Vimpelcom cuts CAPEX; net income doubles

28 Aug 2009

Russian mobile group Vimpelcom has posted a 103% year-on-year increase in consolidated group net income for the three months ended 30 June 2009, up to RUB22.59 billion (USD712 million) compared to RUB11.1 billion in the same period a year earlier. While revenues grew to RUB69.04 billion in the quarter, up from RUB61.68 billion in 2Q08, rising income can also be attributed to the 68% drop in capital expenditure (CAPEX), down to RUB5.03 billion at the end of June 2009 from RUB15.69 billion in 2008. It should be noted, however, that CAPEX for FY08 was USD2.57 billion, up from USD1.77 billion in 2007, indicating that lower CAPEX in 2009 is not necessarily a sign of cost-cutting. Operating income before depreciation and amortisation (OIBDA) for the quarter was RUB34.96 billion, a RUB6.07 billion year-on-year growth. Boris Nemsic, CEO of VimpelCom, said: ‘We are pleased with our performance during the second quarter. In spite of the economic crisis we achieved 12% year-on-year growth in revenue and 21% year-on-year growth in OIBDA… We had a modest increase in CAPEX compared to the first quarter of 2009. In line with our initial expectations we plan to increase CAPEX in the second half of the year to ensure the sustainability of our business and to capture growth opportunities going forward.’

Vimpelcom attracted 9.97 million net new customers to its mobile operations over the year, ending June 2009 with a total cellular customer base of 63.68 million. The company ended 2Q09 with 1.71 million broadband customers, up from 617,000 a year earlier.

Russia, Beeline (Russia), VEON