Vimpelcom reports FY10 revenues of USD10.5 billion; mobile subscribers grow 43.5% to 92.7 million

30 Mar 2011

Russia-based telecoms group Vimpelcom has announced revenues of USD10.5 billion for the twelve months ended 31 December 2010. This figure represents an increase of 20.8% on 2009. Net income for the same period was USD1.7 billion, a rise of 4.5% year-on-year, while adjusted OIBDA was up 15.4% to USD4.9 billion. CAPEX for FY10 was reported as USD2.2 billion, or 19.2% of revenues. Alongside improved economic conditions in its markets, Vimpelcom credits growth to its consolidation of Kyvistar in Ukraine; the long-running deal, which saw Telenor and Altimo merge their respective 56.5% and 43.5% stakes in Kyivstar into the Vimpelcom group was finally approved by Ukraine’s Antimonopoly Committee (AMCU) in October 2010.

In operational terms Vimpelcom reported a consolidated mobile subscriber base of 92.7 million at the end of December 2010, up 43.5% year-on-year. Consolidated broadband subscribers increased 66.2%, to 3.8 million. The group’s domestic unit remains its largest operator in terms of subscribers, reporting 52.02 million subscribers at end-2010, a rise of 2.2%; during 2010 Russian 3G subscriptions grew 85.6% to 1.927 million. Newly consolidated Kyivstar saw its mobile subscriber base edge up 1.5% to 24.39 million. Meanwhile, in the CIS, all of Vimpelcom’s Beeline subsidiaries witnessed solid subscriber growth, with Kazakhstan continuing to spearhead operations, with 6.87 million subscribers (up 11.9% year-on-year). In Armenia Vimpelcom reported 672,000 subscribers (up 23.3%), including 7,000 3G customers, whilst Uzbekistan saw its customer base rise 37.2% to 4.82 million, including 25,500 3G subscriptions. Elsewhere Tajikistan reported 787,000 subscribers (up 5.9%), Georgia contributed 560,000 (up 40.4%) and Kyrgyzstan weighed in with 1.9 million customers. In South East Asia, Vimpelcom no longer consolidates its Vietnamese subsidiary’s subscriber figures into its financial reporting. However, the firm’s Cambodian unit contributed 650,000 users at end-2010, with the recently acquired Laotian operation credited with 520,000 at end-February 2011.

Alexander Izosimov, Vimpelcom CEO, commented: ‘The company showed a good set of results for the fourth quarter and full year of 2010, reporting substantial growth over the corresponding periods of 2009. Our results reflect improvements in macroeconomic conditions in our major markets, the consolidation of Kyivstar, as well as our efforts to drive further growth and improve the quality of our subscriber base. With annual revenues of more than USD10 billion, almost USD5 billion of OIBDA and USD1.7 billion of net income, we continue to maintain a strong financial position. Russia remains the focal point for us and we are implementing a comprehensive program aimed at accelerating our growth momentum in the robust and profitable Russian market. We continue to strengthen our competitive position and drive growth by prioritising network expansion, further developing our marketing capabilities and working on distribution optimisation and pricing efficiency. We have already begun to see the benefits of these efforts. Our Ukrainian business, after the consolidation of Kyivstar, delivered very good results as we regained market share, while sustaining our margins and cash flow generation ability. The synergies from integration have thus far exceeded our forecasts and overall we are happy with the development of our operations in Ukraine. Today, we stand at a defining moment for Vimpelcom. The combination with Wind Telecom, recently approved by our shareholders, will expand our growth platform and help to secure the advantages of greater scale and scope. Strategically, in a dynamic industry environment, we are now better positioned to capture additional growth as the industry focus shifts from voice to data. As we look ahead, we are confident this combination will be increasingly attractive for all our stakeholders and will unlock additional value within the next 24 months’.

Russia, Beeline (Russia), Kyivstar, VEON