Online guide to the Russian tech market
Home News Ben Hopkins

Yandex - "Conflict in Ukraine could harm our business"

0 8 April 2014

Yandex have made two important amendments to the ‘risks’ sections of their annual report. 

The first is related to the national parliament (the Duma), whose enthusiasm for law-making frequently triggers “rapid or unexpected changes in the legislative framework.” However, it is the second change that is most interesting, as it relates to the unfolding situation in Crimea.

Yandex states that “the current geopolitical conflict in Ukraine… may adversely affect the Russian economy and the value of investments in Russia, and could harm our business, financial conditions and results of operations”. 

The statement goes on to outline the events of the past few months, leading to Crimea’s accession to the Russian Federation and subsequent sanctions imposed on Russian officials by US and European governments. 

Specifically, Yandex says that “political and economic sanctions may affect the ability of our international customers to operate in Russia, which would negatively impact our revenue and profitability”, while adding that sanctions “could impede our ability to effectively manage our legal entities and operation outside of Russia”. The firm, which is domiciled in the Netherlands, collected 7% of its revenues from outside of Russia in 2013 and is also in the process of building a data center in Finland. 

The company also expresses concern about its share price, pointing out that a combination of lack of confidence and pressure on foreign investors “may result in trading volatility, reduced liquidity and significant declines”. Yandex shares have already lost 19% of their value since the Ukrainian government was forced out on 18th February. 

However, Yandex was keen to play down these risks after its statement caused a bit of a storm on the Russian internet. In an official statement it pointed out that

“an annual report is a legal document with a prescribed format. We are obliged to outline all hypothetical risks, even if there is almost zero chance of them actually happening. All companies listed on Nasdaq do the same - we are not the first and won’t be the last. That we have mentioned these possibilities in our annual report does not mean that we think they are going to take place.”

Source: Roem

More on the topic

comments powered by Disqus

Author

via social network

Facebook
Google
Twitter
Linked in
Vkontakte