Russian-backed telecoms group VimpelCom today announced its results for the quarter ended 31 March 2016, in which total group revenue decreased 12% year-on-year in reported currency to USD2.023 billion due to adverse foreign exchange movements, while revenue increased organically (local currency terms) by 4% y-o-y, driven by positive performance in Pakistan (Mobilink), Bangladesh (Banglalink), Ukraine (Kyivstar) and Uzbekistan (Beeline), partially offset by negative performance in Kazakhstan (Beeline). Service revenue increased 3% y-o-y organically, due to 27% mobile data revenue growth in local currencies. Total mobile customers decreased by 900,000 to 194 million at the end of Q1 2016, mainly due to the impact of regulation of the telecom industry in Pakistan, requiring operators to block unverified SIMs from 2Q15; excluding this effect, the group customer base would have grown by 4.7 million y-o-y.
In Russia, Beeline’s total revenue in 1Q16 was organically stable y-o-y as a reduction in fixed line service revenue was offset by growth in mobile service revenue and increased sales of equipment and accessories. Russian mobile service revenue increased 1% to RUB52.62 billion (USD802 million), driven by 19% growth in mobile data revenue to RUB12.2 billion and growing interconnect revenue, partially offset by decreasing voice turnover. Russian fixed line service revenue decreased by 11% to RUB10.9 billion mainly as a result of a change in B2B contracts from US dollar to ruble and a reduction in low-margin traffic. Beeline Russia’s mobile customer base expanded by 4% to 57.7 million y-o-y mainly as a result of enlarged sales through the Svyaznoy retail chain as well as an increased number of mono-brand stores.
In the VimpelCom ‘Emerging Markets’ reporting segment, total revenue increased organically 6% y-o-y in Q1 2016, driven by strong results in Bangladesh and Pakistan, while in Algeria (Djezzy) total revenue was organically stable. The reporting segment added 4.9 million customers y-o-y excluding the impact of unverified SIM blocking in Pakistan in 2Q15 – this wiped out 5.6 million customer accounts. Total revenue at Vimpelcom’s ‘Eurasia’ reporting segment increased organically 5% y-o-y in January-March 2016, mainly driven by service revenue growth in Ukraine and Uzbekistan, partially offset by a decline in service revenue in Kazakhstan.
Reported group EBITDA in 1Q16 declined by 19% y-o-y to USD758 million due to currency headwinds and exceptional items of USD40 million, excluding which, underlying EBITDA was USD799 million, an organic increase of 2% y-o-y. The exceptional items primarily relate to a group-wide performance transformation programme. Total CAPEX (excluding licences) in 1Q16 dropped 28% y-o-y to USD151 million. Net income attributable to VimpelCom shareholders was up 3% y-o-y in the quarter at USD189 million.