaries margin, %						9.4%
Share of loss of joint ventures						(11,923)
Aliexpress Russia JV						(1,350)
O2O JV						(10,573)
Net loss						(1,959)
Net loss margin, %						-1.8%

 

Liquidity

As of 31 December 2021, the Group had RUB 23,737 million of cash and cash equivalents and RUB 58,767 million of debt outstanding (excluding lease liabilities). The Group's net debt position was RUB 35,030 million excluding lease liabilities and RUB 50,478 million including lease liabilities.

 

Presentation of Aggregate Segment Financial Information

The Group aggregate segment financial information is derived from the financial information used by management to manage the Group's business by aggregating the segment financial data of the Group's operating segments and eliminating intra-segment and inter-segment revenues and expenses. Group aggregate segment financial information differs significantly from the financial information presented on the face of the Group's consolidated financial statements in accordance with IFRS. In particular:

• The Group's segment financial information excludes certain IFRS adjustments which are not analysed by management in assessing the core operating performance of the business. Such adjustments affect such major areas as revenue recognition, share-based payment transactions, disposal of and impairment of investments, fair value adjustments, amortisation and impairment thereof, net foreign exchange gains and losses, as well as irregular non-recurring items that occur from time to time and are evaluated for adjustment as and when they occur. The tax effect of these adjustments is also excluded from segment reporting.
• In 2021 the Group changed the approach to the presentation and composition of reporting segments in order to better reflect the Group's strategy and the way the business is managed. From the first quarter of 2021 the Group has presented reportable segments based on the consolidation scope as determined in accordance with IFRS, a change from previously applying a pro forma approach to acquisitions, disposals and assets held for sale.
• Segment revenues do not reflect certain other adjustments required when presenting consolidated revenues under IFRS. For example, segment revenue excludes barter revenues and adjustments to defer online gaming, social network and education revenues under IFRS.

 

A reconciliation of group aggregate segment revenue, as presented to the CODM, to IFRS consolidated revenue of the Group for the three months ended December 31, 2021 and 2020 is presented below:

 

RUB millions	Q4 2021	Q4 2020
Group aggregate segment revenue, as presented to the CODM	37,053	32,979
Adjustments to reconcile revenue as presented to the CODM to consolidated revenue under IFRS:
Differences in timing of revenue recognition	1,544	(1,663)
Consolidated revenue under IFRS	38,597	31,316

 

A reconciliation of group aggregate segment EBITDA, as presented to the CODM, to IFRS consolidated loss before income tax expense of the Group for the three months ended December 31, 2021 and 2020 is presented below:

 

RUB millions	Q4 2021	Q4 2020
Group aggregate segment EBITDA, as presented to the CODM	10,643	7,270
Adjustments to reconcile EBITDA as presented to the CODM to consolidated loss before income tax expenses under IFRS
Differences in timing of revenue recognition	1,544	(1,663)
Share-based payment transactions	(1,380)	(390)
Expected credit loss on consideration receivable	(81)	-
Other	(1)	117
EBITDA	10,725	5,334
Depreciation and amortisation	(4,966)	(4,612)
Impairment of fair value adjustments to intangible assets	(1,714)	(285)
Share of loss of equity accounted associates and joint ventures	(6,986)	(9,565)
Finance income	253	56
Finance expenses	(1,343)	(1,101)
Other non-operating loss	(222)	(186)
Goodwill impairment	-	(620)
Net gain on financial assets and liabilities at fair value through profit or loss	677	1,756
Net gain on disposal of subsidiaries	-	1,437
Impairment of equity accounted associates	(559)	-
Net loss on disposal of intangible assets	-	(124)
Loss on remeasurement of financial instruments	(429)	(97)
Net foreign exchange (loss)/gain	(950)	11
Consolidated loss before income tax expense under IFRS	(5,514)	(7,996)

 

A reconciliation of group aggregate net loss, as presented to the CODM, to IFRS consolidated net loss of the Group for the three months ended December 31, 2021 and 2020 is presented below:

 

RUB millions	Q4 2021	Q4 2020
Group aggregate net loss, as presented to CODM	(1,187)	(2,633)
Adjustments to reconcile net loss as presented to the CODM to consolidated net loss under IFRS
Differences in timing of revenue recognition	1,544	(1,663)
Share-based payment transactions	(1,380)	(390)
Expected credit loss on consideration receivable	(81)	-
Other non-operating loss	(222)	(186)
Goodwill impairment	-	(620)
Impairment of fair value adjustments to intangible assets	(1,387)	(285)
Net gain on disposal of subsidiaries	-	1,437
Net loss on disposal of intangible assets	-	(124)
Net gain on financial assets and liabilities at fair value through profit or loss	677	1,756
Impairment of equity accounted associates	(559)	-
Loss on remeasurement of financial instruments	(429)	(97)
Net foreign exchange (loss)/gain	(950)	11
Amortisation of fair value adjustments to intangible assets	(954)	(899)
Net loss on financial liabilities at amortised cost	(233)	-
Differences in recognition of net share in loss of equity accounted associates and joint ventures	(1,440)	(5,203)
Other	(18)	(69)
Tax effect of the adjustments	710	(110)
Consolidated net loss under IFRS	(5,909)	(9,075)

 

A reconciliation of group aggregate segment revenue, as presented to the CODM, to IFRS consolidated revenue of the Group for the twelve months ended December 31, 2021 and 2020 is presented below:

 

RUB millions	FY 2021	FY 2020
Group aggregate segment revenue, as presented to the CODM	125,752	106,373
Adjustments to reconcile revenue as presented to the CODM to consolidated revenue under IFRS:
Differences in timing of revenue recognition	309	(5,831)
Consolidated revenue under IFRS	126,061	100,542

 

A reconciliation of group aggregate segment EBITDA, as presented to the CODM, to IFRS consolidated loss before income tax expense of the Group for the twelve months ended December 31, 2021 and 2020 is presented below:

 

RUB millions	FY 2021	FY 2020
Group aggregate segment EBITDA, as presented to the CODM	31,802	26,912
Adjustments to reconcile EBITDA as presented to the CODM to consolidated loss before income tax expenses under IFRS
Differences in timing of revenue recognition	309	(5,831)
Share-based payment transactions	(2,091)	(1,770)
Expected credit loss on consideration receivable	(554)	-
Other	(19)	(32)
EBITDA	29,447	19,279
Depreciation and amortisation	(18,371)	(15,138)
Impairment of fair value adjustments to intangible assets	(1,714)	(285)
Share of loss of equity accounted associates and joint ventures	(21,167)	(19,892)
Finance income	969	336
Finance expenses	(4,253)	(2,969)
Other non-operating loss	(197)	(163)
Goodwill impairment	-	(7,050)
Net gain on financial assets and liabilities at fair value through profit or loss	2,700	5,281
Net gain on disposal of subsidiary	-	1,437
Impairment of equity accounted associates	(559)	(260)
Net loss on disposal of intangible assets	-	(124)
Gain on remeasurement of previously held interest in equity accounted associate	305	46
Loss on remeasurement of financial instruments	(843)	(327)
Net foreign exchange (loss)/gain	(943)	436
Consolidated loss before income tax expense under IFRS	(14,626)	(19,393)

 

A reconciliation of group aggregate net loss, as presented to the CODM, to IFRS consolidated net loss of the Group for the twelve months ended December 31, 2021 and 2020 is presented below:

 

RUB millions	FY 2021	FY 2020
Group aggregate net loss, as presented to CODM	(6,486)	(1,959)
Adjustments to reconcile net loss as presented to the CODM to consolidated net loss under IFRS
Differences in timing of revenue recognition	309	(5,831)
Share-based payment transactions	(2,091)	(1,770)
Expected credit loss on consideration receivable	(554)	-
Other non-operating loss	(197)	(163)
Goodwill impairment	-	(7,050)
Impairment of fair value adjustments to intangible assets	(1,387)	(285)
Net gain on disposal of subsidiaries	-	1,437
Net loss on disposal of intangible assets	-	(124)
Net gain on financial assets and liabilities at fair value through profit or loss	2,700	5,281
Impairment of equity accounted associates	(559)	(260)
Gain on remeasurement of previously held interest in equity accounted associate	305	46
Loss on remeasurement of financial instruments	(843)	(327)
Net foreign exchange (loss)/gain	(943)	436
Amortisation of fair value adjustments to intangible assets	(3,947)	(3,298)
Net loss on financial liabilities at amortised cost	(892)	-
Differences in recognition of net share in loss of equity accounted associates and joint ventures	(2,252)	(7,969)
Other	(186)	(234)
Tax effect of the adjustments	1,326	844
Consolidated net loss under IFRS	(15,697)	(21,226)

 

Consolidated IFRS Statement of Financial Position

RUB millions	December 31, 2021 (audited)	December 31, 2020 (audited)
ASSETS
Non-current assets
Investments in equity accounted associates and joint ventures	48,921	41,948
Goodwill	138,600	135,670
Right-of-use assets	14,843	15,618
Other intangible assets	18,324	19,623
Property and equipment	15,798	11,651
Financial assets at fair value through profit or loss	6,903	2,305
Deferred income tax assets	5,157	2,924
Long-term loans receivable	69	422
Advance under office lease contract	462	249
Total non-current assets	249,077	230,410
Current assets
Trade accounts receivable	20,688	16,707
Prepaid income tax	359	358
Prepaid expenses and advances to suppliers	2,353	853
Loans receivable	109	2,441
Inventories	157	98
Other current assets	1,445	1,247
Cash and cash equivalents	23,737	39,297
Total current assets	48,848	61,001
Total assets	297,925	291,411
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Issued capital	-	-
Share premium	79,397	77,101
Treasury shares	(1,044)	(1,071)
Retained earnings	89,985	103,103
Accumulated other comprehensive income	1,578	1,195
Total equity attributable to equity holders of the parent	169,916	180,328
Non-controlling interests	346	1,663
Total equity	170,262	181,991
Non-current liabilities
Deferred income tax liabilities	1,228	1,379
Deferred revenue	1,455	1,871
Non-current lease liabilities	11,327	11,338
Financial liabilities at fair value through profit or loss, non-current	879	3,506
Long-term interest-bearing loans and borrowings	50,810	41,497
Other non-current liabilities	522	265
Total non-current liabilities	66,221	59,856
Current liabilities
Trade accounts payable	14,541	10,923
Income tax payable	3,208	2,673
VAT and other taxes payable	4,391	2,259
Deferred revenue and customer advances	17,980	16,912
Short-term portion of long-term interest-bearing loans	7,078	3,718
Current lease liabilities	4,121	3,861
Other payables, accrued expenses and contingent consideration liabilities	10,123	9,218
Total current liabilities	61,442	49,564
Total liabilities	127,663	109,420
Total equity and liabilities	297,925	291,411

 

 

Consolidated IFRS Statement of Comprehensive Income

RUB millions	FY2021	FY2020
Online advertising	48,686	39,008
MMO games	38,327	32,769
Community IVAS	18,387	18,215
Education technology services	10,651	3,461
Other revenue	10,010	7,089
Total revenue	126,061	100,542
Personnel expenses	(34,864)	(27,023)
Agent/partner fees	(33,680)	(29,001)
Marketing expenses	(20,706)	(19,994)
Server hosting expenses	(853)	(777)
Professional services	(1,501)	(973)
Other operating expenses	(5,010)	(3,495)
Total operating expenses	(96,614)	(81,263)
EBITDA	29,447	19,279
Depreciation and amortisation	(18,371)	(15,138)
Impairment of intangible assets	(1,714)	(285)
Share of loss of equity accounted associates and joint ventures	(21,167)	(19,892)
Finance income	969	336
Finance expenses	(4,253)	(2,969)
Other non-operating loss	(197)	(163)
Goodwill impairment	-	(7,050)
Net gain on financial assets and liabilities at fair value through profit or loss	2,700	5,281
Net gain on loss of control over subsidiaries	-	1,437
Impairment of equity accounted associates	(559)	(260)
Net loss on disposal of intangible assets	-	(124)
Gain on remeasurement of previously held interest in equity accounted associates	305	46
Loss on remeasurement of financial instruments	(843)	(327)
Net foreign exchange (loss)/gain	(943)	436
Loss before income tax expense	(14,626)	(19,393)
Income tax expense	(1,071)	(1,833)
Net loss	(15,697)	(21,226)
Attributable to:
Equity holders of the parent	(15,493)	(20,921)
Non-controlling interests	(204)	(305)
Other comprehensive income that may be reclassified to profit or loss in subsequent periods
Other comprehensive income that may be reclassified to profit or loss in subsequent periods	383	1,025
Total other comprehensive income net of tax effect of 0	383	1,025
Total comprehensive loss, net of tax	(15,314)	(20,201)
Attributable to:
Equity holders of the parent	(15,110)	(19,896)
Non-controlling interests	(204)	(305)
Loss per share, in RUB:
Basic loss per share attributable to ordinary equity holders of the parent	(69.00)	(95.00)
Diluted earnings per share attributable to ordinary equity holders of the parent	n/a	n/a

Consolidated IFRS Statement of Cash Flows

RUB millions	Twelve months ended December 31, 2021	Twelve months ended December 31, 2020
Cash flows from operating activities
Loss before income tax	(14,626)	(19,393)
Adjustments to reconcile loss before income tax to cash flows:
Depreciation and amortisation	18,371	15,138
Impairment of intangible assets	1,714	285
Share of loss of equity accounted associates and joint ventures	21,167	19,892
Finance income	(969)	(336)
Finance expenses	4,253	2,969
Expected credit loss allowance on trade and other receivables	418	183
Goodwill impairment	-	7,050
Net gain on financial assets and liabilities at fair value through profit or loss	(2,700)	(5,281)
Net gain on disposal of subsidiaries	-	(1,437)
Impairment of equity accounted associates	559	260
Net loss on disposal of intangible assets	-	124
Gain on remeasurement of previously held interest in equity accounted associates	(305)	(46)
Loss on remeasurement of financial instruments	843	327
Net foreign exchange loss/(gain)	943	(436)
Сash settled and equity settled share-based payments	2,091	1,770
Other non-cash items	227	173
Change in operating assets and liabilities:
Increase in accounts receivable	(3,912)	(1,949)
(Increase)/decrease in prepaid expenses and advances to suppliers	(1,512)	296
(Increase)/decrease in inventories and other assets	(960)	166
Increase in accounts payable and accrued expenses	5,700	2,469
Decrease/(increase) in other non-current assets	205	(128)
Increase in deferred revenue and customer advances	86	5,832
Increase in financial assets at fair value through profit or loss	(5,129)	(415)
Operating cash flows before interest and income taxes	26,464	27,513
Interest received	393	370
Interest paid	(2,977)	(2,564)
Income tax paid	(2,968)	(2,298)
Net cash provided by operating activities	20,912	23,021
Cash flows from investing activities
Cash paid for property and equipment	(8,767)	(6,730)
Cash paid for intangible assets	(6,346)	(4,388)
Dividends received from equity accounted associates	891	29
Loans issued	(15,959)	(2,803)
Loans collected	348	515
Cash paid for acquisitions of subsidiaries, net of cash acquired	(3,503)	(804)
Proceeds from disposal of subsidiaries, net of cash disposed	-	1,090
Cash paid for investments in equity accounted associates and joint ventures	(11,767)	(17,318)
Net cash used in investing activities	(45,103)	(30,409)
Cash flows from financing activities
Payment of lease liabilities	(3,783)	(4,023)
Loans received, net of bank commission	21	14,346
Loans repaid	(3,718)	(17,595)
Proceeds from bonds issued	15,000	30,944
Proceeds from issuance of GDR, net of issuance costs paid	-	15,209
Cash received from disposal of non-controlling interests in subsidiaries	1,486	-
Cash paid for non-controlling interests in subsidiaries	(20)	(947)
Dividends paid by subsidiaries to non-controlling shareholders	(215)	(237)
Net cash provided by financing activities	8,771	37,697
Net (decrease)/increase in cash and cash equivalents	(15,420)	30,309
Effect of exchange differences on cash balances	(140)	(837)
Cash and cash equivalents at the beginning of the year	39,297	9,825
Cash and cash equivalents at the end of the year	23,737	39,297