Bloomberg News

VimpelCom Drops Most in Three Months on Fourth-Quarter Net Loss

March 13, 2012

VimpelCom Ltd. (VIP), Russia’s third- biggest mobile carrier by subscribers, declined the most in three months after posting a fourth-quarter net loss and forecasting “mid-single digit” revenue growth through 2014.

American depositary receipts of VimpelCom fell 4.7 percent to $11.26 at 11:41 a.m. in New York, the steepest drop since Dec. 12 on an intraday basis.

The net loss was $386 million compared with profit of $461 million a year earlier as the company booked a $527 million impairment on operations in Vietnam and Cambodia, Amsterdam- based VimpelCom said today in a statement.

“What caused the net loss are the Vietnam and Cambodia operations,” Iouli Matevossov, a senior analyst at Alfa Bank in Moscow, said by phone. “Perhaps the choice of the markets was not good, maybe they shouldn’t have invested there.”

VimpelCom, the world’s sixth-largest wireless operator by subscribers, added debt to buy Wind Telecom SpA last year. The margin for earnings before interest, taxes, depreciation and amortization in Russia, the largest unit, narrowed to 39.4 percent from 46.4 percent as the company invested in networks to draw new customers.

The company forecast “mid-single-digit” Ebitda growth through 2014.

“In our view, this is a moderate forecast that isn’t aggressive and isn’t weak at the same time,” Victor Klimovich, a telecommunications analyst at VTB Capital in Moscow, said by phone. “We think this is an attainable target.”

To contact the reporters on this story: Ksenia Galouchko in New York at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


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