CONSENSUS: Vimpelcom Ltd. ups Q1 sales revenues 2%, EBITDA down 0.8%
MOSCOW. May 14 (Interfax) - Telecommunications holding Vimpelcom Ltd. will have seen its first-quarter sales revenues tick up 2% to $5.6 billion to International Financial Reporting Standards (IFRS), but its EBITDA (earnings before interest, taxes, depreciation, and amortization) down 0.8% at $2.28, investment bank analysts surveyed by Interfax have predicted on average.
The holding's EBITDA margin, they predict, will be down from 42% at 40.7%.
Q1 net profits will run to $293 million, the analysts reckon.
Vimpelcom will have emphasized on growing its profit margins in Q1 and demonstrated EBITDA margin growth relative to the preceding quarter (the margin was 37.4%), Raiffeisenbank analysts think. However, sales revenues will be down quarter-on-quarter due to a contracting subscriber base and exchange-rate losses. These factors will impact profits, but will be offset by one-off income from the Vimpelcom-controlled Orascom's sale of its business in Tunisia.
"An increase in profitability should be driven by a reduction of marketing spending - both seasonal and the outcome obtained from change to development strategy - and the rejection of increasing the subscriber base in favor of increasing business profitability," Uralsib writes in its own report.
Analysts at Deutsche Bank point out roughly 8% growth in the holding's mobile business with a slight increase in ARPU (average revenue per user), as well as serious growth in revenues from cable broadband access (43%), which will positively impact the holding's quarterly results.
Forecast Vimpelcom Q1 2012 financial highlights, $ mln:
| Investment bank | Sales revenue | EBITDA | EBITDA margin, % | Net profits |
| Raiffeisenbank | 5592 | 2270 | 40.6 | 229 |
| Morgan Stanley | 5565 | 2271 | 40.8 | 410 |
| Merrill Lynch | 5645 | 2306 | 40.85 | 385 |
| Deutsche Bank | 5609 | 2247 | 40.1 | 249 |
| Goldman Sachs | 5622 | 2296.5 | 40.8 | 271.3 |
| Citi | 5602 | 2295 | 41 | 284 |
| Unicredit | 5622 | 2324 | 41.3 | 167 |
| Uralsib | 5599 | 2263 | 40.4 | 321 |
| Otkrytie | 5578 | 2265 | 40.6 | 311 |
| Troika Dialog | 5605 | 2270 | 40.5 | 300 |
| Consensus | 5604 | 2281 | 40.7 | 293 |
| Q1 2011 (pro forma) | 5500 | 2300 | 42 | - |
| Change | 2% | - 0.8 | - 1.3 %pts | - |
Vimpelcom will release its first-quarter results on Tuesday, May 15. This will be the company's first IFRS financial report. UniCredit analysts note that this event is likely associated with the holding's desire to get its securities on the European Index. Achieving that would make it possible for the company to attract a larger number of investors, whose ranks thinned after Vimpelcom stock trading waned on the Russian exchange.
In April of last year, Vimpelcom joined assets with Egyptian billionaire Naguib Sawiris's Wind Telecom. Vimpelcom's Q1 2011 - not including the merger - amounted to $589.7 million, sales revenues to $2.7 billion, EBITDA to $1.2 billion, and its OIBDA (operating income before depreciation and amortization) margin to 44.1%. Pro forma sales revenues (consolidated revenues factoring in Wind Telecom) were $5.5 billion for the quarter and EBITDA $2.3 billion (margin 42%).
The holding's net profits for 2011 as a whole plunged 71% to $488 million from $1.67 billion, as sales revenues doubled to $20.25 billion. EBITDA was up 70% at $8.13 billion, while the margin slipped to 40.1% from 46.7%.
Vimpelcom's Q4 2011 net losses amounted to $386 million versus $461 million one year earlier. That was influenced by the writing off of $652 million in cash funds, including $527 million associated with Vietnamese and Cambodian assets. The holding's sales revenues were $5.88 billion - a doubling of the figure for the same quarter of 2010. Q4 EBITDA surged 80% to $2.2 billion from $1.25 billion. The EBITDA margin sank to 37.4% from 44.3% a year earlier.
Vimpelcom Ltd. companies provide cellphone services to more than 200 million users in nineteen countries. Russia's OJSC VimpelCom is one of the holding's strongest assets, providing 39% of total group sales revenues, while Wind Italy contributes 31%.
