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Vimpelcom sales down 9% in Q3, net profit halves

Vimpelcom sales down 9% in Q3, net profit halves

Vimpelcom’s net profit more than halved in the third quarter, to USD 104 million from USD 255 million a year ago, due to costs for refinancing its Italian subsidiary Wind and negative currency effects. EBITDA declined 11 percent to USD 2.21 billion, and revenues fell 9 percent to USD 5.15 billion. 

On an organic basis, revenues fell 3 percent in Russia, 6 percent in Ukraine, 2 percent in Italy and 4 percent in its Asia and Africa division. Only the CIS division showed growth of 5 percent. Vimpelcom said the operating results were affected by macroeconomic weakness, currency fluctuations and operational problems in some markets. Its transformation programs in Russia, Ukraine and Pakistan are on track and those in Bangladesh and Kazakhstan are already delivering results. While Italy remains a weak market, the company said it sees an improving trend at Wind. 

Following the Wind refinancing and the expected closing of the sale of the Algerian operations by year-end, the group expects to reduce annual interest charges by USD 0.7 billion. The operator’s capex was up 4 percent year-on-year to USD 964 million in Q3 excluding licence payments, while operating cash flow fell 4 percent to USD 1.61 billion. Net debt fell 6 percent compared to Q2 to USD 21.74 billion, or 2.5 times annual EBITDA.  

Vimpelcom maintained its target for net debt at 2.4 times EBITDA by year-end and a low to mid single-digit decline in revenues and EBITDA this year. Capex is expected to accelerate in the last quarter to reach 21 percent of revenue (excluding licences), compared to 18 percent in the first nine months. The company also confirmed an interim dividend of 3.5 cents per share. 

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