VimpelCom forecasts rising sales
VimpelCom Ltd., the emerging-markets wireless carrier controlled by Russian billionaire Mikhail Fridman and partners, boosted sales in local currencies and improved its profitability last quarter, predicting further improvements in 2016.
Fourth-quarter sales rose 1 percent in local currencies to the equivalent of $2.3 billion. In dollar terms, sales fell 29 percent, VimpelCom said in a statementWednesday. Earnings before interest, taxes, depreciation and amortization rose 3 percent in local currencies to $793 million. The company forecast flat or a "low single digit" increase in service revenue in 2016, and said it's targeting as much as a 1 percentage point increase in its organic Ebitda margin.
VimpelCom, co-owned by Norway's Telenor ASA, has come under pressure over alleged corruption in the exSoviet republic of Uzbekistan. Telenor has said it will divest its 33 percent stake in the company, while VimpelCom Chief Executive Officer Jean-Yves Charlier has begun a strategic revamp of the wireless carrier.
VimpelCom last year set aside $900 million for possible fines as it waits for the outcome of investigations into alleged Uzbek bribes. The company on Wednesday said it's reached settlements with the U.S. Securities and Exchange Commission and Department of Justice as well as the Dutch Public Prosecution Service. While they're still subject to the approval of the authorities, VimpelCom said that it will acknowledge "certain violations" of U.S. and Dutch laws under the settlements. Financial penalties will be within the provision, it said.
VimpelCom is showing operational improvements under Charlier, said Alexander Vengranovich, an analyst at Otkritie Capital in Moscow. Charlier in August merged VimpelCom's Wind Italy unit with CK Hutchison Holdings Ltd.'s 3 Italia allowing the carrier to de-consolidate Italian operations from its balance sheet, offloading more than $12 billion in debt. The company also bought a rival in Pakistan and plans to sell wireless towers in emerging markets to cut debt.