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Vimpelcom results under pressure from regulation, forex
2013-08-07 09:10:00| Telecompaper Headlines
(Telecompaper) Vimpelcom reported second-quarter revenues stable and a small drop in EBITDA, as growth in its home market Russia was offset by a difficult Italian market and slowdown in Africa and Asia. Revenues were largely unchanged year-on-year at USD 5.72 billion, hurt by negative currency effects. EBITDA dropped 2 percent to USD 2.43 billion, and the margin fell to 42.4 percent from 43.2 a year ago. The company blamed the lower result on the termination rate cuts in Italy, tighter VoIP controls in Bangladesh and one-off charges of USD 43 million, relating to a settlement, restructuring charges, a fine in Pakistan and M&A costs. Underlying EBITDA growth, excluding these effects, would have been 3 percent. Net profit was still up 17 percent to USD 573 million, and operating cash flow improved 3 percent to USD 1.39 billion, after a 23 percent reduction in capex. Vimpelcom said capex will catch up in the second half on spending in Russia and possibly Algeria, to 20 percent of revenue from 17 percent in H1. The higher cash flow helped reduce net debt slightly, to 2.3 times EBITDA. The company said it was on track to meet its medium-term targets, despite headwinds from government and regulatory measures. It also confirmed it is renewing its options for the Canadian market and considering a sale of Wind Mobile, rather than increasing its stake in the operator.
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Category:Telecommunications