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VNV Global — Interim / Quarterly Report 2016
May 16, 2016
3125_10-q_2016-05-16_c4535d0f-5ce5-41f2-9f73-9391e58e2dc4.pdf
Interim / Quarterly Report
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Vostok New Ventures Ltd.
Three Months Report
Covering the Period January 1, 2016–March 31, 2016
- Net result for the period was USD 4.14 million (mln) (January 1, 2015–March 31, 2015: 12.83). Earnings per share were USD 0.06 (0.17).
- The net asset value of the Company was USD 507.59 mln on March 31, 2016 (December 31, 2015: 503.44), corresponding to USD 6.91 per share (December 31, 2015: 6.85). Given a SEK/USD exchange rate of 8.2389 the values were SEK 4,135.43 mln (December 31, 2015: 4,204.90) and SEK 56.26 (December 31, 2015: 57.21), respectively.
- The group's net asset value per share in USD increased by 0.83% over the period January 1, 2016–March 31, 2016. During the same period the RTS index increased by 15.74% in USD terms.
- The Company has invested USD 20 mln into Propertyfinder, the leading property vertical in the MENA region. Vostok New Ventures is the sole investor in this primary funding round and owns 10% of the shares in Propertyfinder. USD 5 mln was paid in December 2015 and the remaining payment of USD 15 mln was disbursed during the first quarter 2016.
- The number of outstanding shares at the end of the period was 73,499,555.
- After the end of the period, Vostok New Ventures has invested USD 1.2 mln (SEK 10 mln) in Swedishfounded Carable (Garantibil), which aims to become a fully automated peer-to-peer marketplace for used cars.
- After the end of the period, the Board of Directors has resolved to mandate the Company to repurchase up to 10% of the outstanding shares of the Company.
Management report
Dear shareholders,
Avito is continuing to dominate the market in Russia producing Q1 results with some 86% growth year-onyear and EBITDA margins of 47% (including marketing costs). The introduction of listing fees has clearly added an important contributor to revenues without cannibalizing the existing sources.
The company is continuing its path of dominating the verticals of general, cars, real estate, jobs and services resulting in the positive spin of liquidity and network effects that is the signum of this sector. For businesses in Russia this makes Avito a very effective place to spend ad-rubles on which in turn is reflected in the increasing monetization per user.
Competition continues to be defined by very regional niche players. As local users of Avito have already noticed, the features of the Wallapops and Letgos of this world have already been introduced at Avito, hence making the introduction of any such competition more difficult even though they have made decent inroads into the general segment in other markets.
The Avito results will further strengthen the visibility of the strength of the Russian internet sector. Yandex did post really good Q1 results earlier in April shining a light on how ad spending even in a tough economic environment is increasing in the online segment.
BlaBlaCar
BlaBlaCar continues to perform well. I would really recommend you to look at the interview of the BlaBlaCar founders that we hosted and that was performed by the Avito founders. You will find it at www.vostoknew ventures.com/en/investments/blablacar.
Propertyfinder
These are early days for our investment in Propertyfinder. The macro environment in the Middle East continues to be pressured by the oil price but this was also reflected in our entry valuation. Experience from across the world is that no one catches up with a market leader like Propertyfinder and there is a nowhere else in the world where you can buy the market leader in a world class city with developed market GDP per capita for USD 200 mln post money.
Gett
Gett acquired Radio Taxis in the UK, making them the largest black cab taxi app with access to over half of all the black cabs available. Uber is still larger in the UK capital but the dominant marketplace position of the iconic London black cabs is of course very valuable.
New Investment – Carable
We have made a new investment of USD 1.2 mln in the Swedish company Carable, giving us a sizable percentage of this company.
Carable's mission is to create the first global fully automated peer-to-peer marketplace for used cars. It is democratizing the transaction of a used car by removing the conflict between the buyer and the seller through an auction process to price it, a streamlined process of physical inspection through partnerships, and post auction aid including warranty and insurance.
They are proving up the model in Sweden but the ambition is to go global.
This company was founded by Patrick Juthberg, a serial entrepreneur with a really good team around him who makes this a start up that is up there with the best in terms of execution power and explaining their vision.
Share buyback
We announce today that our board has given the management a formal mandate to re-initiate buybacks. As always we evaluate an investment into our own stock next to any new investments we make. We take into account the liquidity in our own portfolio, the liquidity of our own stock and the discount to NAV which we trade at. Whilst always being opportunistic about the timing, if the above conditions are favorable it is hard for us to keep away from the collection of assets in which we have 100% faith in.
May 2016, Per Brilioth
Portfolio development
The group's net asset value per share in USD increased by 0.83% over the period January 1, 2016–March 31, 2016. During the same period the RTS index increased by 15.74% in USD terms.
Percent development January 1–March 31, 2016 (last price paid on relevant stock exchange)
| –10% –5% |
0% | 5% | 10% | 15% 20% |
|---|---|---|---|---|
| MICEX Second Tier Index (USD)1 |
||||
| RTS Index2 | ||||
| MSCI EM Index3 | ||||
| Vostok New Ventures NAV(USD) |
||||
| SDR(USD) | Vostok New Ventures |
-
- The MICEX Second Tier Index is a real-time cap-weighted index of 50 stocks of Russian small cap companies.
-
- The RTS Index (Russian Trading System Index) is a capitalization-weighted index. The index is comprised of stocks traded on the Russian Trading System and uses free-float adjusted shares.
-
- The MSCI Emerging Markets Index is a free float weighted equity index that consists of indices in 26 emerging economies.
Portfolio structure – Net Asset Value
The investment portfolio stated at market value as at March 31, 2016 is shown below.
| Company | Fair value, USD |
Percentage weight |
Fair value, USD |
Valuation change per share, USD |
|---|---|---|---|---|
| March 31, 2016 | Dec 31, 2015 | Year to date, 2016 | ||
| Avito2 | 338,481,743 | 64.0% | 338,481,743 | – 1 |
| Gett2 | 34,516,317 | 6.5% | 34,516,317 | – 1 |
| BlaBlaCar2 | 34,380,153 | 6.5% | 33,181,762 | 4%3 1 |
| Propertyfinder2 | 19,999,199 | 3.8% | 19,999,199 | – 1 |
| Wallapop2 | 10,302,197 | 1.9% | 10,302,197 | – 1 |
| Merro2 | 7,513,333 | 1.4% | 7,513,333 | – 1 |
| Yell.ru2 | 4,330,053 | 0.8% | 5,662,418 | -24% 1 |
| Naseeb Networks (Rozee and Mihnati)2 | 4,500,000 | 0.9% | 4,500,000 | – 1 |
| OneTwoTrip2 | 4,000,000 | 0.8% | 4,000,000 | – 1 |
| IZH Holding (Zameen and Bayut)2 | 4,742,928 | 0.9% | 2,000,000 | 137% 1 |
| El Basharsoft (Wuzzuf and Forasna)2 | 1,002,000 | 0.2% | 968,000 | – 1 |
| Delivery Hero Holding GmbH, equity component2 | 2,592,270 | 0.5% | 2,412,857 | 4%3 1 |
| Delivery Hero Holding GmbH, debt | 24,682,170 | 4.7% | 23,449,753 | |
| Kite Ventures, debt | 9,693,811 | 1.8% | 9,071,642 | |
| Cash | 28,185,491 | 5.3% | 43,660,119 | |
| Total investment portfolio | 528,921,665 | 100.0% | 539,719,340 | |
| Borrowings | -20,227,907 | -20,224,498 | ||
| Other net liabilities | -1,103,075 | -16,059,377 | ||
| Total NAV | 507,590,683 | 503,435,465 |
-
This investment is shown in the balance sheet as financial asset at fair value through profit or loss.
-
Private equity investment.
-
Valuation change due to USD/EUR exchange rate movement.
Avito
| Vostok New Ventures' number of shares as at | |
|---|---|
| March 31, 2016 | 6,166,470 |
| Total Value (USD) | 338,481,743 |
| Share of total portfolio | 64.0% |
| Share of total shares outstanding | 13.3% |
| Value development Jan 1–Mar 31, 2016 (in USD) | – |
Website: avito.ru
Avito is the largest and most liquid online classifieds platform in Russia, and the company has continued to show strong growth during the first months of 2016. The company has established itself as the leading player in terms of visitors and number of ads and continues to outpace its competitors. Avito has established a firm market-leading position, which is a key factor in terms of high profitability potential judging by the experience of peers in other countries. Avito is the leading brand and has the highest brand awareness in Moscow, St. Petersburg and throughout the regions. Compared to western countries, Russia still lags behind in terms of low proportion of internet users in relation to the total population. By the end of 2016 the number of internet users in Russia is expected to reach around 100 mln according to most forecasts. The market for internet-related services is expected to grow significantly in correlation with an increased internet penetration. The Russian e-commerce market is also expected to grow with the increasing internet penetration and consumers and businesses migrating online. According to LiveInternet.ru, Avito had 72 mln unique visitors during the last 31 days prior to this report measured by unique cookies.
Avito also runs Domofond.ru in a joint venture with Korbitec. Domofond.ru is a designated property vertical, that services real estate agencies and developers in the growing Russian real estate market. Domofond aims to be the leading property vertical in Russia and will help Avito create a stronger brand and improve monetization in the real estate segment. Domofond is still in a development phase and does not generate any significant revenues. During 2015, Avito invested material amounts in Domofond for marketing purposes and the vertical has launched TV campaigns in Moscow, St. Petersburg and the 15 most populated cities in Russia.
Since launch, Domofond has had strong, although from a low base, monthly growth in visitors and the company has been running advertisement on Russian TV-channels. The Russian real estate market is underdeveloped and holds great promise for the future. Some of the most profitable and highest valued international classifieds sites are real estate portals, including the likes of Rightmove, Zillow, REA Group and SeLoger.
On October 23, 2015 Vostok New Ventures announced a material secondary transaction in Avito. Naspers Limited, one of Avito's shareholders, acquired secondary
shares from other existing shareholders and increased its stake from 17.4% to 67.9% of the outstanding shares in Avito at an equity valuation of USD 2.7 bln, which includes cash in the company of approximately USD 240 mln. The transaction was finalized in November 2015.
Vostok New Ventures did not participate in the transaction and thus remains a minority shareholder in Avito with a 13.3% stake in the company on a fully diluted basis.
Other remaining minority shareholders following the transaction are Baring Vostok and the two founders.
In late December 2015, Vostok New Ventures received a USD 30.6 mln dividend from Avito.
As per March 31, 2016 Vostok New Ventures values Avito on the basis of the price in this transaction adjusted for the dividend distribution and considers this to be the best fair value estimate of Avito.
Key performance indicators first quarter 2016¹
- Revenues of RUB 2,249 mln (USD 33.3 mln2 ), up 86% compared with the first quarter 2015 (RUB 1,207 mln).
- Adjusted EBITDA margin of 47% or RUB 1,067 mln (USD 15.8 mln2 ), compared with the first quarter 2015 (Adjusted EBITDA margin of 46.4% or RUB 560 mln).
-
Page views amounted to 33 bln (mobile views: 54%) compared with 26 bln (mobile views: 41%) for the same period previous year.
-
Translated with FX rate of 67.6076 as of March 31, 2016.
1. Unaudited figures from Avito.
Gett
| Vostok New Ventures' number of shares as at | |
|---|---|
| March 31, 2016 | 18,927,570 |
| Total Value (USD) | 34,516,317 |
| Share of total portfolio | 6.5% |
| Share of total shares outstanding | 6.0% |
Website: gett.com
Gett is a simple and instant way to order taxis in a convenient way from a smartphone.
The Gett system automatically finds the taxi closest to the user's location, thus reducing the waiting time to less than 10 minutes. Gett users have access to driver and vehicle information and real-time views of taxis they order. Users can rank drivers, view their previous ride details, and even earn miles points toward free rides and other bonuses. Gett is currently active in four countries and across 57 cities, most notably Moscow, St. Petersburg, Tel Aviv, London and New York. Nearly half of the Fortune 500 companies use Gett today and in total Gett has over 2,500 corporate clients. The addressable market for the company within its existing markets is worth some USD 30 bln. Of this Gett's revenues are typically some 15–30% depending on whether it is servicing a private or business client.
Gett provides its services to enterprises and individuals through mobile and web applications and aims to become a global leader in the space. It is currently larger than all its direct competitors in Israel and Russia. Other shareholders include Access Industries, Inventure Partners and MCI.
In contrast to its most well-known competitor, Uber, it offers not only a business-to-consumer product but also a business-to-business product. Although currently smaller in terms of revenues at Gett today, the corporate market offers higher profitability and also immense growth opportunities, as competition is lower. Also in contrast to Uber, Gett deals solely with regulated taxis, making it less confrontational with incumbent solutions.
In the first quarter 2016 Gett announced its acquisition of Radio Taxi in UK, which will bring the total of licensed black cabs to Gett's platform to 11,500, equivalent to half of all the licensed black cabs in London. Gett acquired Radio Taxi's parent company Mountview House Group which also operates Xeta, another black cab brand, as well as One Transport, the global transport solutions platform which provides corporate clients with access to vehicles in almost every country around the world.
Vostok New Ventures has invested USD 25 mln in Gett and the transaction was finalized on August 11, 2014. Vostok New Ventures' 25 mln investment was part of a larger round and structured as a convertible loan. The loan was converted into equity in December 2014.
As per March 31, 2016, the Gett investment is valued at USD 34.5 mln, up 34.6% from Vostok New Ventures' entry level, on the basis of a transaction in the company which was finalized in May 2015, when a new Polish investor, MCI, invested USD 20 mln in Gett.
| Total Value (USD) | 34,380,153 |
|---|---|
| Share of total portfolio | 6.5% |
| Share of total shares outstanding | 2.3% |
Website: blablacar.com
BlaBlaCar connects people looking to travel long distances with drivers already going the same way, so both can save money by sharing the cost of their journey. This model has made BlaBlaCar a leader of the global sharing economy with over 20 million members in 19 countries, and is helping to make road travel more efficient and affordable.
BlaBlaCar was founded in 2006 by Frédéric Mazzella, CEO, Francis Nappez, CTO, and Nicolas Brusson, COO and has now raised more than USD 300 mln in funding to date. Currently, BlaBlaCar operates in Benelux, Croatia, France, Germany, Hungary, India, Italy, Mexico, Poland, Portugal, Romania, Russia, Serbia, Spain, Turkey, Ukraine and the United Kingdom.
During the last quarter of 2015, BlaBlaCar has increased its efforts in emerging markets including Russia and India and also launched the service in a number of South American markets including Brazil. In January 2016, BlaBlaCar launched in two new markets, Czech Republic and Slovakia.
In September 2015, Vostok New Ventures invested EUR 30 mln into BlaBlaCar in connection with a larger funding round of USD 200 mln, which was led by Insight Ventures and Lead Edge Capital. The investment comprised of both primary and secondary shares. Vostok New Ventures owns approximately 2.3% of BlaBlaCar on a fully diluted basis following the transaction. As per March 31, 2016, BlaBlaCar is valued as per the valuation in this latest transaction in the company.
BlaBlaCar Propertyfinder
| Total Value (USD) | 19,999,199 |
|---|---|
| Share of total portfolio | 3.8% |
| Share of total shares outstanding | 10.0% |
Website: propertyfinder.ae
Propertyfinder Group was founded 10 years ago by Michael Lahyani and operates real estate classifieds platforms in 7 countries across the MENA region (Middle East/North Africa). Propertyfinder is headquartered in Dubai, employs more than 150 people and is profitable in its core markets as well as on a group level. For more information on Propertyfinder, please visit www.propertyfinder.ae. Vostok New Ventures agreed to invest USD 20 mln for 10% in primary equity of the company in the fourth quarter 2015. In December 2015, the first USD 5 mln was disbursed to the company and the remaining USD 15 mln was disbursed during the first quarter 2016. As per March 31, 2016 Propertyfinder is valued on the basis of this transaction.
Wallapop Merro
| Total Value (USD) | 10,302,197 |
|---|---|
| Share of total portfolio | 1.9% |
| Share of total shares outstanding | 4.7% |
Website: wallapop.com
Wallapop is an online marketplace that enables users to buy and sell goods in categories such as fashion, decoration, motorcycles, electronics, and more. The platform was founded by Agustin Gomez, Gerard Olivé and Miguel Vicente in January 2013.
Wallapop has over a short space of time taken great strides in terms of market share in online classifieds in Spain and are also making good inroads to France. Wallapop is also active in the UK and has recently launched in the US. During the fall of 2015, Wallapop increased its marketing efforts in the US, taking on competitors such as Craigslist and Ebay.
During 2015, Vostok New Ventures invested approximately USD 9 mln in Wallapop, a Barcelona based mobile-only classifieds operator in three separate transactions. Vostok New Ventures currently indirectly owns 4.7% of the company and as per March 31, 2016, Vostok New Ventures values the company on the basis of the latest transactions in Wallapop.
| Total Value (USD) | 7,513,333 |
|---|---|
| Share of total portfolio | 1.4% |
| Share of total shares outstanding | 22.7% |
Merro is an investment holding company that focuses on online marketplace businesses with network effects in developing markets. Merro was founded in 2014 by Henrik Persson, Michael Lahyani and Pierre Siri having each a third of the company. Henrik Persson was formerly Head of Investments at Kinnevik and is our old trusted partner from many ventures, most notably Avito. Michael Lahyani is the founder and CEO of Propertyfinder, the largest real estate property portal in the MENA region. Pierre Siri has a long background within online classifieds which includes the role as CEO and investor in Blocket.se, the Swedish online classifieds asset that is today owned by Schibsted and in many ways the benchmark asset for online classifieds players globally.
Merro's portfolio includes a number of investments, most of which are online classifieds companies in the MENA region. These are Opensooq, the leading online classifieds operator in the MENA region, Propertyfinder, the leading property vertical in the MENA region, Dubicars, an early stage car classifieds site in the UAE and two other smaller investments.
- Opensooq represents the largest value in Merro's portfolio and in December, 2015 Opensooq generated more than one billion monthly page views which represents 300% growth year on year. Opensooq is on a clear path in becoming the "Avito" of the MENA-region.
- Propertyfinder represents the second largest value in Merro's portfolio. Over the past ten years, Propertyfinder has quickly become the leading real estate classified website in the UAE, Qatar, Bahrain and Lebanon and is growing in popularity in KSA, Egypt and Morocco.
- Dubicars generates more than a million weekly page views and has more than 400 active car dealers from across the UAE
- Camfind, Merro's latest investment, is a technology company that simplifies the creation of classifieds listings dramatically through its API (application programming interface).
As per March 31, 2016, Merro is valued on basis of the transaction Vostok New Venture participated in which closed in July 2015.
| Vostok New Ventures' number of shares as at | |
|---|---|
| March 31, 2016 | 8,808,426 |
| Total Value (USD) | 4,330,053 |
| Share of total portfolio | 0.8% |
| Share of total shares outstanding | 33.9% |
Website: yell.ru
Yell.ru is an online local search utility with user reviews about local companies and services in Russia. Reviews help consumers make better-informed decisions when purchasing services or goods. Yell has several listed comparable peers in other markets, which focus on local search and reviews, most notably Yelp.com in the US.
Vostok New Ventures invested USD 8 mln in the context of a total raise of USD 11 mln in 2014 that included participation from Yell's current principal investor Investment AB Kinnevik. Vostok New Ventures values the company on the basis of a valuation model based on revenue multiples of comparable listed peers and owns 33.9% of Yell.ru as per March 31, 2016.
In March 2016, Yell.ru had 4.8 mln unique visitors and 15.8 million page views according to liveinternet.ru. So far, Yell has received more than 1.5 million user-generated reviews. Roughly 30% of Yell's traffic is currently coming from mobile channels.
Yell.ru is headed by Swedish internet entrepreneur Mathias Eklöf, who runs the company from Moscow.
Yell.ru Naseeb Networks (Rozee and Mihnati)
| Total Value (USD) | 4,500,000 |
|---|---|
| Share of total portfolio | 0.9% |
| Share of total shares outstanding | 23% |
Naseeb Networks operates leading employment marketplaces in Pakistan (Rozee) and Saudi Arabia (Mihnati) focused on facilitating the matching between jobseekers and employment opportunities. Its complete range of end-to-end employment solutions are used by over 10,000 companies and 5 million job seekers, processing over 1.5 million job applications every month.
In 2013, Naseeb Networks completed its acquisition of Mihnati.com, Saudi Arabia's largest indigenous recruiting solutions provider. After its initial market dominance in Pakistan, Naseeb Networks has grown Mihnati's profitability and visits over 500% by leveraging its advanced cloud based recruitment product portfolio, back office operations and business expertise in employment marketplaces.
Vostok New Ventures invested USD 4.5 mln in Naseeb in May 2015. The total funding round amounted to USD 6.5 mln and included participation from Piton Capital. Per March 31, 2016, Vostok New Ventures values Naseeb on the basis of this transaction.
OneTwoTrip IZH Holding
| Total Value (USD) | 4,000,000 |
|---|---|
| Share of total portfolio | 0.8% |
| Share of total shares outstanding | 6.1% |
Website: onetwotrip.com
(Zameen and Bayut)
| Total Value (USD) | 4,742,928 |
|---|---|
| Share of total portfolio | 0.9% |
| Share of total shares outstanding | 5.9% |
OneTwoTrip is serving the underpenetrated USD 63 bln Russian travel market characterized by lack of focused local/foreign competition, and with inherent scalability via fully virtual inventory. It is the number 1 player in a leading e-commerce segment with the best overall product proposition, nimble and bottom-line focused executive team and rapidly growing mobile channel. Opportunity to participate in the ongoing growth in online penetration of travel products, coupled with diversification of revenue streams, including major upside opportunities in
- (1) hotel cross-sell,
- (2) dynamic packaging (tix + lodging combo), and
- (3) geographic expansion.
Vostok New Ventures invested USD 4 mln into One-TwoTrip during the third quarter 2015. The transaction closed in late July and as per March 31, 2016 the company is valued based on price paid in the transaction.
I ZH Holding owns and operates Pakistan's leading property portal Zameen and Bayut, one of the leading property portals in UAE.
Zameen is focused on the professional seller segment of real estate (agencies and developers) where it sells different packages of listing features and advertising to the Sellers. Currently, over 90% of listings on Zameen are from professional sellers. Zameen offers different types of premium listings, highlighted listings, Email advertising to specific member segments and banners. Zameen also hosts property expos and have a property magazine it distributes.
Bayut is also focused on the professional seller segment of real estate (agencies and developers) where it sells different packages of listing features and advertising to the Sellers. Bayut offers similar packages as Zameen in Pakistan but at a higher price point: premium listings, highlighted listings, Email advertising to specific member segments and banners. Bayut hosts property Expos several times a year.
Other investors in IZH Holding are among others, the founders, Gilles Blanchard with a background at Seloger in France and Simon Baker with a background at Australian REA Group.
Vostok New Ventures has invested a total of USD 2 mln in IZH Holding. As per March 31, 2016, Vostok New Ventures values its ownership in IZH Holding to USD 4.7 mln following a recent transaction in IZH Holding, which closed in 1Q16. IZH announced the the new round which amounted to USD 20 mln of new capital in the end of January, 2016. Vostok New Ventures did not participate in this transaction.
El Basharsoft Debt investments
(Wuzzuf and Forasna)
| Total Value (USD) | 1,002,000 |
|---|---|
| Share of total portfolio | 0.2% |
| Share of total shares outstanding | 14.8% |
Wuzzuf is one of the leading jobs verticals in Egypt. Its main competitor is Bayt, a regional jobs vertical centered around UAE. Wuzzuf focuses on white collar workers with English CVs. In terms of monthly jobs postings within this area it leads versus Bayt and is quickly catching up also in terms of traffic. It has as much as 27% of the market for new graduates looking for jobs in its focus area.
Interestingly also it has a second brand, Forasna, which focuses on the enormous and virtually untapped blue collar market in Egypt. Although a younger venture compared to Wuzzuf, a successful product in this area is something that has a potential far beyond the borders of Egypt and with very little competition.
Wuzzuf was founded in 2009 by Ameer Sherif, an Egyptian national, who we believe is very driven. His ability to bootstrap the company, particularly through the political events of 2011, and turn it to profitability in 2014 is a testament to his dedication. He was previously backed by the company 500 Startups.
As per March 31, 2016, Vostok New Ventures values its investment into el Basharsoft as per the valuation in the latest primary transaction in the company completed during the third quarter 2015. In 1Q16, there was also a small secondary transaction in the company at the same valuation as at Vostok New Ventures' initial investment.
Delivery Hero
Delivery Hero (DHH) is a worldwide network of online food ordering sites with over 200,000 restaurants connected to its service. The company operates in 24 countries across five continents, including Germany, Sweden, UK, Korea, China and India. Delivery Hero's restaurant partners generate more than one billion USD in annual sales via online orders or mobile applications and deliver more than 10 million meals every month. Delivery Hero has more than 1,500 employees around the world with 440 staff working from its Berlin headquarters.
Vostok New Ventures invested into EUR 25 mln in senior secured debt of Delivery Hero in the summer of 2014. In August 2015, the loan was restructured which resulted in new terms including an additional equity component and amended nominal interest rate. The new nominal interest rate is 7.25–10.25% and the loan matures in August 2018.
As per March 31, 2016, the equity component of the Delivery Hero investment is valued at USD 2.59 mln on the basis of the most recent primary equity transaction in the company. The loan is valued at USD 24.68 mln based on amortized cost using an NPV-model.
Kite Ventures
Kite Ventures is a global venture investment company specializing in marketplace and transactional network investments. The firm seeks to invest in companies in Europe and New York. Kite Ventures was founded in 2009 and has invested over USD 250 mln across 20 portfolio companies.
Vostok New Ventures owns EUR 8 mln in senior secured debt of Kite Ventures. The debt carries 13% annual nominal interest and has a 2-year maturity. In September 2015, Kite paid its interest obligation of EUR 1 mln for the first year of the loan. The Kite investment also features a smaller equity component, which on March 31, 2016 carried no value.
Investments
During the first quarter 2016, gross investments in financial assets were USD 15.03 mln (2015: 4.07) and proceeds from sales were USD 0 mln (2015: 2.5). Investments concern investments in Propertyfinder and el Basharsoft.
Group – results for the period and net asset value
During the period, the result from financial assets at fair value through profit or loss amounted to USD 2.79 mln (2015: 17.11), mainly coming from the revaluation of IZH Holding. Dividend and coupon income was USD 0 mln (2015: 0.03).
Net operating expenses amounted to USD -0.76 mln (2015: -0.71).
Net financial items were USD 2.11 mln (2015: -3.60).
Net result for the period was USD 4.14 mln (2015: 12.83).
Total shareholders' equity amounted to USD 507.59 mln on March 31, 2016 (December 31, 2015: 503.44).
Liquid assets
The liquid assets of the group, defined as cash and bank deposits adjusted for concluded but not yet settled share transactions, amounted to USD 28.19 mln on March 31, 2016 (December 31, 2015: 43.66).
Income statements – Group
| (Expressed in USD thousands) | Jan 1, 2016– Mar 31, 2016 |
Jan 1, 2015– Mar 31, 2015 |
|---|---|---|
| Result from financial assets at fair value through profit or loss1 | 2,788 | 17,106 |
| Dividend and coupon income | – | 34 |
| Total operating income | 2,788 | 17,140 |
| Operating expenses | -761 | -714 |
| Operating result | 2,027 | 16,426 |
| Financial income and expenses | ||
| Interest income | 1,161 | 1,213 |
| Interest expense | -284 | – |
| Currency exchange gains/losses, net | 1,234 | -4,808 |
| Net financial items | 2,111 | -3,595 |
| Result before tax | 4,138 | 12,831 |
| Taxation | – | – |
| Net result for the financial period | 4,138 | 12,831 |
| Earnings per share (in USD) | 0.06 | 0.17 |
| Diluted earnings per share (in USD) | 0.06 | 0.17 |
- Financial assets at fair value through profit or loss (including listed bonds) are carried at fair value. Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the income statement within 'Result from financial assets at fair value through profit or loss' in the period in which they arise.
Statement of comprehensive income
| (Expressed in USD thousands) | Jan 1, 2016– | Jan 1, 2015– |
|---|---|---|
| Mar 31, 2016 | Mar 31, 2015 | |
| Net result for the financial period | 4,138 | 12,831 |
| Other comprehensive income for the period | ||
| Items that may be classified subsequently to profit or loss: | ||
| Currency translation differences | 22 | -66 |
| Total other comprehensive income for the period | 22 | -66 |
| Total comprehensive income for the period | 4,161 | 12,765 |
Total comprehensive income for the periods above is entirely attributable to the equity holders of the parent company.
Balance sheets – Group
| (Expressed in USD thousands) | Mar 31, 2016 | Dec 31, 2015 |
|---|---|---|
| NON-CURRENT ASSETS | ||
| Financial non-current assets | ||
| Financial assets at fair value through profit or loss | 466,360 | 463,538 |
| Loan receivables | 24,682 | 23,450 |
| Total financial non-current assets | 491,042 | 486,988 |
| CURRENT ASSETS | ||
| Cash and cash equivalents | 28,185 | 43,660 |
| Loan receivables | 9,694 | 9,072 |
| Tax receivables | 345 | 309 |
| Other current receivables | 23 | 83 |
| Total current assets | 38,248 | 53,123 |
| TOTAL ASSETS | 529,290 | 540,111 |
| SHAREHOLDERS' EQUITY (including net result for the financial period) | 507,591 | 503,435 |
| CURRENT LIABILITIES | ||
| Non-interest bearing current liabilities | ||
| Tax payables | 396 | 393 |
| Other current liabilities | 923 | 15,922 |
| Accrued expenses | 152 | 135 |
| Interest bearing current liabilities | ||
| Borrowings | 20,228 | 20,224 |
| Total current liabilities | 21,700 | 36,675 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 529,290 | 540,111 |
Statement of Changes in Equity – Group
| Balance at March 31, 2016 | 23,520 | 42,996 | -63 | 441,137 | 507,591 |
|---|---|---|---|---|---|
| Total transactions with owners | – | – | – | -6 | -6 |
| Redemption program | – | – | – | -6 | -6 |
| Transactions with owners: | |||||
| Total comprehensive income for the period January 1, 2016 to March 31, 2016 |
– | – | 22 | 4,138 | 4,161 |
| Currency translation differences | – | – | 22 | – | 22 |
| Other comprehensive income for the period | |||||
| Net result for the period January 1, 2016 to March 31, 2016 |
– | – | – | 4,138 | 4,138 |
| Balance at January 1, 2016 | 23,520 | 42,996 | -85 | 437,005 | 503,435 |
| Balance at March 31, 2015 | 25,727 | 43,030 | -109 | 329,858 | 398,506 |
| Total transactions with owners | -207 | -2,523 | – | – | -2,730 |
| Buy back of own shares | -207 | -2,523 | – | – | -2,730 |
| Transactions with owners: | |||||
| Total comprehensive income for the period January 1, 2015 to March 31, 2015 |
– | – | -66 | 12,831 | 12,765 |
| Currency translation differences | – | – | -66 | – | -66 |
| Other comprehensive income for the period | |||||
| Net result for the period January 1, 2015 to March 31, 2015 |
– | – | – | 12,831 | 12,831 |
| Balance at January 1, 2015 | 25,934 | 45,553 | -43 | 317,027 | 388,470 |
| (Expressed in USD thousands) | Share capital |
Additional paid in capital |
Other reserves |
Retained earnings |
Total |
Cash flow statements – Group
| (Expressed in USD thousands) | Jan 1, 2016– | Jan 1, 2015– |
|---|---|---|
| Mar 31, 2016 | Mar 31, 2015 | |
| OPERATING ACTIVITES | ||
| Result before tax | 4,138 | 12,831 |
| Adjustment for: | ||
| Interest income | -1,161 | -1,213 |
| Interest expense | 284 | – |
| Currency exchange gains/-losses | -1,234 | 4,808 |
| Depreciations and write downs | – | 5 |
| Result from financial assets at fair value through profit or loss | -2,788 | -17,106 |
| Dividend and coupon income | – | -34 |
| Change in current receivables | 64 | 60 |
| Change in current liabilities | 5 | 57 |
| Net cash used in operating activities | -692 | -593 |
| Investments in financial assets | -15,033 | -4,073 |
| Sales of financial assets | – | 23,618 |
| Dividend and coupon income | – | 34 |
| Interest received | 497 | 659 |
| Tax paid | -31 | -32 |
| Net cash flow used in/from operating activities | -15,259 | 19,612 |
| FINANCING ACTIVITIES | ||
| Interest paid for borrowings | -281 | – |
| Redemption program transaction fees | -6 | – |
| Buy back of own shares | – | -2,730 |
| Net cash flow used in financing activities | -287 | -2,730 |
| Change in cash and cash equivalents | -15,546 | 16,882 |
| Cash and cash equivalents at beginning of the period | 43,660 | 14,050 |
| Exchange gains/losses on cash and cash equivalents | 71 | -469 |
| Cash and cash equivalents at end of period | 28,185 | 30,463 |
Key financial ratios – Group
| 1Q 2016 | 1Q 2015 | |
|---|---|---|
| Return on capital employed, %1 | 0.82 | 3.26 |
| Equity ratio, %2 | 95.90 | 99.62 |
| Shareholders' equity/share, USD3 | 6.91 | 5.42 |
| Earnings/share, USD4 | 0.06 | 0.17 |
| Diluted earnings/share, USD5 | 0.06 | 0.17 |
| Net asset value/share, USD6 | 6.91 | 5.42 |
| Weighted average number of shares for the financial period | 73,499,555 | 73,798,869 |
| Weighted average number of shares for the financial period (fully diluted) | 73,499,555 | 73,798,869 |
| Number of shares at balance sheet date | 73,499,555 | 73,506,155 |
-
Return on capital employed is defined as the Group's result for the period plus interest expenses plus/less exchange differences on financial loans divided by the average capital employed (the average total assets less non-interest bearing liabilities over the period). Return on capital employed is not annualised.
-
Equity ratio is defined as shareholders' equity in relation to total assets.
-
Shareholders' equity/share is defined as shareholders' equity divided by total number of shares.
-
Earnings/share is defined as result for the period divided by average weighted number of shares for the period.
-
Diluted earnings/share is defined as result for the period divided by average weighted number of shares for the period calculated on a fully diluted basis.
-
Net asset value/share is defined as shareholders' equity divided by total number of shares.
Income statement – Parent
| Net result for the financial period | 2,575 | -2,834 |
|---|---|---|
| Net financial items | 3,301 | -2,444 |
| Currency exchange gains/losses, net | 1,234 | -4,476 |
| Interest expense | -284 | – |
| Interest income | 2,350 | 2,032 |
| Financial income and expenses | ||
| Operating result | -725 | -390 |
| Dividend and coupon income | – | 34 |
| Operating expenses | -789 | -746 |
| Result from financial assets at fair value through profit or loss | 63 | 323 |
| (Expressed in USD thousands) | Jan 1, 2016– Mar 31, 2016 |
Jan 1, 2015– Mar 31, 2015 |
Statement of comprehensive income
| (Expressed in USD thousands) | Jan 1, 2016– Mar 31, 2016 |
Jan 1, 2015– Mar 31, 2015 |
|---|---|---|
| Net result for the financial period | 2,575 | -2,834 |
| Other comprehensive income for the period | ||
| Items that may be classified subsequently to profit or loss: | ||
| Currency translation differences | – | – |
| Total other comprehensive income for the period | – | – |
| Total comprehensive income for the period | 2,575 | -2,834 |
Balance sheet – Parent
| (Expressed in USD thousands) | Mar 31, 2016 | Dec 31, 2015 |
|---|---|---|
| NON-CURRENT ASSETS | ||
| Financial non-current assets | ||
| Shares in subsidiaries | 84,389 | 84,389 |
| Financial assets at fair value through profit or loss | 805 | 1,021 |
| Loan receivables | 24,682 | 23,450 |
| Receivables from Group companies | 79,164 | 78,695 |
| Total financial non-current assets | 189,039 | 187,555 |
| CURRENT ASSETS | ||
| Cash and cash equivalents | 13,502 | 12,964 |
| Loan receivables | 9,694 | 9,072 |
| Other current receivables | – | 47 |
| Total current assets | 23,196 | 22,082 |
| TOTAL ASSETS | 212,236 | 209,637 |
| SHAREHOLDERS' EQUITY (including net result for the financial period) | 191,092 | 188,523 |
| CURRENT LIABILITIES | ||
| Non-interest bearing current liabilities | ||
| Liabilities to group companies | 743 | 727 |
| Other current liabilities | 77 | 85 |
| Accrued expenses | 95 | 78 |
| Interest bearing current liabilities | ||
| Borrowings | 20,228 | 20,224 |
| Total current liabilities | 21,143 | 21,114 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 212,236 | 209,637 |
Statement of Changes in Equity – Parent
| (Expressed in USD thousands) | Share | Additional | Retained | Total |
|---|---|---|---|---|
| capital | paid in capital | earnings | ||
| Balance at January 1, 2015 | 25,934 | 45,553 | 149,243 | 220,729 |
| Net result for the period January 1, 2015 to March 31, 2015 | – | – | -2,834 | -2,834 |
| Other comprehensive income for the period | ||||
| Currency translation differences | – | – | – | – |
| Total comprehensive income for the period January 1, 2015 to March 31, 2015 |
– | – | -2,834 | -2,834 |
| Transactions with owners: | ||||
| Buy back of own shares | -207 | -2,523 | – | -2,730 |
| Total transactions with owners | -207 | -2,523 | – | -2,730 |
| Balance at March 31, 2015 | 25,727 | 43,030 | 146,409 | 215,166 |
| Balance at January 1, 2016 | 23,520 | 42,996 | 122,006 | 188,523 |
| Net result for the period January 1, 2016 to March 31, 2016 | – | – | 2,575 | 2,575 |
| Other comprehensive income for the period | ||||
| Currency translation differences | – | – | – | – |
| Total comprehensive income for the period January 1, 2016 to March 31, 2016 |
– | – | 2,575 | 2,575 |
| Transactions with owners: | ||||
| Redemption program | – | – | -6 | -6 |
| Total transactions with owners | – | – | -6 | -6 |
| Balance at March 31, 2016 | 23,520 | 42,996 | 124,576 | 191,092 |
Note 1 Accounting principles
This consolidated interim report is prepared in accordance with IAS 34 Interim Financial Reporting. The same accounting principles and methods of calculations have been applied for the Group as for the preparations of the consolidated accounts for the Company 2015. The Company's 2015 annual report is available at the Company's website: http://www.vostoknewventures.com/en/investor-relations/financialreports/
The interim financial information on pages 12–22 are an integral part of this financial report.
Note 2 Related party transactions
During the period Vostok New Ventures has recognized the following related party transactions:
| USD thousand | Operating expenses | Current liabilities | ||
|---|---|---|---|---|
| 1Q 2016 | 1Q 2015 | 1Q 2016 | 1Q 2015 | |
| Key management and Board of Directors1 |
-251 | -231 | -55 | -132 |
- Compensation paid or payable includes salary to the management and remuneration to the Board members.
Note 3 Fair value estimation
The numbers below are based on the same accounting and valuation policies as used in the Company's most recent Annual Report. For more information regarding financial instruments in level 2 and 3 see note 3 in the Company's Annual Report 2015. The fair value of financial instruments is measured by level of the following fair value measurement hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The following table presents the group's assets that are measured at fair value at March 31, 2016.
| Level 1 | Level 2 | Level 3 | Total balance | |
|---|---|---|---|---|
| Financial assets at fair value | ||||
| through profit or loss | – | 462,030 | 4,330 | 466,360 |
| Total assets | – | 462,030 | 4,330 | 466,360 |
The following table presents the group's assets that are measured at fair value at December 31, 2015.
| Level 1 | Level 2 | Level 3 | Total balance |
|
|---|---|---|---|---|
| Financial assets at fair value | ||||
| through profit or loss | – | 457,876 | 5,662 | 463,538 |
| Total assets | – | 457,876 | 5,662 | 463,538 |
The following table presents the group's changes of financial assets in level 3.
| Level 3 | |
|---|---|
| Opening balance January 1, 2016 | 5,662 |
| Transfers from level 3 | – |
| Change in fair value and other | -1,332 |
| Closing balance March 31, 2016 | 4,330 |
During the first quarter of 2016 no transfer between level 2 and 3 has been done. The Avito investment is valued on the basis of the latest transaction (adjusted for a dividend paid out from Avito in December 2015) as per March 31, 2016, which values the company at USD 2.48 bln. The investments in BlaBlaCar, Gett, Propertyfinder, OneTwo-Trip, Wallapop, Merro, Naseeb Networks, Zameen, el Basharsoft and the remaining Delivery Hero equity are classified as level 2 as the valuations are based on the price paid in each respective transaction. Yell is classified as a level 3 investment, based on a valuation model based on revenue multiples of comparable listed peers.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Investments in assets that are not traded on any market will be held at fair value determined by recent transactions made at prevailing market conditions or different valuation models depending on the characteristics of the company as well as the nature and risks of the investment. These different techniques may include discounted cash flow valuation (DCF), exit-multiple valuation also referred to as Leveraged Buyout (LBO) valuation, asset based valuation as well as forward looking multiples valuation based on comparable traded companies. Usually, transaction- based valuations are kept unchanged for a period of 12 months unless there is cause for a significant change in valuation. After 12 months, the group usually derives fair value for non-traded assets through any of the models described above.
The validity of valuations based on a transaction is inevitably eroded over time, since the price at which the investment was made reflects the conditions that existed on the transaction date. At each reporting date, possible changes or events subsequent to the relevant transaction are assessed and if this assessment implies a change in the investment's fair value, the valuation are adjusted accordingly. The transaction-based valuations are frequently assessed using multiples of comparable traded companies for each unlisted investment or other valuation models.
Avito
The Group's investment in Avito is valued as a level 2 investment as per March 31, 2016.
As per March 31, 2016, Vostok New Ventures has valued Avito on the basis of a transaction in the company announced on October 23, 2015. Naspers Ltd, one of Avito's shareholders, acquired secondary shares from other existing shareholders to increase its stake from 17.4% to 67.9% of the outstanding shares in Avito at an equity valuation of USD 2.7 bln, which included cash in the company of approximately USD 240 mln. The transaction closed in November 2015.
Vostok New Ventures did not participate in the transaction and remains a minority shareholder in Avito with a 13.3% stake in the company on a fully diluted basis. The valuation as per March 31, 2016 of Vostok New Ventures stake in Avito is valued at USD 338 mln, which is based on the price paid in the transaction adjusted for a dividend distribution that occurred in December 2015. Vostok New Ventures received USD 30.6 mln in dividends from Avito. Other than the dividend distribution, nothing material has happened at Avito between the closing of transaction and March 31, 2016.
For reference Vostok New Ventures internal valuation model based on multiples of listed peers indicates a valuation close to the transaction based valuation and the Company will continue to monitor and analyze Avito's fair value continuously going forward.
Yell.ru
Following the latest transaction in the company which closed in 1Q15, Vostok New Ventures owns 33.9% of Yell.ru fully diluted. As per March 31, 2016, Yell is classified as a level 3 investment as it is valued on the basis of a revenue multiples model and that model-generated value is deemed the best fair value estimate of Yell.ru as per March 31, 2016. The model generates a valuation approx. 20% lower than the transaction based valuation. In USD terms Yell.ru has been adversely affected by the ruble's depreciation during 2015 but as the company keeps its cash in hard currency some of the negative pressure has been cushioned.
| Sensitivity in model-based Yell valuation as per March 31, 2016 |
|||||
|---|---|---|---|---|---|
| –20% | –10% | +10% | +20% | ||
| Valuation of Vostok New Ventures' Yell investment, USD thousand |
3,464 | 3,897 | 4,330 | 4,763 | 5,169 |
| Revenue multiple used in valuation model |
2.8x | 3.2x | 3.5x | 3.9x | 4.2x |
Gett
As per March 31, 2016, the Gett investment is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company. In May 2015, a new Polish investor, MCI, invested USD 20 mln in Gett. Following this transaction Vostok New Ventures has as per June 30, 2015 revalued its stake in the company on the basis of the price per share paid in the MCI transaction. As per March 31, 2016 Vostok New Ventures' holding is valued at USD 34.5 mln, up some 33% from Vostok New Ventures' entry level. Since the latest transaction in Gett, the company has progressed inline with the budget and nothing material has happened at the company that would suggest that the transaction-based value is no longer valid.
BlaBlaCar
As per March 31, 2016, the BlaBlaCar investment is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company. The EUR 30 mln transaction closed in September 2015 and Vostok New Ventures owns approximately 2.3% of BlaBlaCar on a fully diluted basis following the transaction.
Propertyfinder
As per March 31, 2016, the Propertyfinder investment is classified as a level 2 investment as it is valued at USD 20 mln on the basis of the latest transaction in the company. During 2015, Vostok New Ventures disbursed USD 5 mln out of the USD 20 mln investment in total. The remaining USD 15 mln tranche was disbursed during the first quarter of 2016.
Wallapop
As per March 31, 2016, Wallapop is classified as a level 2 investment as it is valued on the basis of the latest transactions in the company. Vostok New Ventures completed a follow up investment of EUR 3.5 mln in October 2015 and as per March 31, 2016 Vostok New Ventures' holding is valued at USD 10.3 mln.
Merro
As per March 31, 2016, Merro is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company. Vostok New Ventures finalized its investment into Merro in August 2015. Merro is Dubai-based investment platform which currently has five assets: Opensooq, Propertyfinder, Dubicars, Camfind and one other smaller undisclosed investment.
Naseeb Networks
As per March 31, 2016, Naseeb Networks is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company. During the second quarter 2015, Vostok New Ventures made an investment in Naseeb Networks of USD 4.5 mln. As per March 31, 2016 Vostok New Ventures' holding is valued at USD 4.5 mln on the basis of the price per share paid in this recent funding round.
The investment in Naseeb Networks, where the Company holds 23%, is accounted applying fair value. This treatment is permitted by IAS 28 'Investments in associates', which allows investments to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IAS 39, with changes in fair value recognized in the income statement in the period of change.
OneTwoTrip
As per March 31, 2016, OneTwoTrip is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company. Vostok New Ventures closed its USD 4 mln investment into OneTwoTrip in July 2015. The Company invested into newly issued common shares. As per March 31, 2016 Vostok New Ventures owns 6.1% of the company on a fully diluted basis.
IZH holding (Zameen and Bayut)
As per March 31, 2016, IZH holding is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company which was finalized during the first quarter of 2016. Vostok New Ventures did not participate in this funding round. As per March 31, 2016 Vostok New Ventures' holding is valued at USD 4.7 mln on the basis of the price per share paid in this very recent capital raising.
El Basharsoft
As per March 31, 2016, el Basharsoft (Wuzzuf and Forasna) is classified as a level 2 investment as it is valued on the basis of the latest transaction in the company which closed in the end of July 2015. Vostok New Ventures has invested USD 1 mln in the company of which 900k was in primary shares through its entity Vostok Cooperatief. In the first quarter 2016, Vostok New Ventures acquired secondary shares for USD 34k at the same valuation when the Company first invested in el Basharsoft. Vostok New Ventures owns 14.8% of Wuzzuf on a fully diluted basis as per March 31, 2016.
Delivery Hero (equity component)
As per March 31, 2016, the loan receivable is valued at amortized cost using an NPV-model and the equity component is valued at fair value through profit or loss on the basis of the latest material equity transaction in Delivery Hero in the third quarter of 2015. As per March 31, 2016, the equity component is valued at USD 2.59 mln.
Loan receivables
The fair value estimation of loan receivables relating to Delivery Hero and Kite Ventures is outlined in the table below.
Fair value estimation of loan receivables
| Mar 31, | Dec 31, | ||
|---|---|---|---|
| 2016 | 2015 | ||
| Short-term | 9,694 | 9,072 | |
| Long-term | 24,682 | 23,450 | |
| Total loan receivables | 34,376 | 32,522 |
Carrying value corresponds to fair value of loans receivables. There is no formal credit rating for the borrowers of the loans but Vostok New Ventures considers it is probable that all amounts due will be collected. Delivery Hero has raised approximately USD 400 million during 2015 (2014: USD 260 million) and will raise additional funds to finance the further growth of the business. Delivery Hero pays cash interest payments on a monthly basis. Therefore, Vostok New Ventures does not see any grounds for the impairment.
Current liabilities
The book value for interest-bearing loans, accounts payable and other financial liabilities are deemed to correspond to the fair values.
Change in financial assets at fair value through profit or loss
| Company | Opening balance Jan 1, 2016 |
Investments/ (disposals), net, USD |
FV change | Closing balance Mar 31, 2016 |
Percentage weight of total portfolio |
|---|---|---|---|---|---|
| Avito | 338,481,743 | – | – | 338,481,743 | 64.0% |
| Gett | 34,516,317 | – | – | 34,516,317 | 6.5% |
| BlaBlaCar | 33,181,762 | – | 1,198,391 | 34,380,153 | 6.5% |
| Propertyfinder | 19,999,199 | – | – | 19,999,199 | 3.8% |
| Wallapop | 10,302,197 | – | – | 10,302,197 | 1.9% |
| Merro | 7,513,333 | – | – | 7,513,333 | 1.4% |
| Yell.ru | 5,662,418 | – | -1,332,365 | 4,330,053 | 0.8% |
| Naseeb Networks (Rozee and Mihnati) | 4,500,000 | – | – | 4,500,000 | 0.9% |
| OneTwoTrip | 4,000,000 | – | – | 4,000,000 | 0.8% |
| IZH Holding (Zameen and Bayut) | 2,000,000 | – | 2,742,928 | 4,742,928 | 0.9% |
| El Basharsoft (Wuzzuf and Forasna) | 968,000 | 34,000 | – | 1,002,000 | 0.2% |
| Delivery Hero Holding GmbH, equity component | 2,412,857 | 80 | 179,333 | 2,592,270 | 0.5% |
Note 4 Events after the reporting period
After the end of the period, Vostok New Ventures has invested USD 1.2 mln (SEK 10 mln) in Swedish-founded Carable (Garantibil), which aims to become a fully automated peer-to-peer marketplace for used cars.
After the end of the period, the Board of Directors has resolved to mandate the Company to repurchase up to 10% of the outstanding shares of the Company.
Note 5 Contingent liabilities
The Swedish Tax Agency (STA) has audited Vostok New Ventures AB's VAT returns for the period January 2013–December 2014 during 2015. According to the STA's decision, Vostok New Ventures AB's is obliged to pay an additional amount of output VAT of SEK 13,767,907 together with tax penalties of SEK 2,753,579 (in total about USD 2 mln) on the services supplied to Vostok New Ventures Ltd. Vostok New Ventures AB has appealed the STA's decision to the administrative court and applied for a deferment of payment, which was approved. Vostok New Ventures AB currently sees no grounds for making provisions for potential additional taxes ensuing from this matter, which is also supported by our legal advisors. However, this is considered to be a contingent liability.
Background
Vostok New Ventures Ltd was incorporated in Bermuda on April 5, 2007 with corporate identity number 39861. The Swedish Depository Receipts of Vostok New Ventures (SDB) are listed on Nasdaq Stockholm, Mid Cap segment, with the ticker VNV SDB.
As of March 31, 2016, the Vostok New Ventures Ltd Group consists of the Bermudian parent company Vostok New Ventures Ltd; one wholly-owned Cypriot subsidiary, Vostok New Ventures (Cyprus) Limited; one controlled Dutch cooperative, Vostok Co-Investment Coöperatief B.A.; and one wholly-owned Swedish subsidiary, Vostok New Ventures AB.
The financial year is January 1–December 31.
Parent company
The parent company finances the Cypriot subsidiary's operations on market terms. The net result for the period was USD 2.58 mln (2015: -2.83).
Financial and Operating risks
The Company's risks and risk management are described in detail in note 3 of the Company's Annual Report 2015.
Upcoming Reporting Dates
Vostok New Ventures' six months report for the period January 1, 2016–June 30, 2016 will be published on August 17, 2016.
May 16, 2016
Per Brilioth
Managing Director
For further information contact Per Brilioth or Björn von Sivers: tel: +46 8 545 015 50. www.vostoknewventures.com