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UPDATE expects 2021 revenue to hit $1.75 bln after COVID catalyst

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March 4 (Reuters) - Russian internet group expects its revenue to grow to about $1.75 billion in 2021 as demand for online services grows as a result of the COVID-19 pandemic. on Thursday reported 2020 revenue of 107.4 billion roubles ($1.5 billion), slightly above a company forecast. Net profit fell 32.1% year-on-year to 10.0 billion roubles as it invested heavily in games and services such as online education, food delivery, and e-commerce.

Coronavirus health restrictions keeping people at home helped online markets in 2020., which owns the popular Vkontakte and Odnoklassniki social networking websites, generates the bulk of its revenue from advertising and gaming.

Fourth-quarter net profit was down 68.8% year-on-year to 1.77 billion roubles, while earnings before interest, tax, depreciation and amortisation (EBITDA) declined 25.4% to 7.31 billion roubles due to investments in games and other units, the London-listed firm said.

It expects its EBITDA margin to increase in 2021 and revenue to reach 127-130 billion roubles.

"We have been investing heavily across all consolidated businesses to take advantage of the acceleration in online penetration...the pandemic acted as a major catalyst for this," Chief Executive Boris Dobrodeev said in a statement.'s advertising business recovered after a hit during the early stages of the pandemic, and advertising revenue was up 10.2% year on year in the fourth quarter.

The company has been expanding its gaming segment. In February, its unit My.Games agreed to invest $1.5 million in U.S.-based studio Pizza Club Games. competitor Yandex, Russia's top internet company, said in February it plans to spend $400-500 million on an e-commerce push this year to help annual revenue reach 305-320 billion roubles. ($1 = 73.7900 roubles) (Reporting by Anna Rzhevkina; additional reporting by Alexander Marrow; Editing by Katya Golubkova and Alexander Smith)