Russia's Yandex, under new ownership, proposes dividend for first time

By Alexander Marrow

(Reuters) -Russian's Yandex on Tuesday proposed paying dividends for the first time, a shift from the technology firm now under new ownership following a lengthy and complex split from its Nasdaq-listed, Dutch parent company.

A Russian consortium of buyers this month finalised a $5.4 billion cash and shares deal to acquire Yandex's Russia-based assets from Yandex NV, marking the largest corporate exit since Russia's invasion of Ukraine in February 2022, albeit at a hefty discount.

Yandex, since its foundation in the late 1990s dotcom boom, has always prioritised growth over dividends, preferring to reinvest profits in the company's varied tech services, from search and advertising, to ride-hailing, e-commerce and cloud.

While reporting a sharp rise in core earnings and forecasting revenue growth of up to 40% this year, Yandex said it was proposing the board consider a dividend of 80 roubles ($0.9302) per share, to be paid by the end of October, subject to shareholder approval.

"The (dividend) decision was a surprise to us," Veles Capital analyst Artem Mykhailin told Reuters, saying that Yandex had always argued investors received a return through share price growth.

"All the money went into development and growth," he said. "It seems the new shareholders have a slightly different view."

Yandex said the decision had taken its financial results, debt and investment needs into account.

"Everyone wants a sustainable business," a Yandex representative said on a conference call, adding that the new owners want to see development in new markets and products, as well as a decent return on investment.

"It's logical for us to expect a technological advantage both in Russia and in terms of global technologies," the representative said. "That is, Yandex has always been building world-class technology and this approach is not changing."

YNV, the Dutch former parent, is renaming itself Nebius Group and hopes to become a key player in building the infrastructure underpinning artificial intelligence, with Yandex co-founder and former CEO Arkady Volozh back at the helm.

Nebius retained capital-intensive businesses in AI, data labelling and self-driving in the split. That has boosted Yandex's cash flow, said Sinara Finance analyst Konstantin Belov.

"Strategically, I think it would be right for Yandex to look to replace these divisions to support long-term growth," Belov told Reuters. "At the same time, the new major shareholders may have their own considerations and interests."

($1 = 86.0000 roubles)

(Reporting by Alexander Marrow; editing by Shri Navaratnam, Jason Neely and David Evans)