Vimpelcom reported a small increase in organic sales and EBITDA in the third quarter, led by a strong performance in Ukraine and Pakistan. Excluding currency effects, disposals and acquisitions, revenues rose 0.8 percent and EBITDA was up 0.6 percent. On a reported basis, revenue fell 3 percent to USD 2.372 billion, hurt by forex effects and lower sales in Algeria and Russia.
Service revenue was also down 3 percent year-on-year, as the drop in voice revenue offset 28 percent growth in mobile data revenue. Total mobile customers increased by 10.1 million to 205.5 million at the end of Q3, mainly driven by the consolidation of Warid’s customers in Pakistan from July.
Group EBITDA, excluding one-time items, fell 5 percent to USD 962 million, and the margin dropped to 40.6 percent from 41.7 percent a year ago. The net result was a profit of USD 445 million, compared to a loss of USD 1.005 billion a year ago when Vimpelcom took a number of restructuring and legal settlement charges.
After trimming capital expenditure 15 percent to USD 382 million, Vimpelcom reported operating cash flow of USD 580 million, up 2 percent from a year earlier. Its net debt was up 25 percent year-on-year to USD 6.8 billion due to the consolidation of Warid's debt, and the leverage rose to 1.9x from 1.3x. The company declared an interim dividend of 3.5 cents a share, as earlier promised.
For 2016, Vimpelcom said it still expects to achieve the low end of its forecast. The outlook is for service revenue flat to a low single-digit organic increase, while the underlying EBITDA margin should be flat to 1 percentage point higher. Capex is expected to be around 17 percent of revenue.
