Form 6-K Cian PLC For: Aug 17

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO SECTION 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2022

 

Commission File Number: 001-40986

 

 

Cian PLC

(Translation of registrant’s name into English)

 

 

64 Agiou Georgiou Makri

Anna Maria Lena Court, Flat 201

Larnaca, 6037

Cyprus

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  x            Form 40-F  ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

 

 

On August 17, 2022, Cian PLC issued press announcing its financial results for the quarter and six months ended June 30, 2022, a copy of which is furnished herewith as Exhibit 99.1 to this Report on Form 6-K.

 

Exhibit No.		Description
99.1		“Cian PLC Announces Second Quarter and Six Months 2022 Financial Results” press release of Cian PLC, dated August 17, 2022

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Cian PLC
Date: August 17, 2022	By:	/s/ Dmitriy Grigoriev
		Dmitriy Grigoriev
		Chief Executive Officer

 

 

Exhibit 99.1

 

 

 

Cian PLC Announces Second Quarter and Six Months 2022 Financial Results

  

Larnaca, Cyprus, August 17, 2022 – Cian PLC (NYSE: CIAN, MOEX: CIAN) (“Cian”, the “Group” or the “Company”), a leading online real estate classifieds platform in Russia, today announced its financial results for the second quarter and six months ended June 30, 2022.

 

Second Quarter 2022 Key Financial and Operational Highlights¹

 

	•	Revenue increased by 31% Y-o-Y to RUB 1,905 million ($37.2 million).
	•	Loss for the period amounted to RUB 433 million ($8.5 million) due to foreign currency exchange loss described in the corresponding section below.
	•	Adjusted EBITDA2 increased by 303% Y-o-Y and reached RUB 480 million ($9.4 million).
	•	Adjusted EBITDA Margin2 increased by 17 ppt Y-o-Y to 25.2%.
	•	Average UMV (Unique Monthly Visitors)3 decreased by 13% Y-o-Y to 17.3 million.
	•	Core Business revenue increased by 30% Y-o-Y to RUB 1,781 million ($34.8 million).
	•	Core Business Adjusted EBITDA4 increased by 106% Y-o-Y to RUB 645 million ($12.6 million).
	•	Core Business Adjusted EBITDA Margin2,5 improved by 13 ppt Y-o-Y and reached 36.2%.

Six Months 2022 Key Financial and Operational Highlights¹

	•	Revenue increased by 34% Y-o-Y to RUB 3,631 million ($71.0 million).
	•	Loss for the period amounted to RUB 389 million ($7.6 million).
	•	Adjusted EBITDA2 increased by 951% Y-o-Y and reached RUB 536 million ($10.5 million).
	•	Adjusted EBITDA Margin2 increased by 13 ppt and amounted to 14.8%.
	•	Average UMV (Unique Monthly Visitors)3 decreased by 11% Y-o-Y to 18.2 million.
	•	Core Business revenue increased by 33% Y-o-Y to RUB 3,403 million ($66.5 million).
	•	Core Business Adjusted EBITDA4 increased by 103% Y-o-Y to RUB 906 million ($17.7 million).
	•	Core Business Adjusted EBITDA Margin2,5 improved by 9 ppt Y-o-Y and reached 26.6%.

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

² Adjusted EBITDA, Adjusted EBITDA Margin and Core Business Adjusted EBITDA Margin are non-IFRS measures. See “Non-IFRS Financial Measures and Supplemental Financial Information” elsewhere in this release for a description of these measures and their reconciliation from the most directly comparable IFRS financial measures.

³ Average Unique Monthly Visitors (UMV) means the average number of users and customers visiting our platform (websites and mobile application) per month in a particular period, excluding bots. Average UMV for a particular period is calculated by aggregating the UMV for each month within such period and dividing by the number of months. For 2021 and 2022, Average UMV is calculated as a sum of Average UMV for the Cian Group (excluding the N1 Group) based on Google Analytics data and Average UMV for the N1 Group based on Yandex.Metrica data.

⁴ Core Business Adjusted EBITDA, Mortgage Marketplace Adjusted EBITDA, Valuation and Analytics Adjusted EBITDA, C2C Rental Adjusted EBITDA and End-to-End Offerings Adjusted EBITDA presented in this release are our segment measures of profit or loss and, therefore, are not considered non-IFRS financial measures. See “Non-IFRS Financial Measures and Supplemental Financial Information” elsewhere in this release for further information.

⁵ Defined as Core Business Adjusted EBITDA divided by Core Business revenue for the respective periods.

 

 

Dmitriy Grigoriev, Chief Executive Officer of Cian PLC, commented: “We are pleased with the growth of the Cian business during the second quarter, especially as we have been operating in unprecedentedly adverse market conditions. Our focus has been on delivering revenue growth in our Core Business while maintaining operating expense discipline.

 

The Core Business revenue growth was the result of a strong uptick in our listing and lead generation revenue from the Moscow and Moscow region, strong increase in demand for leads from developers following market cooldown, and the successful roll out of price increases in key segments of the market. As our revenue levels are being restored, we resumed our spendings as well.”

 

 

Second Quarter and Six Months 2022 Results

 

Factors affecting year-over-year trends and comparisons

 

We believe that trends in the real estate market in the first half of 2022 were particularly characterized by the following events: (i) the key interest rate increase to 20.0% in late February 2022 which, in combination with tight subsidized mortgage limits, led to an overall decrease in the demand mortgages and subsequently for primary and secondary real estate; (ii) the gradual decrease of the key interest rate (from 20.0% in late February to 8.0% since late July) by the Central Bank of the Russian Federation (CBR) and recovery in subsidized mortgage programs both by the Government and developers led to a gradual demand recovery from the second half of May.

 

Second Quarter 2022 Results

 

Audience

 

Average UMV (Unique Monthly Visitors) for the three months ended June 30, 2022 decreased by 13% Y-o-Y to 17.3 million. This decline in visitors was mainly driven by the overall decrease in demand for primary and secondary real estate following the key interest rate hike in February 2022. In response to this uncertainty and decreased overall demand for real estate, the Company decreased its marketing expenses to avoid ineffective spending.

 

Revenue

 

Revenue for the three months ended June 30, 2022 amounted to RUB 1,905 million compared to RUB 1,372 million for the three months ended June 30, 2021, an increase of RUB 449 million, or 31%. The revenue increase was primarily driven by growth in the Core Business segment.

 

The following table outlines a breakdown of revenue by segment and type for the periods indicated (in millions of RUB and USD):

 

		Three months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022				Y-o-Y growth
		RUB				RUB				USD (1)
Total Revenue			1,456				1,905				37.2				31	%
Core Business, including			1,372				1,781				34.8				30	%
Listing revenue			943				1,143				22.3				21	%
Lead generation revenue			295				487				9.5				65	%
Display advertising revenue			133				144				2.8				8	%
Mortgage Marketplace			74				31				0.6				-58	%
Valuation and Analytics			9				15				0.3				67	%
C2C Rental			1				-				-				-
End-to-End Offerings			-				78				1.5				-

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

 

Core Business segment revenue

 

Core Business revenue reached RUB 1,781 million for the three months ended June 30, 2022, an increase of 30% from RUB 1,372 million for the three months ended June 30, 2021. Core Business revenue growth was driven by strong performance across all key revenue streams – listing revenue, lead generation, and display advertising revenue.

 

Listing revenue (secondary and commercial real estate verticals)

 

Listing revenue increased by 21% to RUB 1,143 million for the three months ended June 30, 2022 from RUB 943 million for the same period of the prior year.

 

The following table presents the listing revenue, the number of listings and the average daily revenue per listing for the periods indicated:

 

		Three months ended (unaudited)
		June 30, 2021				June 30, 2022				Y-o-Y growth
Listing revenue, including (RUB, million)			943				1,143				21	%
Moscow and Moscow Region			642				794				24	%
Other Russian Regions			301				349				16	%
Listings(1), including (million)			2.25				1.86				(17	)%
Moscow and Moscow Region			0.32				0.35				9	%
Other Russian Regions			1.93				1.51				(22	)%
Average daily revenue per listing(2) (RUB)			4.6				6.8				48	%
Moscow and Moscow Region			22.0				24.9				13	%
Other Russian Regions			1.7				2.5				53	%

 

¹ Listings means the daily average number of real estate listings posted on our platform by agents and individual sellers for a particular period

² Average daily revenue per listing is calculated as listing revenue divided (i) by the total number of listings for the corresponding period and (ii) by the number of days during the period

 

The growth of the Core Business listing revenue was primarily driven by the following factors:

 

	(i)	re-launch of paid listing services following their temporary suspension from April 2020 due to the COVID-19 pandemic; and
	(ii)	listings services price increases, which were implemented as a part of a regular review of listing rates.

 

In the three months ended June 30, 2022, we had approximately 1.86 million listings on our platform, compared to approximately 2.25 million in the three months ended June 30, 2021. The decrease in the number of listings from the Other Russian Regions was predominantly driven by monetization re-introduction and price increases. Meanwhile, a 10% Y-o-Y growth of content in Moscow and the Moscow region was the important driver of listing revenue growth in this region. Since April, the number of listings has been increasing M-o-M. The Company’s successful “+30% of content for free” campaign also contributed to the growth of listings.

 

 

Lead generation and display advertising revenue (primary real estate vertical)

 

Lead generation revenue increased by 65% to RUB 487 million in the three months ended June 30, 2022 from RUB 295 million in the three months ended June 30, 2021. Display advertising revenue increased by 8% to RUB 144 million for the three months ended June 30, 2022.

 

Lead generation revenue growth was mainly driven by the increase in the average revenue per lead to developers as a result of more active participation of developers in auctions¹, higher investment by developers in value-added services, price increases, and a new tariff roll-out.

 

Mortgage marketplace segment revenue

 

Mortgage Marketplace revenue was RUB 31 million for the three months ended June 30, 2022 compared to RUB 74 million for the same period of the prior year, corresponding to a decrease of RUB 43 million or 58%. This decrease was due to the key interest rate hike in late February. This segment grew during the second quarter due to general recovery in the market as a result of the gradual key interest rate decrease and re-introduction of subsidized mortgage programs by the government and developers.

 

Operating expenses

 

Total operating expenses decreased by 39% to RUB 1,674 million in the three months ended June 30, 2022 compared with RUB 2,737 million in the three months ended June 30, 2021, primarily driven by a decrease in marketing and employee-related expenses.

 

The following table sets forth a breakdown of our operating expenses for the periods indicated (in millions of RUB and USD):

 

		Three months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022				Y-o-Y growth
		RUB				RUB				USD (1)
Operating expenses			2,737				1,674				32.7				-39	%
Marketing expenses			524				349				6.8				-33	%
Employee-related expenses, including			1,833				906				17.7				-51	%
Wages, salaries and related taxes			567				708				13.8				25	%
Share-based payment expense			1,242				178				3.5				-86	%
IT expenses			133				126				2.5				-5	%
Depreciation and amortization			70				71				1.4				1	%
Other operating expenses			177				222				4.3				25	%
IPO related expenses			88				-				-				-

 

Employee-related expenses

 

Employee-related expenses decreased by 51% to RUB 906 million in the three months ended June 30, 2022 from RUB 1,833 million in the three months ended June 30, 2021. This was mainly due to a decrease in the share-based payment expense, as the previous Phantom Share Program was settled upon the IPO. Wages, salaries, and related taxes and other employee-related expenses were a total of RUB 708 million for the three months ended June 30, 2022 compared to RUB 567 million for the three months ended June 30, 2021. This increase was primarily due to headcount growth and salary growth in line with the market level.

 

¹ Auction – a tool on Cian’s platform that provides customers with an opportunity to place an auction bid to raise the ranking of their listings in search results.

² Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

 

Wages, salaries and related taxes as a percentage of revenue decreased year-over-year from 38.9% for the second quarter of 2021 to 37.2% for the second quarter of 2022.

 

Marketing expenses

 

Marketing expenses decreased to RUB 349 million in the three months ended June 30, 2022 from RUB 524 million in the three months ended June 30, 2021. This decrease was primarily driven by lower spending on online marketing due to the uncertainty on the mortgage market and limited visibility on the broader economic situation.

 

Marketing expenses as a percentage of revenue decreased to 18.3% in the second quarter of 2022 from 36.0% in the second quarter of 2021.

 

IT expenses

 

IT expenses decreased by 5% to RUB 126 million in the three months ended June 30, 2022 from RUB 133 million in the three months ended June 30, 2021. This decrease was primarily driven by positive FX effect, as part of the Company’s hosting expenses are denominated in foreign currency.

 

Other operating expenses

 

Other operating expenses increased by 25% to RUB 222 million in the three months ended June 30, 2022 from RUB 177 million in the three months ended June 30, 2021. This was primarily driven by the cost of properties sold as part of our Home Swap service, which totaled RUB 66 million in the second quarter of 2022. Another factor contributing to the increase was growth in capital markets and consulting expenses.

 

Loss for the period

 

Loss for the three months ended June 30, 2022 was RUB 433 million compared to a loss of RUB 1,287 million for the three months ended June 30, 2021. The change in loss for the period was driven primarily by the same factors as affecting our Adjusted EBITDA described below as well as a foreign currency exchange loss of RUB 663 related to our USD-denominated cash balances.

 

Adjusted EBITDA and Adjusted EBITDA Margin

 

Adjusted EBITDA for the three months ended June 30, 2022 reached RUB 480 million compared to RUB 119 million for the three months ended June 30, 2021. The increase in Adjusted EBITDA was primarily driven by the revenue growth supported by the decrease in operating costs.

 

Adjusted EBITDA Margin increased by 17.0 ppt to 25.2% for the three months ended June 30, 2022.

 

Core Business Adjusted EBITDA increased by 106% to RUB 645 million in the three months ended June 30, 2022 from RUB 313 million in the three months ended June 30, 2021. This increase was driven primarily by revenue growth of the Core Business segment, including the growth in listing, lead generation and display advertising revenue that outpaced the growth of Core Business operating expenses.

 

 

Core Business Adjusted EBITDA Margin improved by 13.4 ppt reaching 36.2% for the three months ended June 30, 2022.

 

Mortgage Marketplace Adjusted EBITDA was negative RUB 45 million in the three months ended June 30, 2022 compared to negative RUB 106 million in the three months ended June 30, 2021. The dynamic was primarily driven by a sharp decrease in demand on mortgage (as a result of a hike of CBR key rate) and substantial decrease in marketing spendings due to uncertainty in the mortgage market.

 

Six Months 2022 Results

 

Audience

 

Average UMV (Unique Monthly Visitors) for the six months ended June 30, 2022 was down by 11% Y-o-Y to 18.2 million. The main reasons for that decrease were a high level of uncertainty in the second quarter of 2022 due to the key interest rate increase in February 2022 (please refer to the corresponding section above for a more detailed description).

 

Revenue

 

Revenue for the six months ended June 30, 2022 amounted to RUB 3,631 million compared to RUB 2,704 million for the six months ended June 30, 2021, demonstrating an increase of RUB 927 million, or 34%. The revenue growth was mainly driven by growth of the Core Business segment.

 

The following table sets forth a breakdown of our revenue by segment and type for the periods indicated (in millions of RUB and USD):

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022				Y-o-Y growth
		RUB				RUB				USD (1)
Total Revenue			2,704				3,631				71.0				34	%
Core Business, including			2,563				3,403				66.5				33	%
Listing revenue			1,697				2,141				41.9				26	%
Lead generation revenue			595				960				18.8				61	%
Display advertising revenue			267				290				5.7				9	%
Mortgage Marketplace			119				100				2.0				-16	%
Valuation and Analytics			21				29				0.6				38	%
C2C Rental			1				-				-				-
End-to-End Offerings			-				99				1.9				-

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

Core Business segment revenue

 

Core Business revenue reached RUB 3,403 million for the six months ended June 30, 2022, increasing by 33% compared to RUB 2,563 million for the six months ended June 30, 2021. Similar to the second quarter, Core Business revenue growth was driven by a positive performance across all key revenue streams.

 

 

 

Core Business revenue in Moscow and the Moscow region for the six months ended June 30, 2022 was RUB 2,516 million, an increase of RUB 620 million, or 33%, compared to RUB 1,896 million for the same period of the prior year. Core Business revenue in other Russian regions for the six months ended June 30, 2022 was RUB 887 million, an increase of RUB 220 million, or 33%, as compared to RUB 667 million for the same period of the prior year.

 

Listing revenue (secondary and commercial real estate verticals)

 

Listing revenue increased by 26% to RUB 2,141 million for the six months ended June 30, 2022 from RUB 1,697 million for the same period of the prior year.

 

The following table presents the listing revenue, the number of listings and the average daily revenue per listing for the periods indicated:

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				Y-o-Y growth
Listing revenue, including (RUB, million)			1,697				2,141				26	%
Moscow and Moscow Region			1,184				1,482				25	%
Other Russian Regions			513				659				29	%
Listings(1), including (million)			2.14				1.78				(17	)%
Moscow and Moscow Region			0.31				0.32				2	%
Other Russian Regions			1.83				1.46				(20	)%
Average daily revenue per listing(2) (RUB)			4.4				6.6				52	%
Moscow and Moscow Region			21.1				25.6				22	%
Other Russian Regions			1.5				2.5				67	%

 

¹ Listings means the daily average number of real estate listings posted on our platform by agents and individual sellers for a particular period

² Average daily revenue per listing is calculated as listing revenue divided (i) by the total number of listings for the corresponding period and (ii) by the number of days during the period

The growth of the Сore Business listing revenue was primarily driven by re-launch of paid listing services after the COVID-19 pandemic and listings services price increases.

In the six months ended June 30, 2022, we had approximately 1.78 million listings on our platform, compared to approximately 2.14 million in the six months ended June 30, 2021. The decrease in the number of listings was predominantly driven by monetization re-introduction and price increases. The market has yet to fully recover following the mortgage rate increase in late February-March.

 

Lead generation and display advertising revenue (primary real estate vertical)

 

Lead generation revenue increased by 61% to RUB 960 million in the six months ended June 30, 2022 from RUB 595 million in the six months ended June 30, 2021. Display advertising revenue increased by 9% to RUB 290 million for the six months ended June 30, 2022.

 

Core Business lead generation revenue growth was mainly driven by the increase in the average revenue per lead to developers. Increase in the average revenue per lead to developers resulted from price increases in September 2021, December 2021, and March 2022. Since March 2022, there was increased demand from buyers attempting to invest their savings in property and utilize previously approved mortgages on the back of the key rate increase.

 

 

Mortgage marketplace segment revenue

 

Mortgage Marketplace revenue amounted to RUB 100 million for the six months ended June 30, 2022 compared to RUB 119 million for the same period of the prior year, representing a decrease of RUB 19 million, or 16%, as the demand did not fully recover after the key interest rate increase in late February.

 

Operating expenses

 

Total operating expenses decreased by 17% to RUB 3,587 million in the six months ended June 30, 2022 from RUB 4,345 million in the six months ended June 30, 2021, primarily driven by a decrease in marketing and employee-related expenses.

 

The following table sets forth a breakdown of our operating expenses for the periods indicated (in millions of RUB and USD):

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022				Y-o-Y growth
		RUB				RUB				USD (1)
Operating expenses			4,345				3,587				70.1				-17	%
Marketing expenses			1,129				1,040				20.3				-8	%
Employee-related expenses, including			2,632				1,790				35.0				-32	%
Wages, salaries and related taxes			1,124				1,397				27.3				24	%
Share-based payment expense			1,470				353				6.9				-76	%
IT expenses			229				262				5.1				14	%
Depreciation and amortization			134				139				2.7				4	%
Other operating expenses			221				356				7.0				61	%
IPO related expenses			88				-				-				-

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

Employee-related expenses

 

Employee-related expenses decreased by 32% to RUB 1,790 million in the six months ended June 30, 2022 from RUB 2,632 million in the six months ended June 30, 2021. Wages, salaries and related taxes and other employee-related expenses were a total of RUB 1,397 million for the six months ended June 30, 2022 compared to RUB 1,124 million for the six months ended June 30, 2021. This increase was primarily due to headcount growth and salary growth in line with the market level.

 

Wages, salaries and related taxes as a percentage of revenue decreased year-over-year from 41.6% for the first half of 2021 to 38.5% for the first half of 2022.

 

 

Marketing expenses

 

Marketing expenses decreased to RUB 1,040 million in the six months ended June 30, 2022 from RUB 1,129 million in the six months ended June 30, 2021. This decrease was primarily driven by reduced spending on online advertising, especially in the second quarter of 2022 in response to increased levels of uncertainty. As the key interest rate decrease and audience activity started recovering, the Company increased its marketing activities.

 

Marketing expenses as a percentage of revenue decreased to 28.6% in the first half of 2022 from 41.8% in the first half of 2021, driven primarily by the increase in revenue and decrease of marketing spendings.

 

IT expenses

 

IT expenses increased by 14% to RUB 262 million in the six months ended June 30, 2022 from RUB 229 million in the six months ended June 30, 2021. This increase was primarily driven by an additional rollout of hosting on Yandex (as a backup), expansion of our call tracking as well as currency rate growth in the first quarter of 2022.

 

Other operating expenses

 

Other operating expenses increased by 61% to RUB 356 million in the six months ended June 30, 2022 from RUB 221 million in the six months ended June 30, 2021, primarily driven by the costs of properties sold as part of our Home swap service, which totaled RUB 81 million in the first half of 2022; another factor was growth in capital markets and consulting expenses.

 

Loss for the period

 

Loss for the six months ended June 30, 2022 was RUB 389 million compared to a loss of RUB 1,670 million for the six months ended June 30, 2021. The change in loss for the period was driven primarily by the same factors as affecting our Adjusted EBITDA described below as well as a foreign currency exchange loss of RUB 478 related to our USD denominated cash balances.

 

Adjusted EBITDA and Adjusted EBITDA Margin

 

Adjusted EBITDA for the six months ended June 30, 2022 reached RUB 536 million, compared to RUB 51 million for the six months ended June 30, 2021. The increase in Adjusted EBITDA was primarily driven by the revenue growth partially supported by decrease in operating costs.

 

Adjusted EBITDA Margin increased by 13 ppt to 14.8% for the six months ended June 30, 2022.

 

Core Business Adjusted EBITDA increased by 103% to RUB 906 million in the six months ended June 30, 2022 from RUB 446 million in the six months ended June 30, 2021. This increase was driven primarily by revenue growth of the Core Business segment, including the growth in listing, lead generation and display advertising revenue that outpaced the growth of Core Business operating expenses.

 

Core Business Adjusted EBITDA Margin improved by 9.2 ppt reaching 26.6% for the six months ended June 30, 2022.

 

Mortgage Marketplace Adjusted EBITDA was negative RUB 104 million in the six months ended June 30, 2022 compared to negative RUB 229 million in the six months ended June 30, 2021. The dynamic was primarily driven by a decrease of more than 40% in operating expenses, outpacing the decrease in revenue (-16% Y-o-Y) in this segment.

 

 

Second Quarter and Six Months 2022 Financial Results Conference Call

 

In light of the existing uncertainty and market volatility, the Company will not be conducting its second quarter and first six months 2022 conference call. Investors, analysts, and media are welcome to send their inquiries to the Company using the contact details provided in this release.

 

About Cian

 

Cian is a leading online real estate classifieds platform in the large, underpenetrated and growing Russian real estate classifieds market, with a strong presence across Russia and leading positions in the country’s key metropolitan areas. The Company ranks among the top seven most popular online real estate classifieds globally in terms of traffic (based on SimilarWeb traffic data for other online real estate classifieds and Google Analytics data for Cian for June 2022). Cian’s networked real estate platform connects millions of real estate buyers and renters to millions of high-quality real estate listings of all types — residential and commercial, primary and secondary, urban and suburban. In the second quarter of 2022, the Company had 1.9 million listings available through its platform and the monthly audience with an average UMV of over 17 million and enjoyed 31% Y-o-Y growth in revenues. Through its technology-driven platform and deep insights into the Russian real estate market the Company provides an end-to-end experience for its customers and users and helps them address multiple pain points on their journey to a new home or place to work.

 

Source: Cian PLC

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding our financial outlook for 2021 and long-term growth strategy, as well as statements that include the words “target,” “believe,” “expect,” “aim,” “intend, intend,” may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: the negative impact on the Russian economy of the ongoing military actions between Russia and Ukraine, any negative effects of sanctions, export controls and similar measures targeting Russia as well as other responses to the military conflict in Ukraine; our ability to maintain our leading market positions, particularly in Moscow, St. Petersburg and certain other regions, and our ability to achieve and maintain leading market position in certain other regions; our ability to compete effectively with existing and new industry players in the Russian real estate classifieds market; our heavy dependence on our brands and reputation; any potential failure to adapt to any substantial shift in real estate transactions from, or demand for services in, certain Russian geographic markets; any downturns in the Russian real estate market and general economic conditions in Russia; any effect on our operations due to cancellation of, or any changes to, the Russian mortgage subsidy program or other government support programs; further widespread impacts of the COVID-19 pandemic, or other public health crises, natural disasters or other catastrophic events which may limit our ability to conduct business as normal; our ability to establish and maintain important relationships with our customers and certain other parties; any failure to establish and maintain proper and effective internal control over financial reporting; any failure to remediate existing deficiencies we have identified in our internal controls over financial reporting, including our information technology general controls; any new or existing government regulation in the area of data privacy, data protection or other areas and the other important factors discussed under the caption “Risk Factors” in Cian’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (“SEC”) on May 2, 2022 and our other filings with the SEC as such factors may be updated from time to time.

 

 

Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. We disclaim any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.

 

Investor contacts:

 

Daria Fadeeva 

[email protected]

 

Media contacts:

 

Olga Podoliaka 

[email protected]

 

 

 

Consolidated Statement of Profit or Loss and Other Comprehensive Income (in millions of RUB and USD, except share and per share amounts)

 

		Three months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
Revenue			1,456				1,905				37.2
Operating expenses:
Marketing expenses			(524	)			(349	)			(6.8	)
Employee-related expenses			(1,833	)			(906	)			(17.7	)
IT expenses			(133	)			(126	)			(2.5	)
Depreciation and amortization			(70	)			(71	)			(1.4	)
Other operating expenses			(177	)			(222	)			(4.3	)
Total operating expenses			(2,737	)			(1,674	)			(33	)
Operating (loss) / profit			(1,281	)			231				4.5
Finance costs			(15	)			(6	)			(0.1	)
Finance income			4				19				0.4
Foreign currency exchange loss, net			-				(663	)			(13.0	)
Other income			-				12				0.2
Loss before income tax			(1,292	)			(407	)			(8.0	)
Income tax (expense) / benefit			5				(26	)			(0.5	)
Loss for the period			(1,287	)			(433	)			(8.5	)
Total comprehensive loss for the period			(1,287	)			(433	)			(8.5	)
Loss per share, in RUB
Basic and diluted loss per share attributable to ordinary equity holders of the parent			(19.80	)			(6.20	)			(0.12	)

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

 

Consolidated Statement of Profit or Loss and Other Comprehensive Income (in millions of RUB and USD, except share and per share amounts)

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
Revenue			2,704				3,631				71.0
Operating expenses:
Marketing expenses			(1,129	)			(1,040	)			(20.3	)
Employee-related expenses			(2,632	)			(1,790	)			(35.0	)
IT expenses			(229	)			(262	)			(5.1	)
Depreciation and amortization			(134	)			(139	)			(2.7	)
Other operating expenses			(221	)			(356	)			(7.0	)
Total operating expenses			(4,345	)			(3,587	)			(70	)
Operating (loss) / profit			(1,641	)			44				0.9
Finance costs			(31	)			(10	)			(0.2	)
Finance income			7				31				0.6
Foreign currency exchange loss, net			(27	)			(478	)			(9.3	)
Other income			-				21				0.4
Loss before income tax			(1,692	)			(392	)			(7.7	)
Income tax benefit			22				3				0.1
Loss for the period			(1,670	)			(389	)			(7.6	)
Total comprehensive loss for the period			(1,670	)			(389	)			(7.6	)
Loss per share, in RUB
Basic and diluted loss per share attributable to ordinary equity holders of the parent			(26.20	)			(5.57	)			(0.11	)

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

 

Consolidated Statement of Financial Position (in millions of RUB and USD)

 

		As of
		December 31, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
		(audited)				(unaudited)				(unaudited)
Assets
Non-current assets
Property and equipment			49				60				1.2
Right-of-use assets			98				75				1.5
Goodwill			785				785				15.3
Intangible assets			1,197				1,133				22.1
Deferred tax assets			226				238				4.7
Other non-current assets			15				12				0.2
Total non-current assets			2,370				2,303				45.0
Current assets
Inventories			108				45				0.9
Advances paid and prepaid expenses			93				91				1.8
Trade and other receivables			408				287				5.6
Prepaid income tax			4				5				0.1
Cash and cash equivalents			2,419				2,586				50.5
Other current assets			198				108				2.1
Total current assets			3,230				3,122				61.0
Total assets			5,600				5,425				106.0
Equity and liabilities
Equity
Share capital			2				2				0.0
Share premium			7,614				7,702				150.6
Equity-settled employee benefits reserves			110				344				6.7
Accumulated losses			(3,854	)			(4,212	)			(82.3	)
Total equity			3,872				3,836				75.0
Liabilities
Non-current liabilities
Lease liabilities			48				28				0.5
Deferred tax liabilities			135				131				2.6
Deferred income			125				122				2.4
Total non-current liabilities			308				281				5.5
Current liabilities
Contract liabilities			425				460				9.0
Trade and other payables			619				435				8.5
Income tax payable			59				1				0.0
Other taxes payable			241				337				6.6
Lease liabilities			43				42				0.8
Deferred income			33				33				0.6
Total current liabilities			1,420				1,308				25.6
Total liabilities			1,728				1,589				31.1
Total liabilities and equity			5,600				5,425				106.0

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

 

Consolidated Statement of Cash Flows (in millions of RUB and USD)

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
		(audited)				(audited)				(unaudited)
Cash flows from operating activities
Loss before income tax			(1,692	)			(392	)			(7.7	)
Adjusted for:
Depreciation and amortization			134				139				2.7
Employee share-based payment expense			1,470				353				6.9
Finance income			(7	)			(31	)			(0.6	)
Finance costs			31				10				0.2
Foreign currency exchange loss, net			27				478				9.3
(Reversal) / Allowance for expected credit losses			1				(11	)			(0.2	)
Working capital changes:
Decrease / (increase) in trade and other receivables			(57	)			125				2.4
Decrease in advances paid and prepaid expenses			16				6				0.1
Decrease / (increase) in other assets			(62	)			153				3.0
(Decrease) / increase in trade and other payables			117				(209	)			(4.1	)
(Decrease) / increase in contract liabilities and deferred income			(9	)			17				0.3
Increase in other liabilities			101				95				1.9
Cash generated from operating activities			70				733				9.9
Income tax paid			(18	)			(72	)			(1.4	)
Interest received			5				31				0.6
Interest paid			(30	)			(3	)			(0.1	)
Net cash generated from operating activities			27				689				9.3
Cash flows from investing activities
Acquisition of a subsidiary, net of cash acquired			(1,651	)			-				-
Purchase of property and equipment			(24	)			(27	)			(0.5	)
Purchase of intangible assets			(50	)			(34	)			(0.7	)
Net cash used in investing activities			(1,725	)			(61	)			(1.2	)
Cash flows from financing activities
Proceeds from the issue of ordinary shares			2,265				-				-
Repayment of borrowings			(186	)			-				-
Payment of principal portion of lease liabilities			(19	)			(21	)			(0.4	)
Net cash (used in) / generated from financing activities			2,060				(21	)			(0.4	)
Net increase in cash and cash equivalents			362				607				11.9
Cash and cash equivalents at the beginning of the period			449				2,419				47.3
Effect of exchange rate changes on cash and cash equivalents			(1	)			(450	)			(8.8	)
Reversal of allowance for expected credit losses			—				10				0.2
Cash and cash equivalents at the end of the period			810				2,586				50.5

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

 

 

 

Non-IFRS Financial Measures and Supplemental Financial Information

 

Use of Non-IFRS Financial Measures

 

We use Adjusted EBITDA, Core Business Adjusted EBITDA for Moscow and the Moscow region, Core Business Adjusted EBITDA for Other regions, Adjusted EBITDA Margin and Core Business Adjusted EBITDA Margin as non-IFRS financial measure in assessing our operating performance and in our financial communications.

 

Adjusted EBITDA, Core Business Adjusted EBITDA for Moscow and the Moscow region, Core Business Adjusted EBITDA for Other regions, Adjusted EBITDA Margin and Core Business Adjusted EBITDA Margin are financial measures that are not calculated in accordance with IFRS. These non-IFRS financial measures should not be considered in isolation or as an alternative or a substitute to loss for the period, which is the most directly comparable IFRS measure, or any other measure of financial performance calculated and presented in accordance with IFRS. Adjusted EBITDA, Core Business Adjusted EBITDA for Moscow and the Moscow region, Core Business Adjusted EBITDA for Other regions, Adjusted EBITDA Margin and Core Business Adjusted EBITDA Margin have limitations as analytical tools. Some of these limitations are:

 

·

they exclude depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future, increasing our cash requirements;

 

·

they do not reflect interest expense, or the cash required to service our debt, which reduces cash available to us;

 

·

they do not reflect income tax payments that reduce cash available to us;

 

·

they do not reflect share-based compensation expenses and, therefore, do not include all of our employee-related expenses; and

 

·

other companies, including companies in our industry, may calculate those measures differently, which reduces their usefulness as comparative measures.

 

The tables below provide detailed reconciliations of each non-IFRS financial measure we use from the most directly comparable IFRS financial measure.

 

 

Reconciliation of Adjusted EBITDA from Loss for the period, the most directly comparable IFRS financial measure (in millions of RUB and USD)

 

		Three months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
Loss for the period			(1,287	)			(433	)			(8.5	)
Income tax expense			(5	)			26				0.5
Loss before income tax			(1,292	)			(407	)			(8.0	)
Depreciation and amortization			70				71				1.4
Finance expenses, net(2)			11				(13	)			(0.3	)
Foreign currency exchange loss, net			-				663				13.0
Share-based payment expenses			1,242				178				3.5
IPO-related costs			88				-				-
Income from the depositary			-				(12	)			(0.2	)
Adjusted EBITDA(3)			119				480				9.4
Adjusted EBITDA Margin(4)			8.2	%			25.2	%			25.2	%

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
Loss for the period			(1,670	)			(389	)			(7.6	)
Income tax expense			(22	)			(3	)			(0.1	)
Loss before income tax			(1,692	)			(392	)			(7.7	)
Depreciation and amortization			134				139				2.7
Finance expenses, net(2)			24				(21	)			(0.4	)
Foreign currency exchange loss, net			27				478				9.3
Share-based payment expenses			1,470				353				6.9
IPO-related costs			88				-				-
Income from the depositary			-				(21	)			(0.4	)
Adjusted EBITDA(3)			51				536				10.5
Adjusted EBITDA Margin(4)			1.9	%			14.8	%			14.8	%

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

² Comprises finance costs and finance income for the respective periods

³ Defined as profit / (loss) for the period adjusted to exclude income tax (benefit) / expense, finance costs, finance income, foreign currency exchange loss / (gain), net, depreciation and amortization, share-based payments under equity-based incentive program consisting of phantom share options and restricted share units, IPO-related costs and income from the depository

⁴ Defined as Adjusted EBITDA divided by revenue for the respective periods

 

 

Segment Data and Reconciliation to Adjusted EBITDA (in millions of RUB and USD)

 

		Three months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
Adjusted EBITDA(2)			119				480				9.4
Core Business Adjusted EBITDA			313				645				12.6
Core Business Adjusted EBITDA for Moscow and the Moscow region(3)			613				873				17.1
Core Business Adjusted EBITDA for Other regions(4)			(300	)			(228	)			(4.5	)
Mortgage Marketplace Adjusted EBITDA			(106	)			(45	)			(0.9	)
Valuation and Analytics Adjusted EBITDA			(17	)			(11	)			(0.2	)
C2C Rental Adjusted EBITDA			(33	)			-				-
End-to-End Offerings Adjusted EBITDA			(38	)			(109	)			(2.1	)
Core Business EBITDA margin			22.8	%			36.2	%			36.2	%

 

		Six months ended (unaudited)
		June 30, 2021				June 30, 2022				June 30, 2022
		RUB				RUB				USD(1)
Adjusted EBITDA(2)			51				536				10.5
Core Business Adjusted EBITDA			446				906				17.7
Core Business Adjusted EBITDA for Moscow and the Moscow region(3)			1,087				1,567				30.6
Core Business Adjusted EBITDA for Other regions(4)			(641	)			(661	)			(12.9	)
Mortgage Marketplace Adjusted EBITDA			(229	)			(104	)			(2.0	)
Valuation and Analytics Adjusted EBITDA			(34	)			(19	)			(0.4	)
C2C Rental Adjusted EBITDA			(68	)			(5	)			(0.1	)
End-to-End Offerings Adjusted EBITDA			(64	)			(242	)			(4.7	)
Core Business EBITDA margin			17.4	%			26.6	%			26.6	%

 

¹ Dollar translations throughout this release are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the Central Bank of Russia as of June 30, 2022 (RUB 51.1580 to USD 1.00)

² Starting from the first quarter of 2022 the Group changed its management reporting to be more convergent with IFRS. The following differences were eliminated: (1) Reclassification of lease related amortization and interest – for the purposes of CODM’s assessment of operating performance, rental expenses were previously considered operating expenses included in Adjusted EBITDA rather than depreciation and interest expense; thus, IFRS 16 ‘Leases’ was not applied for the purpose of management reporting; (2) Reclassification of operating expense related to software licenses to amortization – for the purposes of CODM’s assessment of operating performance, expenses related to software licenses were considered operating expenses included in Adjusted EBITDA rather than amortization of intangible assets. The corresponding information for the three and six months ended June 30, 2021 has been restated accordingly.

³ For the purpose of calculating Core Business Adjusted EBITDA for Moscow and the Moscow region and Core Business Adjusted EBITDA for Other regions: (i) revenues are attributed to the relevant region based primarily on the location of the relevant property listed; and (ii) costs are directly attributed to the relevant region with respect to which they were incurred, when possible. Due to the integrated structure of our business, certain costs may benefit all our regions. These costs primarily include certain headcount-related expenses, certain marketing and advertising costs, product development, IT expenses (including hosting and technical support expenses and telecommunication services), office maintenance expenses and other general corporate expenses, such as finance, accounting, legal, human resources, recruiting and facilities costs. These costs are allocated to Moscow and the Moscow region and Other regions based on the estimated benefit each region receives from such expenses, using specific allocation drivers representing this benefit

⁴ Defined as Core Business Adjusted EBITDA divided by Core Business revenue for the respective periods.

 

Other Historical Operational Data

 

		Average UMV (1) (in millions)				Listings (2) (in millions)				Listings Moscow and the Moscow region				Listings Other regions				Leads to developers (3) (in thousands)
March 31, 2019			12.7				1.98				0.38				1.60				48.0
June 30, 2019			12.6				1.98				0.39				1.59				41.5
September 30, 2019			14.0				1.92				0.37				1.55				45.8
December 31, 2019			14.1				1.78				0.35				1.43				44.3
March 31, 2020			15.5				1.74				0.32				1.42				54.0
June 30, 2020			14.9				2.30				0.46				1.83				49.9
September 30, 2020			18.0				2.38				0.37				2.01				75.1
December 31, 2020			17.6				2.14				0.32				1.82				65.8
March 31, 2021			21.2	(4)			2.04				0.30				1.74				60.2
June 30, 2021			19.9	(4)			2.25				0.32				1.93				53.2
September 30, 2021			20.5	(4)			1.90				0.31				1.59				57.3
December 31, 2021			20.3	(4)			1.78				0.29				1.49				58.6
March 31, 2022			19.2				1.70				0.28				1.42				62.2
June 30, 2022			17.3				1.86				0.35				1.51				43.7

 

¹ Average Unique Monthly Visitors (UMV) means the average number of users and customers visiting our platform (websites and mobile application) per month in a particular period, excluding bots. Average UMV for a particular period is calculated by aggregating the UMV for each month within such period and dividing by the number of months. For 2020, 2019 and their respective interim periods, Average UMV is calculated based on Google Analytical data; for 2021 and 2022, Average UMV is calculated as a sum of Average UMV for the Cian Group (excluding the N1 Group) based on Google Analytics data and Average UMV for the N1 Group based on Yandex.Metrica data

² Listings means the daily average number of real estate listings posted on our platform by agents and individual sellers for a particular period

³ Leads to developers means the number of paid target calls, lasting 30 seconds or longer, made through our platform by home searchers to real estate developers, for a particular period

⁴ In the first quarter of 2022 we made a decision to change the methodology of average UMV calculation. As of March 31, 2022, it includes UMV of N1 that was not included previously. Quarterly historical numbers for 2021 have been recalculated retrospectively for comparability with the new methodology and differ from the data for the same periods published earlier in the Company’s Form 6-Ks filed with the SEC on April 5, 2022 and November 24, 2021.

 

 

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Statement on behalf of the Maher Family
• Bragar Eagel & Squire, P.C. Is Investigating CI&T, Harbor, AXTI, and Morgan Stanley and Encourages Investors to Contact the Firm
• T2EARTH Celebrates Earth Day by Leading the Wood Products Industry towards a Sustainable Built Environment