Vimpelcom posts USD 1 bln loss in Q3 on Uzbekistan provision

Vimpelcom reported a net loss of USD 1.005 billion for the third quarter, versus a profit of USD 105 million a year earlier, due to a provision of USD 900 million for possible damages from the pending investigation into its Uzbekistan activities. Underlying results were also under pressure from negative currency effects and difficult economic conditions in some of the Russian company's markets. Revenues fell 31 percent to USD 2.442 billion, and EBITDA was down 96 percent to USD 58 million. 

On an organic basis excluding currency effects, Vimpelcom said revenues were up 2 percent, while EBITDA excluding one-time items was down just 1 percent. The new CEO Jean-Yves Charlier said the company was sticking to its financial targets as the transformation programme started earlier this year makes progress. The company will give more details on its strategy at the full-year results penetration next year, he said. 

For 2015, Vimpelcom forecasts service revenue flat to a single-digit decline, the underlying EBITDA margin flat to minus 1 percent point, and capital expenditure excluding licence fees at 18-20 percent of revenue. In the first nine months of the year, service revenue was flat, the underlying EBITDA margin fell 1.2 percent points to 41.3 percent, and capital expenditure nearly halved to USD 1.137 billion, or 15.5 percent of revenue. Operating cash flow in the nine months was down 23 percent year-on-year to USD 1.887 billion, but Vimpelcom said it will pay a dividend of USD 0.035 per share in December.

Vimpelcom ended September with a total 195.3 million mobile customers, down 1 percent from a year earlier.