VimpelCom Announces First Quarter 2009 Financial and Operating Results
28 May 2009
Moscow and New York (May 28, 2009) - Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) (NYSE: VIP), the leading provider of telecommunications services in Russia and the Commonwealth of Independent States (CIS), today announced its financial and operating results for the quarter ended March 31, 2009.
First Quarter 2009 Financial and Operating Highlights
• Net operating revenues reached 66.8 billion Russian rubles*, an increase of 30.7% versus 1Q08 and a decrease of 4.1% versus 4Q08.
• OIBDA reached 32.2 billion rubles, an increase of 5.0% versus 4Q08.
• Consolidated OIBDA margin improved to 48.1% from 44.0% reported in the 4Q08.
• Operating income reached 19.3 billion rubles, an increase of 239.5% versus 4Q08.
• Net loss amounted to 8.5 billion rubles due to a 23.6 billion ruble foreign exchange loss.
• Mobile subscribers increased by 1.7 million versus 4Q08, reaching 62.7 million.
Commenting on the performance of the Company, Boris Nemsic, Chief Executive Officer of VimpelCom, said, “During the first quarter of 2009 the economies of Russia and the CIS countries went through a period of intense macroeconomic turmoil with a significant decline in overall business confidence, rapid currency devaluations, a drop in industrial production and rising unemployment. Despite the unfavorable macroeconomic conditions and usual seasonal slowdown, we managed to deliver strong quarterly results with revenues of 66.8 billion rubles and OIBDA of 32.2 billion rubles with a healthy OIBDA margin of over 48%. The relatively minor impact of the economic environment on the operational side of our business reconfirms our belief in the resilience of the telecom industry.
During the quarter we increased the number of active mobile subscribers from 61.0 million to 62.7 million. Our residential broadband business grew ahead of our initial expectations. In the fixed-line corporate segment we observed good performance with revenues increasing by 5% quarter-on-quarter.
The set of measures that we implemented at the beginning of the macroeconomic uncertainty has started to bear fruit. Integration synergies and a focus on cost-control, coupled with the usual seasonal effect, yielded a consolidated OIBDA margin of over 48%, a 5% increase in OIBDA quarter-on-quarter.
Our cash flow from operations increased by 34% over the previous quarter and amounted to 28.0 billion rubles, which equals US$826 million at the average exchange rate of 33.93 RUR/USD. Looking forward we think that the most recent macroeconomic developments, if maintained, give us reason for cautious optimism”.
* In order to align the reporting currency with the predominant functional currency of the Company and simplify comparative performance analysis the Company has decided to change its reporting currency to the Russian ruble.
The RUR/USD exchange rate at the end of 1Q2009 was 34.01 and the average rate for the quarter ended March 31, 2009 was 33.93, the RUR/USD exchange rate at the end of 4Q2008 was 29.38 and the average rate for the quarter ended December 31, 2008 was 27.27.
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