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Vimpelcom maintains outlook as Q2 revenues fall 11%

2014-08-06 09:11:00| Telecompaper Headlines

(Telecompaper) Vimpelcom reported second-quarter results lower, hurt by the difficult economic conditions in key markets such as Italy, Russia and Ukraine. Revenues fell 11 percent to USD 5.067 billion, and EBITDA was down 14 percent to USD 2.076 billion. On an organic basis, revenues fell 6 percent, with a 9 percent fall in Italy, Russia down 6 percent, Africa & Asia declining 4 percent and Ukraine 5 percent lower. Only the CIS region showed growth, with revenue up 4 percent year-on-year. Net profit plunged to USD 100 million from USD 573 million a year earlier, hurt by higher tax payments. Vimpelcom said it expects net profit to improve by USD 500 million this year due to lower interest payments after the refinancing of Wind and the sale of Djezzy in Algeria. The latter is still expected to close by year-end and the proceeds will be devoted to debt reduction. Net debt is expected to drop to 2.4 times EBITDA by year-end, from 2.6 at the end of June. Vimpelcom also maintained its outlook for a low to mid-single digit annual drop in revenue and EBITDA in 2014 and capital expenditure at 21 percent of revenue. In the first half of 2014, the company spent USD 1.743 billion on capital equipment up 26 percent from a year earlier, while operating cash flow fell over the same period by 29 percent to USD 2.421 billion. The company said the high investments are needed to support the growth in mobile data services. Mobile data revenue was up 19 percent year-on-year in Q2, while the total mobile customer base rose by 2 percent to 220.6 million. 

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Category:Telecommunications

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