Feb. 24 (Bloomberg) -- Mail.ru Group Ltd., the largest Russian-language Internet company, soared to a 13-month high after reporting a tripling in second-half net income and forecasting margins of 50 percent this year.
Global depositary receipts of Mail.ru, which holds stakes in Internet companies Facebook Inc., Groupon Inc. and Zynga Inc., jumped 8.2 percent to close at $38.20 in London, the highest level since Jan. 26, 2011. The GDRs are up 47 percent in 2012, the best start to a year since the stock started trading in November 2010.
Net income in the second half of 2011 rose to $122.9 million from a year earlier, while revenue increased 53 percent to $286.8 million, the Moscow-based company said in a statement today. Mail.ru is “very comfortable” with an outlook for margin, a measure of profitability, of 50 percent for this year and saw more revenue from advertising than it expected in the fourth quarter, Chief Executive Officer Dmitry Grishin said.
“Today’s trading update is strong and the company’s outlook is favorable,” David Ferguson and Anastasia Demidova, Moscow-based analysts at brokerage Renaissance Capital, wrote in a report e-mailed today. “We see scope for further share-price outperformance from Mail.”
The company plans to reinvest some of the margin, Grishin said on a conference call for investors today.
Mail.ru is currently testing a multimedia blogging service, Chief Operating Officer Verdi Israelian said during the call.
“The service is at an early stage,” Israelian said. “We are very happy with early results.”
The company plans to hone its focus on developing products, including games, for mobile devices as that segment of the market has the potential to drive user growth in the long term, he said.
American depositary receipts of Yandex NV, Russia’s most popular search engine and a Mail.ru competitor, slipped 1.2 percent to $22.70 by 12:47 p.m. in New York.
Renaissance continues to prefer Mail.ru stock over Yandex, the analysts said in their report.
--Editors: Emma O’Brien, Marie-France Han
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