Support The Moscow Times!

VimpelCom Q3 Profit Up 185%

Telecom group VimpelCom, with assets in Russia, Italy and various emerging markets, said Wednesday that its third-quarter net profit nearly tripled year on year due to higher operating profit and foreign-exchange gains. That beat expectations.

Net profit totaled $538 million, the Amsterdam-registered group said in a statement, up 185 percent from a year ago and above the $521 million average forecast in a Reuters poll of analysts.

Consolidated revenue fell 6 percent to $5.75 billion, in line with forecasts, due mainly to weakness in almost all its operating currencies, including the ruble, against the dollar, VimpelCom's reporting currency.

Organic revenue growth, excluding the effect of foreign-currency movements, was 3 percent, as the company's total mobile subscriber base rose 7 percent to 212 million.

Earnings before interest, taxation, depreciation and amortization fell 2 percent to $2.53 billion, for a 44 percent margin, compared with the consensus forecasts of $2.51 billion and 43.7 percent, respectively.

The company also said it continued to see a positive trend in its core Russian market, where it ceded the number-two spot to rival MegaFon in 2010 while pursuing global expansion through a more than $6 billion deal for Egypt's Orascom Telecom and Italy's Wind.

In Russia, it reported 7 percent organic revenue growth for the third quarter, driven by mobile data, and an increase in its EBITDA margin from 40 percent a year ago to 43.2 percent as a result of its focus on profitability versus growth.

VimpelCom's largest shareholders are Altimo, the telecom arm of Russian billionaire Mikhail Fridman's Alfa-Group, and Norwegian telecom group Telenor.

Read more

The need for honest and objective information on Russia is more relevant now than ever before!

To keep our newsroom in Moscow running, we need your support.