Netherlands based VimpelCom Ltd., a prominent global provider of telecommunications services, announced financial and operating results for the quarter ended September 30, 2015. These results and the last year numbers reveal the reclassification of Italy as an asset held for sale. VimpleCom stated a net loss of USD 1,005 million, including exceptional items of USD 1,196 million.
Jean-Yves Charlier, Chief Executive Officer, commented:
“The improving operating momentum that we have seen in 2015 has continued into 3Q15 with the company generating an organic YoY increase in service revenue for the quarter of 0.7%, while underlying EBITDA was broadly stable. At the same time however, our reported revenue and EBITDA continue to be impacted by adverse currency movements and the Group also recorded a net loss of approximately USD 1 billion which reflects exceptional costs of USD 1,196 million, the principal component of which is a provision ofUSD 900 million in connection with the investigations by the SEC, DOJ and OM relating to our business in Uzbekistan. Our new transformation program is already demonstrating progress and continues to move forward with focus and I am pleased to confirm our key targets for 2015. I look forward to providing an update to the market at our FY15 results on the progress we are making on the Strategic Update provided earlier this year.”
VimpelCom Reports Net Loss, Good Operational Momentum
VimpelCom has assumed a new regional structure. The updated Company structure consists of four strategic regions, including two newly formed groupings: Russia; Emerging Markets, which includes Algeria, Bangladesh and Pakistan; Eurasia, includes the Eurasian operations as well as Kazakhstan and Ukraine; and Italy, which is accounted for discontinued operations after the Italian joint venture announcement on August 6, 2015.
Telenor announced its intention to sell all of its shares in VimpelCom and does not intend to convert its preferred shares into common shares. Telenor has been a long-standing and highly supportive shareholder for many years, helping to build VimpelCom’s business.
Total Group revenue growth in 3Q15, increased organically 2% YoY to USD 2.4 billion, compelled by progressive performance in Pakistan, Bangladesh, Ukraine, Kyrgyzstan and Uzbekistan. Total mobile customers decreased 1.3 million YoY to 196 million by the end of 3Q15, mostly due to the impact of regulation for the telecom industry in Pakistan, requiring operators to block unverified SIMs in 2Q15. In Russia, total revenue organically declined 1% YoY as a result of a reduction in fixed-line service revenue, partly offset by growth in mobile service revenue.
Emerging markets showed strong organic EBITDA growth and showed strong organic recovery in 3Q15. Excluding the impact of unverified SIMs blocking in Pakistan in 2Q15, emerging markets showed strong customer growth. Data usage continued to increase significantly up to 94% YoY led by the adoption of 3G.
In the third quarter, VimpelCom recognized outstanding items totaling USD 1,196 million. These include USD 916 million of provisions for investigations and other legal costs .
Loss from discontinued operations was USD 123 million in 3Q15, improving YoY compared to the loss of USD 208 million in 3Q14. Net loss attributable to VimpelCom shareholders was USD 1,005 million, largely as a result of the exceptional items aggregating toUSD 1,196 million. Net debt decreased 70% QoQ in 3Q15 to USD 5.4 billion mainly due to the reclassification of Italy as an asset held for sale.
The Company will sustain its tactic to capitalize in high-speed data networks to capture mobile data growth, counting the continued roll-out of 4G/LTE networks in Russia, Italy and Georgia, as well as 3G networks in Algeria,Pakistan, Bangladesh and Ukraine.