Engage:BDR defies the trend and continues working in Russia

As major companies make plans to scale down, Engage:BDR says its paying its contractors in Moscow with cyptocurrency.

Engage says the company’s app monetisation platform Adcel still has staff in St Petersburg, above.

Engage:BDR is doing it differently when it comes to Russia.

Even as firms around the world pile out of the country in response to the invasion of Ukraine, the ASX-listed advertising-technology small-cap says it is not for turning.

Engage is retaining its work in Russia and Belarus – “despite sanctions placed on both countries” – and told investors its Ukrainian operations will also continue. Engage told The Australian it was able to pay staff using cryptocurrency, dodging controls placed on Russian financial institutions in recent weeks.

In a market update Engage said the company’s app monetisation platform Adcel operations in Russia and Belarus remain ongoing. It has seven staff in Belarus and five in St Petersburg.

Australia has hit Russia with a raft of sanctions, prohibiting the import of oil, or other energy products and export of aluminium ores to the country.

Australian businesses and individuals are prohibited with dealing with Russian banks Sberbank, Gazprombank, VEB, VTB, Rosselkhozbank, Sovcombank, Novikombank, Alfa-Bank and Credit Bank of Moscow, covering almost 80 per cent of all banking assets.

“(Engage) is legally able to retain these staff members under these sanctions.” the company said in a statement this week.

At least 400 Western companies have pulled out of Russia and Belarus, since Vladimir Putin ordered Russian troops to attack Ukraine three weeks ago.

Ted Dhanik. Picture:engage:BDR

But the company’s chairman, Ted Dhanik, told The Australian that it was “not in any of these countries – we have contractors/engineers there”. “We are not ‘in’ Russia, Ukraine or Belarus – get your facts straight,” he wrote in an email responding to questions. “Seems you have it out for us.”

“We have no offices or revenue there,” Mr Dhanik said.

“The contractors have done nothing wrong, they are also against the war. They have been with us for many years.”

The outbreak of the conflict saw Engage scramble to relocate its employees in Ukraine to safety.

Engage had slated Ukraine as its rebuilding site after a torrid year, with plans to hire up to 60 people in the country and shed staff in the United States.

It had told the market its Ukrainian plan could cut staffing costs to “a fraction (10-20% of the current cost)”.

For the past two weeks, Engage had been moving remaining operations roles from Ukraine to “other parts of Europe,” the company told the market.

“Most team members across Ukraine have been relocated to Western Ukraine (which is the safest part of Ukraine, close to Poland and other parts of Europe).”

Engage previously said “three team members remain in conflict zones but are safe and their projects have been redistributed and management is assisting with their relocation currently.”

The company founded by Mr Dhanik, a former MySpace figure, recently said it would rebrand as colorTV, after what the chairman told The Australian was “a rough time on the ASX so far”.

Engage, which disclosed three quarters of funding left in a recent update, has been on a cash burn.

The company posted a 26 per cent slump in revenues to $11.4m for the year, pulling the business to a $3.8m operating loss.

Engage noted it “generated less revenue” in the year “due to customer technical issues which originated in August 2021”.

The company had earlier noted it had resolved the technical issues, but its “large client” then blocked all advertising in the gaming category which was the primary category of inventory”.

Engage shares traded at 0.1c.

Originally published as Engage:BDR defies the trend and continues working in Russia