Cian Sees Revenues Jump 37% in 2022 as Russians Rush to Invest in Bricks and Mortar

Cian, the leading real estate portal in Russia, has released a report on its activities for Q4 and the 12 months that ended 31st of December 2022. Highlights from the company's report included:

• Profit for the year amounted to RUB 480 million ($6.8 million), showing the company's strong financial position.
• Revenue increased by 37% year-on-year to RUB 8,266 million ($117.5 million).
• Adjusted EBITDA increased by 425% year-on-year and reached RUB 1,671 million ($23.8 million).
• The Adjusted EBITDA margin for the year improved by 15 percentage points on 2021 to stand at 20.2% for 2022.

Commenting on his company's performance in 2022, Cian CEO Dmitriy Grigoriev said:

“2022 was challenging for us in many aspects and I am very proud and grateful to the management team for their dedication, professionalism and hard work which allowed us to deliver strong results in this unprecedently unpredictable market environment.

Our financial results speak for themselves, not only we achieved almost 40% revenue growth Y-o-Y, but also significantly improved marginality of our business with adjusted EBITDA margin reached 20%. As we stated previously, we are considering our options for deployment of the cash on our balance sheet.”

Although Cian's traffic declined 8% in comparison to 2021, the leading real estate vertical benefitted from a few tailwinds that came into play in the Russian market through 2022.

The company's listings business picked up significantly after the suspension of monetization during the worst of the COVID-19 pandemic throughout 2020 and 2021.

Cian has historically been strong in the wealthy cities of Moscow and St Petersburg whereas its horizontal rival Avito has been strong in provincial areas. Prior to the pandemic, Cian did not monetise many markets outside of its main city markets but in 2022 it increased the number of markets in which it monetises basic listings and raised prices in many markets where it already charged.

The portal also makes a sizeable chunk of its revenue (28.5% in 2022) from charging real estate developers for leads. This line of business saw 77% revenue growth in 2022 thanks to increased demand from buyers in response eager to invest in real estate as Russia's war in Ukraine made other investments risky or illegal. The company also noted that during 2022 it benefitted from:

"the disconnection of international players from the Russian online advertising market, the developers redistributed their advertising budgets to other channels, including classifieds."

Elsewhere, Cian's mortgage business saw revenues decline 22% compared to 2021 as demand failed to recover after a key interest rate hike in late February after Russia invaded Ukraine.

Two more of Cian's business segments also suffered in 2022. The company's C2C rentals segment which charges fees to users for providing an end-to-end solution for online property rentals seems to be on the verge of being discontinued having generated no material income in 2022.

As for what Cian calls its "end-to-end" business segment, it managed to grow revenues by 171% in 2021 to $1.9 million but its Adjusted EBITDA stood at $-6.9 million in 2022. The segment is an online transaction service that includes document checking, verification, signing and storage, notary services, registration and tax refunds.