Vimpelcom 3Q14 revenues drop 9%; net income slumps 59%

12 Nov 2014

Amsterdam-based telecoms group Vimpelcom Ltd has announced revenues of USD5.145 billion for the three months ended 30 September 2014, down 9% from USD5.685 billion one year earlier. EBITDA for 3Q14 dropped 12% from USD5.477 billion to USD4.847 billion, while net income was reported at USD104 million, a decrease of 59% year-on-year, from USD255 million. In operational terms Vimpelcom’s consolidated subscriber base increased 2% from 218.4 million to 223.4 million by 30 September.

The company notes that its top line figure in 3Q14 was negatively impacted by performance and the macro-economic slowdown in Russia, Ukraine and Pakistan, the rolling effect from the 2013 price competition in Italy, and the delayed 3G launch in Algeria. Meanwhile, the weak bottom line was primarily the result of one-off costs related to the Wind Italy refinancing, which was completed in July 2014, the decline in operational performance and the depreciation of the Russian ruble (RUB), the Ukrainian hryvnia (UAH) and the euro (EUR) against the US dollar (USD).

Vimpelcom CEO Jo Lunder commented: ‘Our year-on-year revenue and EBITDA performance was impacted by macro-economic challenges, foreign currency movements and our operational performance in some markets … Our transformation programmes in Russia, Ukraine and Pakistan are on track and those in both Bangladesh and Kazakhstan have delivered strong results. Italy remains a weak market but we see an improving trend, with Wind delivering yet another solid set of results. We are on track to close the transaction in Algeria by the end of 2014, which with the refinancing of Wind Italy’s debt is expected to yield total annualised interest savings of approximately USD700 million. Our cash flows remain robust and with an improved debt maturity schedule with no major refinancing obligations until 2020 and our strong liquidity position, Vimpelcom is well funded.’

Russia, VEON