VimpelCom Announces Fourth Quarter and Full Year 2009 Financial and Operating Results
18 Mar 2010
Moscow and New York (March 18, 2010) - Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) (NYSE: VIP), a leading international provider of telecommunications services operating in Russia, the Commonwealth of Independent States (CIS) and South-East Asia, today announced its operating and financial results for the quarter and year ended December 31, 2009.
The Company changed its reporting currency from the US dollar to the Russian ruble effective as of January 1, 2009. The Company presented certain financial information for the first three quarters of 2009 in Russian rubles.
Following the plans announced in October 2009 by the Company's two strategic shareholders to combine their holdings under a new company, VimpelCom Ltd., and in connection with regulatory filings relating to that transaction, the Company decided to change its reporting currency to the US dollar. The audited consolidated financial statements for the year ended December 31, 2009 are prepared in US dollars. Amounts included in quarterly financial statements for the first three quarters of 2009 were recast using the current rate method of currency translation as though the US dollar was the reporting currency in those periods. Financial information in this press release is presented in US dollars for the consolidated Group and in functional currencies for Russia and the CIS countries.
Although Georgia is no longer a member of the CIS, consistent with our historical reporting practice we continue to include Georgia in our CIS reporting segment.
2009 Highlights and Recent Developments
Operational
• 3.6 million new mobile subscribers, with the total subscriber base up to 64.6 million
• 2.3 million broadband subscribers, an 85% growth year-on-year
• 3G networks rollout in Russia on schedule, all current license requirements fulfilled
• Launch of operations in Cambodia and Vietnam under Beeline brand
Financial
• Revenues of US $8.7 billion and OIBDA* of US $4.3 billion, 14% and 12% down year-on-year, respectively. In ruble terms, revenues of 275.2 billion and OIBDA of 135.2 billion, 10% and 12% increase year-on-year
• Full-year consolidated ruble revenues in Russia increased 10% year-on-year and reached 235.4 billion rubles
• Substantially improved consolidated fixed and mobile margin of 49.1% compared to 48.0% in 2008
• Free cash flow amounted to US $2.7 billion after US $0.8 billion spent on Capex
• Net income attributable to VimpelCom of US $1.1 billion or 114% increase year-on-year
• Basic EPS up 110% year-on-year to US $21.71 ($1.09 per ADS)
• Net debt decreased to US $5.9 billion bringing the Net Debt/OIBDA ratio to 1.4
Other
• Interim dividend of US $0.32 per ADS was paid out
• Strategic shareholders initiated the process of combining their stakes in VimpelCom and Kyivstar in a new company, VimpelCom Ltd., and launched a public exchange offer for all of VimpelCom’s outstanding shares
_____________
*Here and thereafter refers to adjusted OIBDA (See definition)
Commenting on the performance of the Company, Boris Nemsic, Chief Executive Officer of VimpelCom, said, “By the end of 2008, in the depths of the global macroeconomic crisis, we took decisive actions to address the market uncertainties. We committed to our shareholders that we would preserve cash, improve liquidity, control costs, and integrate the newly acquired fixed-line business, all while maintaining our leading market positions. I am very pleased that we have delivered on each of these commitments, which is clearly demonstrated by our full-year results.
The growth in our mobile subscriber base to over 64.6 million customers was good especially in light of the high penetration in our markets. Moreover, subscriber growth did not come at the expense of subscriber quality and profitability, as we improved our consolidated fixed and mobile OIBDA margins to more than 49% on average for the year. Furthermore, our focus on operational excellence and profitability resulted in a record US $3.5 billion of operational cash flow, allowing us to substantially improve our liquidity and pay dividends. We paid out a dividend of US $0.32 per ADS based on the Company’s operating results for the first nine months of 2009, while substantially reducing our net debt to a comfortably manageable US $5.9 billion, a 22% reduction compared to December 31, 2008.
Finally, our strategic shareholders recently took another important step toward positioning VimpelCom as a global player in the telecommunications industry by launching an exchange offer through VimpelCom Ltd., which if completed, will combine VimpelCom with Kyivstar, the largest mobile operator in Ukraine. We believe that this transaction will support our strategic objectives and create value for the Company’s stakeholders. The Company’s Board of Directors unanimously recommended that the Company’s shareholders and holders of American depositary shares exchange their Company shares and ADSs for VimpelCom Ltd. depositary shares in the exchange offer launched by VimpelCom Ltd”.
|
