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Vimpel Communications (VIP)
Q3 2010 Earnings Conference Call
December 2, 2010 10:30 am ET
Alexander Izosimov - President and Chief Eexucutive Officer
Henk van Dalen - Chief Finanical Officer
Alexandra Tramont - Financial Dynamics
Tatiana Boroditskaya - UBS
Yavuz Uzay - Goldman Sachs
Nadezhda Golubeva - Unicredit
Viktor Klimovich - VTB Capital
Alexander Wright - UBS
Dalibor Vavrushka - ING
Will Milner - Arete Research
Ivan Kim - Renaissance Capital
Herve Drouet - HSBC Bank
Alexander Balakhnin - Goldman Sachs
Tibor Bokor - Otkritie
Alexei Gogolev - JPMorgan
Cesar Tiron - Morgan Stanley
Previous Statements by VIP
» VimpelCom CEO Discusses Q2 2010 Results - Earnings Call Transcript
» Vimpel-Communications Q1 2010 Earnings Call Transcript
» Vimpel-Communications Q4 2009 Earnings Call Transcript
Good morning and welcome to VimpelCom Limited conference call to discuss the Company's third quarter 2010 financial and operating results.
Before getting started, I would like to remind everyone that except for historical information, statements made on this conference call may constitute forward-looking statements that involve certain risks and uncertainties. These statements relate in part to; one, expected synergies in our Ukrainian operations; two, the Company’s 2010 capital expenditures and three, the Company’s future competitive position, tax rates and margins.
Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including the risks detailed in; one, the Company’s press release announcing third quarter 2010 financial and operating results; two, the Company’s third quarter 2010 earnings presentation; three, the Company’s registration statement on Form F-4 filed with the SEC; four, OJSC VimpelCom’s Annual Report on Form 20-F for the year ended December 31, 2009; and five, other public filings made by the Company with the SEC, each of which are posted on the Company's website at www.vimpelcom.com.
In addition, the Company’s third quarter 2010 financial and operating results press release and Form F-4 and OJSC VimpelCom’s Form 20-F are posted on the SEC’s website at www.sec.gov.
VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revisions to any of the forward-looking statements made on this conference call or to make corrections to reflect future events or developments.
If you have not received a copy of the third quarter 2010 financial and operating results press release, please contact FD at 212-850-5600 and it will be forwarded to you. In addition, the press release and the earnings presentation, each of which includes reconciliations of non-GAAP financial measures presented on this conference call, can be downloaded from the VimpelCom website.
At this time, I would like to turn the call over to Alexander Izosimov, Chief Executive Officer of VimpelCom, please go ahead.
Thank you. Hello, everyone. Thank you for joining our quarterly conference call today. As always, allow me to introduce people participating on this call. Here with me in Amsterdam are Henk van Dalen, our Chief Financial Officer; Andrew Simmons, the CFO of Ukrainian Operations and Alexey Subbotin, our Head of Investor Relations. Elena Shmatova, who runs our business in Russia and Dmitry Kromsky, Head of the CIS Operations have joined us from Moscow.
On this call, we’ll discuss the operational and financial results for the third quarter of 2010 and some recent highlights. Well, let’s start with the highlights. During the third quarter, we increased our revenues across all key segments. Consolidated OIBDA margins stayed in the targeted range of high at 40s, while operating cash flow for the first nine months exceeded $2.9 billion. In line with our dividend policy, we declared an interim dividend and will pay out $600 million before the year end.
Recently, the Anti-monopoly Committee of Ukraine gave us the green light for integration of our operations there. Good financial and operational performance in Ukraine demonstrated ability of our local management team to turn around the situation, despite difficult market conditions. We are confident that we will maintain our marketing leadership in Ukraine and deliver synergies as planned.
The Russian business became a challenge as we continued to lose mobile revenue market share. The new local management team already launched the number of initiatives. They include; prioritized acceleration of network deployment, distribution optimization, and fine tuning of pricing, and employing targeted marketing approach for each region.
We allocated, we believe, sufficient resources and are confident in our ability to restore VimpelCom's market position in Russia. Then, of course, there was an announcement of our potential transaction with Weather Investments. We believe it is a good opportunity to benefit from industry consolidation and given the size and complexity of the transaction, we are satisfied with the progress made thus far.
We remain committed and continue to move forward as outlined in our October 4th announcement. We are working to fulfill all necessary conditions precedent; including getting final approval of our supervisory board and securing the necessary regulatory approvals and have targeted the closing in the first half of 2011.
Now, I'll pass the floor to our CFO, Henk van Dalen who will describe the group financial performance. Henk, go ahead.
Henk van Dalen
Thank you, Alexander. While talking about the financial results, please bear in mind that we present the consolidated financial results with Kyivstar's operations incorporated starting from April 21st, when the transaction was effectively completed.
In accompanying press release, you will also find the pro forma financial results on the consolidated level and for our Ukrainian business unit. Our revenue increased almost 7% quarter-on-quarter to more than $2.8 billion. Consolidated fixed and mobile OIBDA was up to $1.4 billion with the best-in-class margin of more than 48%.