Vimpelcom hails ‘solid’ results as 2Q profits climb 17%

7 Aug 2013

The Russia-based telecoms group Vimpelcom has reported what it calls ‘solid’ results for its second quarter to the end of June 2013, with net income up 17% to USD573 million, although sales dropped slightly year-on-year from USD5.75 billion to USD5.72 billion. Positive performances in its domestic market (up 3%) and the CIS (up 17%) were offset by slowdowns in Asia and Africa (down 5%). Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 2% to USD2.40 billion, with the company blaming the decline on negative currency effects, cuts to mobile termination rates (MTRs) in Italy, and one-off charges totalling USD43 million. EBITDA would have grown 3% excluding these factors, Vimpelcom said.

In operational terms, the overall worldwide mobile subscriber base climbed 5% over the previous twelve months to reach 215 million by end-June. The strongest performances were reported in CIS markets, including Uzbekistan where the operator benefited from the closure of a rival network. In addition, Vimpelcom said that overall customer growth was achieved despite the restating of subscriber totals in Algeria and the Ukraine, each of which knocked 1.4 million users from their respective country totals due to local changes in the classification of ‘active’ subscribers. The firm said that mobile data revenues continue to rise, with y-o-y growth of 37% being reported in both Russia and Italy.

Jo Lunder, chief executive officer at Vimpelcom, commented: ‘These are solid results in the context of increasing competitive intensity and regulatory pressures in several of our markets.’

Separately, Vimpelcom announced that it is to switch its US stock market listing from the New York Stock Exchange Euronext to NASDAQ Global Select Market. Trading on NASDAQ is expected to commence on 13 September 2013. Lunder noted: ‘There are many TMT (technology, media and telecoms) companies present on Nasdaq … and we think it is a natural step for Vimpelcom to be included into that very strong group of companies.’

Russia, VEON