VimpelCom Ltd. (VIP)

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Vimpel (VIP)

Q1 2011 Earnings Call

June 1, 2011 10:30 a.m. ET


Alexandra Tramont – Vice President, Financial Dynamics

Alexander Izosimov – Chief Executive Officer

Henk van Dalen – Chief Financial Officer

Khaled Bichara – President and Chief Operating Officer

Elena Shmatova – General Director, Head, Russian Operations

Dmitry Kromsky – Head, CIS Operations

Artem Nitz – Acting CFO, Ukraine

Gerbrand Nijman – Investor Relations


Alex Kazbegi – Renaissance Capital

Tibor Bokor – Otkritie

Will Kirby - Nevsky Capital

Herve Drouet - HSBC

Stefan Gauffin - Nordea

Igor Semenov - Deutsche Bank

Will Milner - Arete Research

Viktor Klimovich - VTB Capital

Howard Goldberg - Credit Agricole

[Constantin Belov - Urosobid Capital]

[Vyashlav Shalun] with Deutsche Bank

Alex Wright - UBS

Kay Hope - Bank of America

Kathleen Middlemiss - UBS

Nadezhda Golubeva - Unicredit

Rita Tsovyan - Renaissance Capital

[Marina Valinska - Commerce Bank]

Anna Lepetukhina - Troika Dialog



Good day everyone and welcome to the VimpelCom Ltd. first quarter 2011 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the call over to Alexandra Tramont, with Financial Dynamics. Please go ahead.

Alexandra Tramont – Vice President, Financial Dynamics

Thank you. Good morning and welcome to VimpelCom's conference call to discuss the company's first quarter 2011 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, the benefit of the company's combination with Wind Telecom, including expected [inaudible] and [inaudible] expend future margins, events, and [inaudible] expenditures.

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 first quarter 2011 financial and operating results and related presentation; two, the company's practice statement filed with the SEC on Form 6-K on February 15, 2011; and three, other public filings made by the company with the SEC, each of which are posted on the company's website at www.vimpelcom.communication and the and the SEC’s website at

VimpelCom disclaims any obligation to update developments relating to these risk factors or to announce publicly any revision 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 fourth quarter and full year 2011 financial and operating results press release, please call 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.

Alexander Izosimov – Chief Executive Officer

Thank you. Good afternoon for those joining us in Europe and good morning for those who are from the U.S. And now let me introduce the people participating on this call. Here with me in Amsterdam are Henk van Dalen, our chief financial officer; Khaled Bichara, president and chief operating officer; Elena Shmatova, who runs our business in Russia; Dmitry Kromsky, head of our CIS operations; Artem Nitz, who is acting CFO in Ukraine, and Gerbrand Nijman, our new head of investor relations.

On this call, we will discuss our first quarter operational and financial results, as well as the recent developments at VimpelCom. Before we discuss the first quarter, though, we want to mention several important items. We completed the combination with Wind Telecom on April 15. However, the information we're discussing today in VimpelCom does not include the merged assets of Wind.

We will publish full pro forma data including these assets in early August, well ahead of our second quarter results. For your information, we have provided a for example, we results for the new combined group on a pro forma basis. In addition, we have included key highlights of the already reported results of Wind [Italy] and [Orascom] on a standalone basis. So today's presentation will focus the actual first quarter results of VimpelCom.

Well, now let's turn to slide number 5. VimpelCom's operational and financial performance during the first quarter of the year was strong compared to the same period last year and our business continues to develop as planned.

Russia remains our top priority and while the situation there remained challenging in the first quarter, we were pleased to see some early progress from our programs as we have continued to grow our active subscriber base.

We see good progress in Ukraine, driven by market improvement and synergies well ahead of schedule, in a challenging competitive environment where aggressive [inaudible] campaigns are targeted at regaining subscriber market share. In the CIS, we are steadily growing revenues while maintaining healthy margins.

Recently, we also made substantial progress in Southeast Asia where we completed the acquisition in Laos and signed new arrangements with our Vietnamese partners which gives us firm operational control and reignites our operations in Vietnam.

Obviously the hallmark of the year is the completion of the transformational deal with Wind Telecom in April. It has more than doubled the size of our subscribers and business and positioned VimpelCom among the top tier of international telecom companies.

Along with the recent management changes that we announced, we have already launched the integration process and are confident we will be able to realize the full advantages of the scope and scale that we targeted with this transaction. Now I'll pass the floor to our CFO, Henk van Dalen, who will describe the group's financial performance. Henk, it's yours.

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