Arab Today, arab today vimpelcom expects wind deal to boost growth
Last Updated : GMT 21:26:01
Arab Today, arab today
Arab Today, arab today

Vimpelcom expects Wind deal to boost growth

Arab Today, arab today

Arab Today, arab today Vimpelcom expects Wind deal to boost growth

Moscow - Arabstoday

Russian mobile phone group Vimpelcom forecast earnings and revenue would grow by around 5 per cent in the next two years, with its purchase of Wind Telecom last year providing a boost as it focuses now on tough conditions at home.   Vimpelcom, which has operations in Italy, Asia and North Africa, in addition to the CIS, as a result of the $6 billion Wind deal, said it would turn its attention to organic growth and particularly its Russian heartland, where its market share has slipped behind rivals MTS and MegaFon. “Russia is a challenge ... We hope to see stronger signs (of progress) in the year ahead of us,” Chief Executive Jo Lunder told Reuters. “Our size in Russia is now comfortable - we are not going to up our share of subscribers as a top priority. We must protect and maintain our position and then focus on profit.” Earnings before interest, tax, depreciation and amortisation(EBITDA) fell 3 per cent in the fourth quarter to $2.2 billion.  Revenue rose 5 per cent, excluding acquisitions, to $5.9 billion and mobile subscriber numbers were up 13 per cent to 205 million. Norwegian group Telenor, Vimpelcom’s biggest shareholder with a voting stake of 36 per cent, had fought in vain for the group to drop the Wind deal in favour of a more Russia-focused strategy. Lunder said management was now thinking along the same lines as its biggest shareholders.  “I can only speak on behalf of management but I think all shareholders are very supportive of the strategy just now - an increased focus on operations and extracting synergies - there is general support in that direction,” he said. The Wind acquisition also saddled Vimpelcom with a heavy debt load - $24.37 billion at the end of Q4 against $22.2 billion the previous quarter. “We are comfortable with the debt level. It increased in Q4, but we see this as more of a quarterly movement than a long term trend,” Lunder said. Vimpelcom said on Tuesday it made a net loss of $386 million in the fourth quarter of 2011, hit by non-cash items of $437 million relating to foreign exchange movements and one-off charges on operations in Vietnam and Cambodia as well as the Wind deal.

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