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VimpelCom Second-Quarter Profit Almost Doubles, Beats Estimate

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Aug. 15 (Bloomberg) -- VimpelCom Ltd. boosted profit more than analysts estimated in the second quarter as the Russian mobile operator expanded in Asia and Africa after combining with Italy’s Wind Telecom SpA.

Net income climbed 83 percent to $488 million from a pro-forma $267 million in the same period last year, VimpelCom said today in a statement. That beat an average estimate of $316 million from five analysts surveyed by Bloomberg.

Emerging market operations helped offset weak sales and profits in Europe and North America, according to the company. VimpelCom’s biggest market remains Russia, where the government is pushing billionaire shareholder Mikhail Fridman for an out-of-court settlement with Telenor ASA about the size of the Norwegian company’s stake.

“The company is heading in the right direction,” Konstantin Belov, an analyst at UralSib Financial said by phone from Moscow, before the results. “There are signs that the conflict between shareholders may be solved and it will be able to benefit from growth in Russia and other emerging markets.”

Telenor owns 35.7 percent of VimpelCom and Altimo, the telecommunications division of Fridman’s Alfa Group, owns 31.4 percent, according to data compiled by Bloomberg. Billionaire Naguib Sawiris’s Weather Investment’s has 18.8 percent. Russia’s Anti-Monopoly Service is disputing Oslo-based Telenor’s right to increase its stake in VimpelCom with the purchase of shares from Sawiris’s companies.

Sales declined 4 percent to $5.75 billion, while earnings before interest, taxes, depreciation and amortization climbed 8 percent to $2.48 billion, the company said.

The “results were negatively impacted by U.S. dollar appreciation against operating currencies,” VimpelCom said.

VimpelCom increased its subscriber base by 8 percent to 208 million, adding customers in its Africa and Asia business unit and boosting fixed and mobile broadband services in Russia and Italy, the company said.

To contact the reporter on this story: Anatoly Temkin in St. Petersburg at atemkin@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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