VimpelCom First-Quarter Earnings Rise on Customer Gains

VimpelCom Ltd. (VIP), the wireless carrier owned by Russian billionaire Mikhail Fridman and Norway’s Telenor ASA (TEL), improved first-quarter profitability after adding users in former Soviet republics and Italy and cutting costs.

Earnings before interest, taxes, depreciation and amortization increased to $2.35 billion from $2.31 billion a year earlier, the Amsterdam-based company said today in a statement. Profit was in line with analyst estimates. The Ebitda margin widened to 42 percent of sales from 41.1 percent.

VimpelCom is working to reduce spending and improve operations to help cut $28.6 billion in debt resulting from the acquisition of telecommunications assets, including in Italy and Algeria, from Egyptian billionaire Naguib Sawiris in 2011.

Mobile subscriber numbers rose 4 percent from a year earlier to 215 million users, boosted in part by a competitor’s shutdown in Uzbekistan. VimpelCom cut commercial costs in Russia by shifting to a revenue-sharing model with distributors and reduced human-resources costs.

Net debt on March 31 widened 4 percent from the end of December to $22.9 billion, while the ratio of net debt to Ebitda narrowed to 2.3 from 2.6 in the fourth quarter. First-quarter net income rose 28 percent to $408 million from $318 million a year earlier.

American depositary receipts of VimpelCom rose 0.5 percent to $11.31 yesterday in New York, valuing the company at $19.9 billion.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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