Yandex NV (Nasdaq: YNDX) is looking at 12 to 18 months of operations in “the ordinary course” given its current capacity. The Russian internet firm released a statement pertaining to its outlook following the economic sanctions imposed on Russia.
The firm clarified that none of its subsidiaries, board members, management team, or principal shareholders are targets of the current sanctions. Following Russia’s invasion of Ukraine, the United States, the United Kingdom, and the European Union have all effected restrictive measures on the country’s economy–including freezing out its central bank from divesting its assets outside.
“We understand, however, that a number of companies based in the U.S., U.K., E.U., and elsewhere have indicated that they are currently suspending supplies and services to customers in Russia,” the company statement read. “We believe that our current data center capacity and other technology critical to operations will allow us to continue to operate in the ordinary course for at least the next 12 to 18 months.”
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Should the situation continue or escalate, the firm acknowledged that its operations would be “materially adversely affected.”
The search engine, 5th largest in the world, also said that they hold US$615.0 million in cash balance as of February 28, 2022. Around US$370 million of which is located outside of Russia.
This poses a problem for the firm since the Nasdaq Stock Exchange suspended on Thursday the trading of several Russian companies including Yandex. The firm currently has US$1.25 billion in outstanding 0.75% convertible notes due 2025, the holders of which have the right to require redemption should the suspension last for more than five days.
“The Yandex group as a whole does not currently have sufficient resources to redeem the Notes in full,” said the company.
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While its parent company is headquartered in the Netherlands, the majority of its operations and assets are located in Russia. The firm also projected that it would also have a “material adverse impact” on the company should the speculation on the Russian government taking control of companies in the country materialize.
“Any prolonged economic downturn in Russia as a result of sanctions, depreciation of the ruble, or negative consumer sentiment could have a material adverse effect on our results,” the company further added.
However, the company stressed that there are no current regulatory restrictions for persons outside Russia to acquire and trade its securities.
While the situation in Eastern Europe ensues, the firm promised it is prepared to “take any necessary measures to conserve cash, consider our capital allocation and budget appropriately.”
In its 2021 financials, the internet firm recorded ₽356.2 billion in annual revenue and a ₽14.7 billion net loss.
Yandex last traded at US$18.94 on the Nasdaq since the trading was suspended.
Information for this briefing was found via Yandex. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
