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VimpelCom posts 3Q 2010 net income of $495.9 million

VimpelCom posts 3Q 2010 net income of $495.9 million
Russian mobile operator, VimpelCom, has posted a 3Q 2010 net income of $495.9 million under US GAAP.

The 3Q bottom line is up is up 14.1% year on year, with 3Q adjusted OIBDA rising 20% year on year to $1.377 billion, as 3Q net operating revenues rose 24.1% year on year to $2.824 billion.

The company noted that mobile subscriptions had jumped 40.7% year on year to 92 million subscribers, with broadband internet subscribers climbing 58% to 3.1 million.

VimpelCom’s CEO, Alexander Izosimov was positive about the net result, with the consolidation of Kyivstar helping to offset a weakening of its market position in Russia.

“Our third quarter results reflect the macroeconomic situation in the countries where we operate, consolidation of Kyivstar and seasonal effects typical for the summer period. Our quarterly revenues reached $2.8 billion, while the OIBDA margin remained in the high 40’s. Our focus on profitability and cash flow generation helped to substantially increase net income, while keeping ROCE above 20%. The strength of our cash flows allowed us to declare a sizeable interim dividend of $600 million." 

The company noted its competitive position in Russia had deteriorated due to underinvestment in the preceding year and a half seeing erosion of its customer base, and growth rates less than competitors.  Izosimov stated that addressing this would be a clear focus for VimpelCom management in the coming months.

“However, while scale is an important strength in a rapidly evolving telecom industry, it is critical to sustain competitive positions in the core markets. We are clearly dissatisfied with our recent loss of market share in the Russian mobile market. The new management team in Russia already started to implement a set of measures to regain momentum in our business development. This includes prioritized network expansion, distribution optimization and pricing efficiency with focused plans for each region, to strengthen and facilitate the development of our business. We understand that our strategy requires certain time, strong focus on execution and resources, but we are confident that VimpelCom will restore its market position.“