Amsterdam-headquartered VimpelCom – which has operations in Russia, Italy and a number of emerging markets – suffered a 59 per cent fall in net profit for Q3 due to one-off costs from debt refinancing at its Italian unit, a weaker rouble and “macro-economic challenges” from Russia and Ukraine. However, the operator talked up strong mobile data revenue and subscription growth.
VimpelCom reported net income of $104 million, down from $255 million a year ago, pointing the finger of blame at “one-off costs related to the recent refinancing of Wind and unfavourable forex.”
Revenue fell 9 per cent to $5.15 billion.
Without taking into account the effect of the rouble weakening and of disposals, revenue and EBITDA fell 3 percent and 4 percent respectively, the company added.
Its mobile customer base increased by 5 million (2 percent) from the year-ago period to 223.4 million and it claimed strong mobile data revenue growth of 21 per cent year-on-year driven by increased demand for mobile data services.
According to GSMA Intelligence, VimpelCom is the world’s ninth-largest operator group based on aggregated connections and revenue as of end Q2 2014. Since that time the company has offloaded its stake in Canadian operator Wind Mobile and sold its interests in operations in Burundi and Central Africa Republic.
The operator, co-owned by Norway’s Telenor, is seeking to reduce its $27.7 billion debt, which resulted from acquisitions of Egyptian billionaire Naguib Sawiris’s assets about three years ago.
“Our transformation programs in Russia, Ukraine and Pakistan are on track and those in both Bangladesh and Kazakhstan have delivered strong results,” noted CEO Jo Lunder (pictured) in a statement. “Italy remains a weak market but we see an improving trend, with Wind delivering yet another solid set of results. We are on track to close the transaction in Algeria by the end of 2014, which with the refinancing of Wind Italy’s debt is expected to yield total annualised interest savings of approximately $0.7 billion.”
VimpelCom confirmed in a statement its earlier forecast for “low to mid single digit” declines in sales and EBITDA in the whole of 2014 and announced a proposed dividend of 3.5 US cents per share.