Cellular company VimpelCom said Wednesday that it swung to profit in the first quarter as the economy rebounded.
Net income was $392 million, compared with a net loss of $297 million in the same period last year, VimpelCom said in a statement. Sales gained 13 percent to $2.23 billion.
VimpelCom Ltd., the new Amsterdam-based company that controls the Moscow-based operator and Ukraine's Kyivstar, had profit of $412 million in the period on sales of $2.54 billion.
Gains were fueled "by the consolidation of Kyivstar, appreciation of the ruble and some recovery in mobile spending," Ivan Kim, an analyst at Renaissance Capital, wrote in a note to investors. Kim has a "buy" rating on the New York-listed VimpelCom Ltd.
Operating income before depreciation and amortization, a gauge of profitability, rose 11 percent to $1.05 billion for VimpelCom.
Telenor of Norway and billionaire Mikhail Fridman's Alfa Group agreed in October to combine their stakes in VimpelCom and Kyivstar to end years of wrangling over control of the two operators. VimpelCom chief executive Boris Nemsic said Feb. 16 that the tie-up would make it easier to enter new markets via acquisitions.
VimpelCom will pay about $19.11 per American Depositary Receipt not tendered in the group’s U.S. offer, the company said in an e-mailed statement.
The operator received acceptances representing 15.4 million shares, or 97.87 percent of the stock, last month, clearing the way for the merger. The remaining 2.13 percent of shares that were not tendered will be subject to a “squeeze-out,” whereby shareholders will have to accept a lower price for their stakes, the company said.
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