Despite CK Hutchison’s offer for O2 UK being rejected yesterday by the EC, VimpelCom expects its consolidation move with Hutch in Italy will go ahead “around the end of 2016″, subject to regulatory approvals.
VimpelCom and Hutch announced a proposed tie-up between their respective units, Wind Italy and 3 Italia, last summer. The deal is currently the subject of a Phase II review by the commission.
Like the failed UK deal, the Italian merger would reduce the number of competitors in the country from four to three.
Ahead of the commission’s verdict on the tie-up, the two operators will continue to run as independent operations, VimpelCom confirmed.
VimpelCom’s statement was in the company’s Q1 2016 results where, the company stated, Italy has been reclassified as an asset held for sale, in both the current and year-ago results.
Feeling the headwinds
The company saw its revenues slump 12 per cent to $2 billion compared to Q1 2015, although its performance was buffeted by adverse currency movements. Revenue increased four per cent organically. Pakistan, Bangladesh, Ukraine and Uzbekistan were all positive performers, VimpelCom said, partially offset by weakness in Kazakhstan. Net income in Q1 was $189 million, a three per cent increase over 2015.
“Although we still face currency headwinds and adverse economic conditions in some of our markets, there are signs of an easing in pressures, with the exception of Russia,” said CEO Jean-Yves Charlier.
Revenue in Russia, the group’s largest market, declined by 17 per cent in the quarter.
“Our strategy to profoundly transform VimpelCom is firmly on course, particularly in the areas of cost base transformation, streamlining our portfolio, and greater globalisation of our internal operations,” Charlier added.
He said the group remains on track to achieve its financial targets for the year.