Vimpelcom's Q3 sales boosted by Kyivstar; confident of completing Orascom deal in 1H 2011

3 Dec 2010

Russia-based telecoms group Vimpelcom has announced revenues of USD2.82 billion for the three months ended 30 September 2010. This figure represents an increase of 24.1% from USD2.28 billion one year earlier. Net income for the same period grew from USD434.5 million to USD495.9 million, a rise of 14.1%, while adjusted OIBDA was up 20% to USD1.38 billion. CAPEX more than tripled, up to USD520.1 million, as the firm returned to its normal investment profile.

The group’s domestic unit saw revenues increase 7.5% to USD2.1 billion. In Ukraine revenues grew 652.7% to USD426 million, mainly due to the consolidation of Kyivstar. In operational terms Vimpelcom recorded 92 million mobile subscribers as at 30 September, a rise of 40.7% year-on-year. Meanwhile, the group saw fixed broadband subscriber figures increase 58.8% to 3.1 million.

Alexander Izosimov, Vimpelcom’s CEO commented: ‘Our third quarter results reflect the macroeconomic situation in the countries where we operate, consolidation of Kyivstar and seasonal effects typical for the summer period. Our focus on profitability and cash flow generation helped to substantially increase net income. Our increased scale and financial strength position us well to capture opportunities and strategic benefits of industry consolidation. Our recently announced agreement with Weather Investments [to take over the Egyptian-owned holding company’s controlling stake in international mobile group Orascom Telecom and Italian telco Wind] is a significant step in this direction. Given the size and complexity of the transaction, we are satisfied with the progress made thus far. We remain committed and continue to move forward as outlined in our 4 October announcement. We are working towards fulfilling all necessary conditions precedent, including obtaining approval of Vimpelcom’s Supervisory Board and securing the necessary regulatory approvals and anticipate the closing in the first half of 2011 [having missed an original early-December deadline]’.