Vimpelcom Beats Q3 Forecasts As Earnings Triple

Telecoms group Vimpelcom, with assets in Russia, Italy and various emerging markets, said on Wednesday its third-quarter net profit nearly tripled, year-on-year, due to higher operating profit and forex gains, beating expectations.

Net profit totalled $538 million, the Amsterdam-registered group said in a statement, up 185 percent from a year ago and above a $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 Russian rouble, 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 by 7 percent to 212 million.

Earnings before interest, taxation, depreciation and amortisation fell 2 percent to $2.53 billion for a 44 percent margin, compared to 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 a 7 percent organic revenue growth for the third quarter, driven by mobile data, and an increase in its EBITDA margin to 43.2 percent from 40 percent a year ago as a result of its focus on profitability versus growth.

Vimpelcom’s largest shareholders are Altimo, the telecoms arm of Russian billionaire Mikhail Fridman’s Alfa-Group, and Norwegian telecoms group Telenor.

 
Reuters