Leading Russian Portal Cian Turns Profit in Q3 Despite War

Leading Russian real estate portal company Cian has released information about its results for Q3 of the 2022 financial year. Highlights of the company's operations for the three months ended 30th of September include:

• Revenue was up 44% year-on-year to RUB 2241 million ($39m) with core business revenue up 46%.
• Profit for the period was RUB 380 million ($6.6m) compared to a loss of RUB 299 million in the comparison period.
• The company's Adjusted EBITDA margin improved 15 ppt to 24.5%.

The ongoing sanctions against many of the country's businesses and the war in Ukraine don't appear to have affected the bottom line of Russia's leading real estate vertical. Cian managed to turn a quarterly profit for the second time since disclosing its figures before floating on the NYSE in November 2021.

Cian CEO, Dmitriy Grigoriev, commented: “We continued to grow our business during the third quarter, despite market conditions remaining to be unprecedentedly adverse. Our focus has been balancing revenue growth in our Core Business with maintaining financial stability of the Company.

The Core Business revenue grew as the result of a considerable increase in our listing and lead generation revenue from Moscow and the Moscow region, a strong increase in demand for leads from developers following the market cooldown, and the successful roll out of price increases in key segments of the market."

Cian's core business consists of its pay-per-listing service (60% of revenue in Q3), a lead generation business (25%) and its display advertising (7.6%). Each of these products saw revenue growth in the third quarter on the back of solid listings volume growth in the company's key Moscow region.

As for Cian's other business units, the picture was mixed. The company's mortgage marketplace saw revenue fall 26% year-on-year to RUB 53m while the C2C rentals business did not generate any meaningful revenue at all in the quarter.

The data and analytics segment saw modest gains from RUB 7m to RUB 10m while the end-to-end segment (an online transaction service that includes document checking, verification, signing and storage, notary services, registration and tax refunds) saw revenues grow substantially from RUB 7m to RUB 27m year-on-year.

Despite the turbulence and expense of an IPO followed by a trading halt in March, the company's latest missive to shareholders mentioned that the portal has been generating significant free cash flow and has accumulated a considerable amount of cash on the balance sheet. Cian said that cash may be distributed to investors but that there are several legal and corporate hindrances to this.