Russia’s VimpelCom posts weak 1Q results

By bne IntelliNews May 13, 2015

VimpelCom, one of Russia’s "Big Three" telecommunication operators, reported its first quarter 2015 IFRS results on May 13, posting a revenues drop of 30% y/y, while EBITDA fell by 33% y/y, impacted by currency headwinds.

Excluding the effect of foreign currency movements, revenues and EBITDA decreased by 2% y/y and 6% y/y respectively. Net income reached $184mn, while UralSib analysts forecasted a net loss of $64mn. "The difference was not important as it reflected lower D&A and forex losses than we expected, as well as a gain from the sales of towers in Italy," the analysts said in a note.

The company's sales dropped by 30% y/y to $3.5bn. Service revenues were flat y/y in Russia and contracted by 5% in Italy, 11% in Algeria and 4% in Pakistan. The results, however, were offset by 10% revenue growth in Bangladesh and 5% growth in Ukraine. Mobile data revenues in Russia rose by 18% y/y.

Net debt decreased by 12% q/q to $17.6bn due to the ruble and euro weakening against the dollar and the proceeds from asset sales in Algeria sales and the sale of towers in Italy. Net debt/EBITDA ratio contracted to 2.4 from 2.5 at the end of 2014. Management confirmed its targets for the year, expecting revenues and EBITDA margin to remain flat.

"The results were largely in line with expectations and at least they did not contain any negative surprises," UralSib noted. "We reiterate our Hold recommendation on VimpelCom, and prefer MTS among Russian telecom names, as it has strong operating momentum and a lower debt load, and it offers an attractive dividend play."

Related Articles

Russia’s central bank reduces key rate in surprise decision

The Central Bank of Russia (CBR) reduced the key lending rate by 0.25 percentage points to 9.75% on March 24, despite broad market expectations of no change this month. The ruble strengthened to a ... more

Ex-Trump aide Manafort reported to be long-term Putin lobbyist

Paul Manafort, US President Donald Trump's former election campaign manager, struck a covert deal with Kremlin-affiliated Russian oligarch Oleg Deripaska in 2006 to promote the interests of President ... more

Russian central bank governor Nabiullina to be nominated for further five-year term

The governor of the Central Bank of Russia (CBR), Elvira Nabiullina, will be nominated for another five-year term, President Vladimir Putin told the country’s top banker on March 22. The nomination ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss