Vimpelcom Group Q3 revenues plummet 53% y-o-y amid higher tax expenses

6 Nov 2013

Amsterdam-based telecoms group Vimpelcom has announced revenues of USD5.685 billion for the three months ended 30 September 2013, down 1% from USD5.747 billion one year earlier. EBITDA for 3Q13 dropped 2% from USD2.530 billion to USD2.474 billion, while net income was reported at USD255 million, an decrease of 53% year-on-year. The company says that the sharp decrease in net income was mainly due to lower profit before tax and higher tax expenses. The latter are due to a deferred tax provision related to planned, future intragroup dividends. CAPEX totalled USD1.04 billion in 3Q13 (up 25% y-o-y), reflecting the continued rollout of the mobile networks in Russia, Bangladesh and the CIS, as well as the continued rollout of HSPA+ and backbone capacity to support data growth in Italy and acquisition of 3G licence in Bangladesh. Due to increased investments in Russia, the company expects FY13 CAPEX – excluding licences – to be approximately 20% of revenue.

Vimpelcom’s ‘Russia’ business unit weighed in with the lion’s share of Q3 revenues, at USD2.298 billion, albeit down 1% y-o-y. Elsewhere, revenues remained stable in Italy, which posted sales of USD1.657 billion in the third quarter, down slightly from USD1.662 billion y-o-y. The ‘Africa & Asia’ business saw sales drop 4% to USD869 million on an annualised basis, while revenues in ‘Ukraine’ dropped 7% to USD420 million. The ‘CIS’ business unit was the only one to see its sales increase over twelve months, with a rise of 7% to USD513 million. In operational terms, Vimpelcom reported a consolidated mobile subscriber base of 219 million users as at 30 September 2013, up 5% from 209 million one year earlier.

Vimpelcom CEO Jo Lunder commented: ‘The third quarter results were impacted by regulatory and competitive pressures. Our underlying performance was stable and the operational improvements we are making in Russia are on track, with mobile service revenue growth of 3%. To better serve our customers, we plan further substantial investment in our mobile data networks in Russia in the final quarter of the year. In Italy, we have continued to gain mobile market share although competition remains strong. The Africa & Asia business unit delivered stable EBITDA and continuing strong subscriber growth. In Ukraine, we experienced significant pressure on our results and we are taking measures to improve our performance. The CIS business unit showed organic revenue growth of 9% and a substantial increase in the customer base’.

Russia, VEON