VimpelCom US GAAP Net Profit Up 75% in 2005
MOSCOW, April 18 (Prime-Tass) -- The net profit of Russia?s second largest mobile operator VimpelCom increased 75.6% on the year to US$615.131 million in 2005 as calculated under U.S. GAAP, the company said in a press release Tuesday.
The company's net profit in October-December 2005 soared 81.2% on the year to $151.748 million, VimpelCom said.
Operating revenue increased 52.0% on the year to $3.211 billion in 2005, the company said, adding that in October-December 2005 operating revenue rose 45.7% on the year to $910.421 million.
OIBDA, or operating income before depreciation and amortization, rose 53.0% on the year to $1.571 billion in 2005, VimpelCom said. OIBDA rose 47.6% on the year to $419.692 million in October-December. The OIBDA margin rose to 48.9% in 2005 from 48.6% in 2004, while the margin increased to 46.1% in October-December 2005 from 45.5% in October-December 2004.
The monthly average revenue per user (ARPU) fell 25.7% on the year in 2005 to $7.5, VimpelCom said. ARPU stood at $7.1 in October-December, down 21.1% on the year, the company said.
The company attributed the boost in financials to "continued subscriber growth combined with the effects of economies of scale, stable ARPU in the course of 2005 and efficient cost control."
"A positive effect also came from the company's continued efforts to enhance the quality of its subscriber base. In the fourth quarter of 2005 we recorded a 2.3% increase in total operating revenues compared with the third quarter of 2005 in spite of the seasonal decline in usage and roaming revenue," VimpelCom said.
VimpelCom's total subscriber base rose 70.9% in 2005 to 45.430 million people as of December 31, 2005. Of the total, the subscriber base in Russia rose 67.5% on the year to 43.097 million people, the company said.
Based on independent research, VimpelCom estimated its subscriber market share in Russia at 34.3% at the end of 2005, compared to an estimated 34.6% at the end of 2004.
"The annual churn rate in the past two years has been stable at approximately 30% (30.4% in 2005 and 29.6% in 2004). As the Russian marketplace continues to mature and the company shifts its focus from customer acquisition to customer loyalty and qualitative improvement of its subscriber base, a targeted retention of high-value subscribers is one of VimpelCom's key priorities," VimpelCom said.
The churn rate represents the percentage of subscribers who leave to join a rival operator.
"During 2005 we went through a major realignment of our strategy in Russia, focusing much more on revenue growth and enhancing the value of the existing subscriber base," VimpelCom's CEO Alexander Izosimov was quoted as saying in the press release.
Market analysts considered VimpelCom's results positive. "The financials reveal that Russian cellular revenue growth remains solid and that the market?s value is being noticeably redistributed in VimpelCom?s favor at MTS? expense. As a result, we expect VimpelCom?s shares to continue to rally and MTS? to stagnate or ease back," Aton Capital said in a flash note Tuesday.
VimpelCom is a leading telecommunications operator in the Commonwealth of Independent States, holding activities in Russia, Kazakhstan, Ukraine and Tajikistan.
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Posted to the site on 18th April 2006
