Vimpelcom reported 2015 results in line with its outlook and forecast a slight better performance in 2016. The company's revenue was down 1 percent and service revenue flat on an organic basis, and the EBITDA margin fell 0.8 percent points to 40.8 percent in 2015. In 2016, Vimpelcom also expects service revenue flat to a low single-digit organic increase, while the underlying EBITDA margin should be flat to 1 percentage point higher. Vimpelcom expects to benefit this year from cost savings from its planned mergers in Italy and Pakistan as well as increased infrastructure sharing in countries such as Russia.
In the fourth quarter, the company said it saw improvement in some markets. While reported revenue was still down 23 percent year-on-year to USD 2.30 billion due to negative currency effects, organic revenue growth was 1 percent. Adjusted EBITDA fell 22 percent to USD 898 million, but was up 5 percent on an organic basis, and the margin rose to 39.0 percent from 38.4 a year ago. The net result improved to a profit of USD 21 million from a loss of USD 890 million in Q4 2014.
Vimpelcom reduced capital expenditure by 38 percent in 2015 to USD 1.75 billion, while operating cash flow was still down 22 percent to USD 21.7 billion. Capex is expected at 17-18 percent of revenue in 2016, versus 18 percent last year. Net debt was reduced by 18 percent to USD 5.5 billion at year-end. That's equal to 1.5 times EBITDA, and Vimpelcom said this may increase to around 2x in 2016.
The company also announced that it's in talks with authorities in the US and Netherlands on a possible settlement to the investigation into corruption at its Uzbekistan activities. The proposal would see the company acknowledge certain violations of the US Foreign Corrupt Practices Act and relevant Dutch laws and pay fines to the SEC, DOJ and OM. Vimpelcom said the financial penalties would be covered by its earlier provision for the investigation.
