Tuesday, May 15, 2012

Vimplecom Loses Subscribers in Russia as it Targets Profitable Growth

Vimplecom reported Q1 2012 revenue of US$5.619 billion, up 3% over a year earlier, and net income of US$318 million, down 29% over last year.

"The benefits of executing on our strategy can be seen across our businesses: in Russia, our focus on profitable growth has delivered a strong organic increase of 9% in EBITDA and 11% in revenues. In the Africa & Asia business unit organic revenues rose by 9%, with a particularly strong contribution from Pakistan. In Italy we again gained market share, outperforming our competitors and our Ukraine and our CIS business units delivered solid revenue increases," stated Jo Lunder, CEO of Vimplecom.

Some highlights:

In Russia, revenue growth was 11%.

In Italy, revenues were flat YoY and EBITDA declined 2%. However, mobile subscriptions were up 4%, fixed voice up 3% and fixed broadband up 9% YoY.

The total mobile subscriber base increased 12% YoY to 209 million at the end of the first quarter. The largest absolute contribution came from accelerated growth in subscribers in the Africa & Asia Business Unit. The Company also achieved strong growth in fixed and mobile broadband subscribers in Russia, Italy and Ukraine.

Overall mobile subscribers in Russia declined in the first quarter 2012 compared to the fourth quarter of 2011, which benefited from extensive pre-holiday sales. Mobile broadband subscribers in Russia increased 12% YoY to 2.6 million, while the Fixed broadband subscriber base reached over 2 million, up 42% YoY. Overall, organic revenue growth in Russia was strong at 11% YoY.

Vimplecom is still seeking an amicable resolution with the Algerian government.

Vimplecom has sold its 49% controlling interest in GTEL Mobile in Vietnam.

CAPEX in Q1 was US$632 million, compared with US$729 million proforma a year earlier. 

  • In March, an Algerian Court handed down a judgment against Orascom Telecom Algerie (“OTA”) and a member of OTA’s senior executive team. The judgment relates to a previously disclosed claim brought in 2010 by the Algerian authorities alleging breaches of foreign exchange regulations. The judgment consists of fines of 99 billion Algerian Dinar (approximately USD 1.3 billion) and a criminal sentence against a member of OTA’s senior executive team.

See also