Vimpelcom's profit up; Kyivstar merger given Ukrainian anti-trust approval

19 Mar 2010

Russian mobile group Vimpelcom has posted net profit of USD1.12 billion for the full year 2009, up from USD524 million a year earlier despite a 14% drop in revenues. Company CEO Boris Nemsic commented: ‘By the end of 2008, in the depths of the global macroeconomic crisis, we took decisive actions to address the market uncertainties. We committed to our shareholders that we would preserve cash, improve liquidity, control costs, and integrate the newly acquired fixed-line business, all while maintaining our leading market positions. I am very pleased that we have delivered on each of these commitments, which is clearly demonstrated by our full year results.’ Revenues totalled USD8.7 billion in the year ended 31 December 2009, while operating income before depreciation and amortisation (OIBDA) fell 12% year-on-year to USD4.27 billion. The group ended 2009 with a consolidated mobile customer base of 64.59 million, up from 61.03 million a year earlier, while the company’s broadband operation grew by 85% over the twelve-month period, ending the year with 2.26 million subscribers.

Meanwhile, Vimpelcom has been further boosted by the news that the Antimonopoly Committee of Ukraine (AMCU) has approved plans to merge the Russian company with Ukraine’s largest cellco Kyivstar. As reported by CommsUpdate on 4 February 2010, Russia’s Commission on Foreign Investments has already granted its consent for the deal, Vimpelcom will now hold a share offer to acquire all the shares of Kyivstar before re-establishing itself in the Netherlands as a US-listed international operator. The company plans to complete the merger in mid-2010. Kyivstar is currently owned by Telenor (56.5%) and Alfa Group (43.5%), which are also Vimpelcom’s two largest shareholders. Vimpelcom also wholly owns another Ukrainian mobile operator, Beeline Ukraine (formerly Ukrainian Radio Systems), which includes fixed line and broadband division Golden Telecom (now also operating under the Beeline banner).

Russia, Beeline (Russia), Kyivstar, Telenor Group, VEON