UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 2008
Commission File Number 1-14522
Open Joint Stock Company “Vimpel-Communications”
(Translation of registrant’s name into English)
10 Ulitsa 8-Marta, Building 14, Moscow, Russian Federation 127083
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): .
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): .
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| OPEN JOINT STOCK COMPANY | ||||
| “VIMPEL-COMMUNICATIONS” | ||||
| (Registrant) | ||||
| Date: June 4, 2008 | ||||
| By: | /s/ Alexander V. Izosimov | |||
| Name: | Alexander V. Izosimov | |||
| Title: | Chief Executive Officer and | |||
| General Director | ||||
Moscow and New York (June 4, 2008) - Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) (NYSE: VIP), a leading provider of telecommunications services in Russia and the Commonwealth of Independent States (CIS) today announced its financial and operating results for the quarter ended March 31, 2008.
Financial and Operating Highlights
| • | Net operating revenues reached $2,108 million, an increase of 41.7% versus 1Q2007. |
| • | OIBDA reached $1,126 million, an increase of 47.0% versus 1Q2007. |
| • | OIBDA margin was 53.4%, including 55.2% in Russia and 50.4% in Kazakhstan. |
| • | Net income totaled $601 million, an increase of 117.0% versus 1Q2007. |
| • | Active mobile subscribers increased by 6.5 million versus 1Q2007, reaching 52.3 million. |
| • | Acquisition of Golden Telecom was completed on February 28, 2008. |
| • | The Board of Directors proposed a dividend of $0.58* per ADS, an increase of 81% compared to the previous year. |
| * | On April 16, 2008, VimpelCom’s Board of Directors recommended a dividend of 270.01 rubles per ordinary share. Last year’s dividends were approved at 166.88 rubles per ordinary share. Dividends per ADS was calculated only for information purposes given the Russian Central Bank exchange rate and the ratio of ADS to ordinary shares on the date of the respective Board recommendations. The actual amount in US$ to be paid to the ADS-holders in case of the AGM approval will depend on the exchange rate around the payment date and any required withholding tax. |
Commenting on today’s announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, “The first quarter of 2008 should be viewed as the beginning of a new era for VimpelCom. Completion of the Golden Telecom acquisition has opened an entirely new set of growth opportunities which, when realized, should further strengthen our position in the Russian telecom sector.
“Meanwhile our mobile business continues to show strong financial results. We are growing revenues and OIBDA in virtually all of our markets, in spite of the negative impact of economic problems in Central Asia, particularly in Kazakhstan.
“With an OIBDA margin above 50% and a revenue growth rate above 40%, VimpelCom remains a rare example of a large, fast growing and highly profitable business. The underlying strength of our core business coupled with new opportunities of being an integrated player should provide a robust platform for our future growth ambitions.”
2
Changes in Definitions and Reported Data
Beginning with this quarterly report, we have made significant changes in the reporting structure in order to reflect the integration with Golden Telecom, which we began to consolidate into VimpelCom’s accounts starting from March 1, 2008.
Adjusting to the new complexity of the business we now consolidate our revenues along four segments: two geographic segments (Russia and the CIS) and two business segments (Mobile and Fixed). Fixed-line operations in Armenia (representing $36.2 million of revenue in the first quarter of 2008) are now reflected within the CIS fixed-line segment, while the results of Golden Telecom’s mobile operations in Ukraine (representing $0.5 million of revenue in March 2008) are now part of the mobile business segment in the CIS.
Due to the increasing integration between different parts of our business, we include inter-company transactions in the reported revenues of geographic and business segments, and indicate the amount of inter-company eliminations within and between the segments.
We discontinued providing registered subscriber base numbers, completely shifting to active base. We have also aligned our churn rate reporting to the three month active subscriber base, which we believe is the most meaningful way of reporting. Consequently, this shift caused a step-change in our reported subscriber market share.
Within sales, general and administrative costs (SG&A) we now provide an explicit breakdown between general and administrative costs (G&A) and sales and marketing costs (S&M). As sales and marketing costs include all of the relevant costs of subscriber acquisitions, retention and usage stimulation, we believe these measures provide more accurate information than subscriber acquisition costs. Previously part of our S&M costs was shown in G&A.
A country-by-country CAPEX breakdown can be found in Attachment D.
A detailed country-by-country breakdown of the main financial and operating data can be found in the file entitled FinancialOperatingQ12008.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.
3
Key Consolidated Financial and Operating Results
| CONSOLIDATED OPERATIONS (US$, mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Net operating revenues |
2,108 | 1,488 | 41.7 | % | 2,010 | 4.9 | % | ||||||||
| OIBDA |
1,126 | 766 | 47.0 | % | 918 | 22.7 | % | ||||||||
| OIBDA margin, % |
53.4 | % | 51.5 | % | 45.7 | % | |||||||||
| SG&A |
528 | 439 | 20.3 | % | 716 | -26.3 | % | ||||||||
| including Sales & Marketing Expenses |
187 | 136 | 37.5 | % | 219 | -14.6 | % | ||||||||
| including General & Administrative Costs |
341 | 303 | 12.5 | % | 497 | -31.4 | % | ||||||||
| SG&A percentage |
25.0 | % | 29.5 | % | 35.6 | % | |||||||||
| Net income |
601 | 277 | 117.0 | % | 368 | 63.3 | % | ||||||||
| Net income per common share, (US$) |
11.84 | 5.45 | 117.2 | % | 7.25 | 63.3 | % | ||||||||
| Net income per ADS equivalent*, (US$) |
0.59 | 0.27 | 118.5 | % | 0.36 | 63.9 | % | ||||||||
| Capital expenditures |
358 | 303 | 18.2 | % | 796 | -55.0 | % | ||||||||
| Mobile subscribers (‘000) |
52,293 | 45,784 | 14.2 | % | 51,740 | 1.1 | % | ||||||||
| Broadband internet service subscribers (‘000) |
534 | n/a | n/a | ||||||||||||
| * | Number of ADSs is based on the ratio of 20 ADSs per one ordinary share, which came into effect on August 21, 2007. Prior year amounts have been adjusted to reflect the new ratio. |
| Net operating revenue 1Q 2008 (US$ mln) |
Russia | CIS | Eliminations | Total | ||||
| Mobile business |
1,675 | 271 | -2 | 1,944 | ||||
| Fixed business |
132 | 47 | -4 | 175 | ||||
| Eliminations |
-10 | -1 | -11 | |||||
| Total net operating revenue |
1,797 | 317 | -6 | 2,108 |
4
| RUSSIA (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Net operating revenues |
1,797 | 1,279 | 40.5 | % | 1,702 | 5.6 | % | ||||||||
| OIBDA |
992 | 676 | 46.7 | % | 773 | 28.3 | % | ||||||||
| OIBDA margin, % |
55.2 | % | 52.9 | % | 45.4 | % | |||||||||
| SG&A |
434 | 375 | 15.7 | % | 633 | -31.4 | % | ||||||||
| including Sales & Marketing Expenses |
158 | 114 | 38.6 | % | 186 | -15.1 | % | ||||||||
| including General & Administrative Costs |
276 | 261 | 5.7 | % | 447 | -38.3 | % | ||||||||
| SG&A percentage |
24.2 | % | 29.3 | % | 37.2 | % | |||||||||
| Net income |
616 | 280 | 120.0 | % | 364 | 69.2 | % |
Our Russian operations continue to show year-on-year revenue growth over 40% with a record-high OIBDA margin. In the first quarter our OIBDA in the Russian mobile segment reached $959 million. This includes a $43 million reversal of our stock-price based compensation plans accruals, resulting mainly from the decline in VimpelCom’s ADS price in the first quarter of 2008. However, even excluding this effect, the OIBDA margin of the Russian mobile segment stayed close to 55%.
With the acquisition of Golden Telecom, a cornerstone of our integrated operator strategy, we assumed substantial debt and absorbed a lower-margin business. The acquisition dictated a more conservative approach to the Russian mobile market aimed at preserving our margins and maximizing cash-flow by restricting marketing expenses and maintaining stable pricing.
Reduced marketing activities in a seasonally weak quarter resulted in a slight decline in ARPU, and, as a result, in mobile revenue compared to the previous quarter. Evidently, this decline was more than offset by the addition of fixed-line revenue for March.
Golden Telecom’s revenue in Russia for the entire first quarter was approximately 61% higher than a year ago, driven by very good development in all business lines.
Now that the Golden Telecom transaction and the initial part of the integration are behind us, we plan to step up marketing activities in order to protect our revenue market share on the Russian mobile market.
5
The growth in our net income was disproportionately higher than the growth in our OIBDA, primarily due to a foreign exchange gain of $185 million. This foreign exchange gain resulted mainly from the revaluation of our US dollar-denominated loans.
| RUSSIA REVENUE (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Net operating revenues |
1,797 | 1,279 | 40.5 | % | 1,702 | 5.6 | % | ||||||||
| Mobile revenue |
1,675 | 1,279 | 31.0 | % | 1,702 | -1.6 | % | ||||||||
| Fixed revenue |
132 | n/a | n/a | ||||||||||||
| Eliminations |
-10 | n/a | n/a | ||||||||||||
| RUSSIA OPERATING DEVELOPMENT |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
42,079 | 38,631 | 8.9 | % | 42,221 | -0.3 | % | ||||||||
| Subscriber market share*, % |
25.0 | % | 31.2 | % | 29.9 | % | |||||||||
| MOU, min |
198.7 | 160.9 | 23.5 | % | 204.1 | -2.6 | % | ||||||||
| ARPU, US$ |
13.2 | 10.9 | 21.1 | % | 13.5 | -2.2 | % | ||||||||
| Broadband internet service subscribers (‘000) |
530 | n/a | n/a | ||||||||||||
|
* Subscriber market share data presented here and in the following country tables are published by AC&M-Consulting. Starting from January 1, 2008 VimpelCom’s subscriber market share is being reported solely on the basis of active subscribers, while previously it was based on registered subscribers. The drop in the reported market share in the first quarter is mainly caused by the change of reporting methodology.
|
| ||||||||||||||
| RUSSIA OIBDA DEVELOPMENT (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA Total |
992 | 676 | 46.7 | % | 773 | 28.3 | % | ||||||||
| Mobile OIBDA |
959 | 676 | 41.7 | % | 773 | 23.9 | % | ||||||||
| Fixed OIBDA |
33 | n/a | n/a | ||||||||||||
| Total OIBDA margin, % |
55.2 | % | 52.9 | % | 45.4 | % | |||||||||
| Mobile OIBDA margin, % |
57.2 | % | 52.9 | % | 45.4 | % | |||||||||
| Fixed OIBDA margin, % |
25.0 | % | n/a | n/a | |||||||||||
6
| CIS OPERATIONS (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Net operating revenues |
317 | 211 | 50.2 | % | 314 | 1.0 | % | ||||||||
| OIBDA |
134 | 90 | 48.9 | % | 145 | -7.6 | % | ||||||||
| OIBDA margin, % |
42.3 | % | 42.7 | % | 46.2 | % | |||||||||
| SG&A |
94 | 65 | 44.6 | % | 84 | 11.9 | % | ||||||||
| including Sales & Marketing Expenses |
29 | 22 | 31.8 | % | 33 | -12.1 | % | ||||||||
| including General & Administrative Costs |
65 | 43 | 51.2 | % | 51 | 27.5 | % | ||||||||
| SG&A percentage |
29.7 | % | 30.8 | % | 26.8 | % | |||||||||
| Net income |
-14 | -3 | 4 |
Our operations in the CIS countries continue to demonstrate strong financial performance, with revenue growth of more than 50% and OIBDA margin over 40%. The main growth contributors are Kazakhstan and Ukraine, which now includes the Ukrainian business of Golden Telecom. We are also pleased with the growth in Uzbekistan, signs of improvements in Armenia, and continued strong growth in our smaller markets.
However, our business dynamics were affected by economic problems in the Central Asian republics. In Kazakhstan, our largest market, the economy suffered from a liquidity crisis, while Tajikistan and Uzbekistan were seriously impacted by extremely cold weather and power outages.
In Armenia we started to see positive trends and an increase in the number of active subscribers. We introduced our Beeline brand on the local market and accelerated our marketing activities. Our focus will remain on building market share and expanding fixed-mobile convergence opportunities.
7
Net income losses in the first quarter were caused mainly by one-off factors, such as a $16 million write-off of equipment in Armenia in the course of modernizing the network.
CIS Revenues Development
| KAZAKHSTAN (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Net operating revenue |
162.8 | 119.4 | 36.3 | % | 174.6 | -6.8 | % | |||||
| Mobile |
162.1 | 119.4 | 35.8 | % | 174.6 | -7.2 | % | |||||
| Fixed |
1.1 | n/a | n/a | |||||||||
| Elimination |
-0.4 | n/a | n/a | |||||||||
| UKRAINE (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Net operating revenue |
44.8 | 16.3 | 174.8 | % | 34.5 | 29.9 | % | |||||
| Mobile |
36.4 | 16.3 | 123.3 | % | 34.5 | 5.5 | % | |||||
| Fixed |
8.9 | n/a | n/a | |||||||||
| Elimination |
-0.5 | n/a | n/a | |||||||||
| ARMENIA (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Net operating revenue |
59.1 | 54.1 | 9.2 | % | 59.8 | -1.2 | % | |||||
| Mobile |
22.9 | 19.9 | 15.1 | % | 23.5 | -2.4 | % | |||||
| Fixed |
36.2 | 34.2 | 5.8 | % | 36.3 | -0.1 | % | |||||
| Elimination |
0.0 | n/a | n/a | |||||||||
8
| UZBEKISTAN (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Net operating revenue |
39.5 | 18.2 | 117.0 | % | 36.6 | 7.9 | % | |||||
| Mobile |
38.7 | 18.2 | 112.6 | % | 36.6 | 5.7 | % | |||||
| Fixed |
0.8 | n/a | n/a | |||||||||
| Elimination |
0.0 | n/a | n/a | |||||||||
| TAJIKISTAN (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Net operating revenue |
8.4 | 2.9 | 189.7 | % | 8.1 | 3.7 | % | |||||
| Mobile |
8.4 | 2.9 | 189.7 | % | 8.1 | 3.7 | % | |||||
| Fixed |
n/a | n/a | n/a | |||||||||
| Elimination |
n/a | n/a | n/a | |||||||||
| GEORGIA (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Net operating revenue |
2.4 | 0.03 | 7900 | % | 0.9 | 166.7 | % | |||||
| Mobile |
2.4 | 0.03 | 7900 | % | 0.9 | 166.7 | % | |||||
| Fixed |
n/a | n/a | n/a | |||||||||
| Elimination |
n/a | n/a | n/a | |||||||||
| CIS REVENUES (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| Eliminations |
-0.9 | n/a | n/a | |||||||||
| Mobile |
270.9 | 176.7 | 53.3 | % | 278.2 | -2.6 | % | |||||
| Fixed |
47 | 34.2 | 37.4 | % | 36.4 | 29.1 | % | |||||
| Net operating revenue |
317 | 210.9 | 50.3 | % | 314.6 | 0.8 | % | |||||
9
CIS Operating Highlights
| KAZAKHSTAN |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
4,777 | 3,501 | 36.4 | % | 4,603 | 3.8 | % | ||||||||
| Subscriber market share*, % |
39.5 | % | 50.2 | % | 46.5 | % | |||||||||
| MOU, min |
99.1 | 72.3 | 37.1 | % | 98.9 | 0.2 | % | ||||||||
| ARPU, US$ |
11.6 | 12.2 | -4.9 | % | 13.0 | -10.8 | % | ||||||||
| UKRAINE |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
1,971 | 1,953 | 0.9 | % | 1,941 | 1.5 | % | ||||||||
| Subscriber market share*, % |
3.5 | % | 4.5 | % | 4.8 | % | |||||||||
| MOU mobile, min |
210.2 | 138.0 | 52.3 | % | 183.2 | 14.7 | % | ||||||||
| ARPU mobile, US$ |
6.1 | 3.0 | 103.3 | % | 5.6 | 8.9 | % | ||||||||
| Broadband internet subscribers (‘000) |
4 | n/a | n/a | ||||||||||||
| ARPU broadband, US$ |
39.4 | n/a | n/a | ||||||||||||
10
| ARMENIA |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
520 | 440 | 18.2 | % | 442 | 17.6 | % | ||||||||
| Subscriber market share*, % |
26.9 | % | 37.3 | % | 26.1 | % | |||||||||
| MOU mobile, min |
158.9 | 141.3 | 12.5 | % | 171.8 | -7.5 | % | ||||||||
| ARPU mobile, US$ |
16.1 | 14.5 | 11.0 | % | 17.4 | -7.5 | % | ||||||||
| UZBEKISTAN |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
2,422 | 1,106 | 119.0 | % | 2,120 | 14.2 | % | ||||||||
| Subscriber market share*, % |
33.6 | % | 33.1 | % | 37.3 | % | |||||||||
| MOU, min |
265.3 | 242.2 | 9.5 | % | 283.4 | -6.4 | % | ||||||||
| ARPU, US$ |
5.8 | 6.7 | -13.4 | % | 6.8 | -14.7 | % | ||||||||
| TAJIKISTAN |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
378 | 145 | 160.7 | % | 339 | 11.5 | % | ||||||||
| Subscriber market share*, % |
15.9 | % | 11.2 | % | 18.1 | % | |||||||||
| MOU, min |
205.8 | 205.8 | 0.0 | % | 216.3 | -4.9 | % | ||||||||
| ARPU, US$ |
8.0 | 8.7 | -8.0 | % | 9.0 | -11.1 | % | ||||||||
| GEORGIA |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| Active mobile subscribers (‘000) |
146 | 7 | 1985.7 | % | 73 | 100.0 | % | ||||||||
| Subscriber market share*, % |
5.3 | % | 0.4 | % | 3.7 | % | |||||||||
| MOU, min |
87.1 | 47.9 | 81.8 | % | 121.5 | -28.3 | % | ||||||||
| ARPU, US$ |
7.4 | 3.2 | 131.3 | % | 9.0 | -17.8 | % | ||||||||
| * | Source: AC&M-Consulting. The drop in the reported market share is caused by the fact that starting from January 1, 2008 VimpelCom’s market share is calculated on the basis of active subscribers, while before that date it was based on registered subscribers. |
11
CIS OIBDA Development
| CIS OIBDA (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA total |
134 | 90 | 48.9 | % | 145 | -7.6 | % | ||||||||
| OIBDA margin, % |
42.3 | % | 42.7 | % | 46.2 | % | |||||||||
| Mobile |
112.8 | 73.7 | 53.1 | % | 122.4 | -7.8 | % | ||||||||
| Fixed |
21.5 | 16.2 | 32.7 | % | 22.8 | -5.7 | % |
| KAZAKHSTAN (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA total |
82.0 | 62.0 | 32.3 | % | 92.2 | -11.1 | % | ||||||||
| OIBDA Margin, % |
50.4 | % | 51.9 | % | 52.8 | % | |||||||||
| Mobile |
81.6 | 62.0 | 31.6 | % | 92.2 | -11.5 | % | ||||||||
| Fixed |
0.4 | n/a | n/a |
12
| UKRAINE (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA total |
3.2 | -6.5 | n/a | 3.6 | -11.1 | % | |||||||||
| OIBDA Margin, % |
7.1 | % | n/a | 10.4 | % | ||||||||||
| Mobile |
1.1 | -6.5 | n/a | 3.6 | -69.4 | % | |||||||||
| Fixed |
2.1 | n/a | n/a | ||||||||||||
| ARMENIA (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA total |
29.1 | 27.3 | 6.6 | % | 32.5 | -10.5 | % | ||||||||
| OIBDA Margin, % |
49.2 | % | 50.5 | % | 54.3 | % | |||||||||
| Mobile |
10.4 | 11.1 | -6.3 | % | 9.7 | 7.2 | % | ||||||||
| Fixed |
18.7 | 16.2 | 15.4 | % | 22.8 | -18.0 | % | ||||||||
| UZBEKISTAN (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA total |
20.9 | 8.6 | 143.0 | % | 17.8 | 17.4 | % | ||||||||
| OIBDA Margin, % |
52.9 | % | 47.3 | % | 48.6 | % | |||||||||
| Mobile |
20.6 | 8.6 | 139.5 | % | 17.8 | 15.7 | % | ||||||||
| Fixed |
0.3 | n/a | n/a | ||||||||||||
| TAJIKISTAN (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||||
| OIBDA total |
1.3 | -0.3 | n/a | 1.4 | -7.1 | % | |||||||||
| OIBDA Margin, % |
15.5 | % | n/a | 17.3 | % | ||||||||||
| Mobile |
1.3 | -0.3 | n/a | 1.4 | -7.1 | % | |||||||||
| Fixed |
n/a | n/a | n/a | ||||||||||||
13
| GEORGIA (US$ mln) |
1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | |||||||
| OIBDA total |
-2.2 | -1.2 | 83.3 | % | -2.3 | -4.3 | % | |||||
| OIBDA Margin, % |
n/a | n/a | n/a | |||||||||
| Mobile |
-2.2 | -1.2 | 83.3 | % | -2.3 | -4.3 | % | |||||
| Fixed |
n/a | n/a | n/a |
For more information on financial and operating data of the CIS countries, please refer to the supplementary file FinancialOperatingQ12008.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.
Recent Developments
On May 27, 2008, VimpelCom received the preliminary conclusion of the Russian Tax Inspectorate’s review of VimpelCom’s tax filings for the 2005 and 2006 financial years. According to this document, VimpelCom owes approximately $54 million in additional taxes (excluding fines and penalties) for the respective years. Most of the claims are similar to the claims we received for previous financial years, and in the past we have been able to successfully reverse most of these claims in the Russian courts. On June 3, 2008, we submitted our preliminary objections to the Tax Inspectorate. We expect to receive a final tax claim in the near future and to appeal the final tax claim in the Russian courts to the extent that it is not reduced by our objections. We have not made any reserves for these tax claims, because we believe that the claims will ultimately be resolved in our favor.
14
The Company’s management will discuss its first quarter results during a conference call and slide presentation on June 4, 2008 at 6:30 pm Moscow time (10:30 am ET in New York). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com. The conference call replay will be available through June 13, 2008. The slide presentation webcast will also be available for download on VimpelCom’s website http://www.vimpelcom.com.
The VimpelCom Group is a telecommunications operator, providing voice and data services, covered through a range of wireless, fixed and broadband technologies. The Group includes companies operating in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia and Armenia, in territories with a total population of about 250 million. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange (“NYSE”). VimpelCom’s ADSs are listed on the NYSE under the symbol “VIP”.
This press release contains “forward-looking statements”, as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to the Company’s strategic and development plans, including network development plans, developments in the telecommunications markets in which the Company operates, and the resolution of the tax claim for the financial years 2005 and 2006. These and other forward-looking statements are based on management’s best assessment of the Company’s strategic and financial position and of future market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of unforeseen developments from competition, governmental regulation of the telecommunications industries in Russia and the CIS, general political uncertainties in Russia and the CIS and general economic developments in Russia and the CIS, continued volatility in the world economy, challenges to 3G and Far East tenders and/or litigation with third parties. The actual outcome may also differ materially if the Company is unable to obtain all necessary corporate approvals relating to its business (including approval of funding and specific transactions), if the Company is unable to successfully integrate newly-acquired businesses, including Golden Telecom, and other factors. As a result of such risks and uncertainties, there can be no assurance that the effects of competition or current or future changes in the political, economic and social environment or current or future regulation of the Russian and CIS telecommunications industries will not have a material adverse effect on the VimpelCom Group. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in
15
the Company’s Annual Report on Form 20-F for the year ended December 31, 2007 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.
| For more information, please contact: | ||
| Alexander Boreyko | Michael Polyviou | |
| VimpelCom | FD | |
| Tel: 7 (495) 910-5977 | Tel: 1 (212) 850-5600 | |
| Investor_Relations@vimpelcom.com | mpolyviou@fd-us.com | |
- Definitions and tables are attached –
Attachment A: Definitions
Active mobile subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remain in the base at the end of the reported period. Such activities include all incoming and outgoing calls, subscriber fee accruals, debits related to service, outgoing SMS, MMS, data transmission and receipt sessions, but do not include incoming SMS and MMS sent by our Company or abandoned calls.
16
Each ADS represents 0.05 of one share of common stock. This ratio was established effective August 21, 2007.
ARPU (Monthly Average Revenue per User), a non-U.S. GAAP financial measure, is calculated by dividing the Company’s service revenue during the relevant period, including roaming revenue and interconnect revenue, but excluding revenue from connection fees, sales of handsets and accessories and other non-service revenue, by the average number of the Company’s active subscribers during the period and dividing by the number of months in that period. Reconciliation of ARPU to service revenues and connection fees, the most directly comparable U.S. GAAP financial measure, is presented below in the tables section. The Company believes that ARPU provides useful information to investors because it is an indicator of the performance of the Company’s business operations and assists management in budgeting. The Company also believes that ARPU provides management with useful information concerning usage and acceptance of the Company’s services. ARPU should not be viewed in isolation or an alternative to other figures reported under U.S. GAAP.
Broadband internet service subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remained in the base at the end of the reported period. Such activities include monthly internet access using FTTB, xDSL and WiFi technologies.
CIS Geographic Segment for the purpose of VimpelCom reporting includes our operations in the following countries: Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Armenia and Georgia.
Fixed-line subscriber is an authorized user of fixed-line communications services.
General and administrative costs (G&A) include salaries and outsourcing costs, including related social contributions required by Russian law; stock price-based compensation expenses; repair and maintenance expenses; rent, including lease payments for base station sites; utilities; other miscellaneous expenses, such as insurance, operating taxes, license fees, and accounting, audit and legal fees.
Market share of subscribers for each relevant area is calculated by dividing the estimated number of our subscribers in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan and Armenia, respectively, by the total estimated number of subscribers in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan and Armenia, respectively and is provided by AC&M-Consulting.
Mobile services are wireless voice and data transmission services excluding WiFi.
MOU (Monthly Average Minutes of Use per User) is calculated by dividing the total number of minutes of usage for incoming and outgoing calls during the relevant period (excluding guest roamers) by the average number of active subscribers during the period and dividing by the number of months in that period.
17
OIBDA is a non-U.S. GAAP financial measure. OIBDA, previously referred to as EBITDA by the Company, is defined as operating income before depreciation and amortization. The Company believes that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under U.S. GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculations are commonly used as bases for some investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the wireless telecommunications industry. OIBDA should not be considered in isolation as an alternative to net income, operating income or any other measure of performance under U.S. GAAP. OIBDA does not include our need to replace our capital equipment over time. Reconciliation of OIBDA to operating income, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section.
OIBDA margin is OIBDA expressed as a percentage of total net operating revenues. Reconciliation of OIBDA margin to operating income as a percentage of total net operating revenues, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section.
Prepaid subscribers are those subscribers who pay for their services in advance.
Sales and marketing costs (S&M) include marketing, advertising and dealer commissions expenses.
18
Attachment B: VimpelCom financial statements
Open Joint Stock Company “Vimpel-Communications”
Condensed Consolidated Statements of Operations
| Three months ended March 31, |
||||||||
| 2008 | 2007 | |||||||
| (In thousands of US dollars , except per share (ADS) amounts) |
||||||||
| Operating revenues: |
||||||||
| Service revenues and connection fees |
$ | 2,105,272 | $ | 1,486,192 | ||||
| Sales of handsets and accessories |
1,679 | 1,522 | ||||||
| Other revenues |
2,447 | 966 | ||||||
| Total operating revenues |
2,109,398 | 1,488,680 | ||||||
| Revenue based tax |
(1,499 | ) | (633 | ) | ||||
| Net operating revenues |
2,107,899 | 1,488,047 | ||||||
| Operating expenses: |
||||||||
| Service costs |
430,994 | 265,326 | ||||||
| Cost of handsets and accessories sold |
1,611 | 1,728 | ||||||
| Selling general and administrative expenses |
528,445 | 439,467 | ||||||
| Depreciation |
356,992 | 269,172 | ||||||
| Amortization |
67,394 | 53,289 | ||||||
| Provision for doubtful accounts |
20,937 | 15,109 | ||||||
| Total operating expenses |
1,406,373 | 1,044,091 | ||||||
| Operating income |
701,526 | 443,956 | ||||||
| Other income and expenses: |
||||||||
| Interest income |
14,721 | 4,652 | ||||||
| Interest expense |
(79,137 | ) | (45,805 | ) | ||||
| Net foreign exchange gain |
185,008 | 16,729 | ||||||
| Other expenses |
(8,160 | ) | (10,814 | ) | ||||
| Total other income and expenses |
112,432 | (35,238 | ) | |||||
| Income before income taxes and minority interest |
813,958 | 408,718 | ||||||
| Income taxes expense |
195,628 | 119,946 | ||||||
| Minority interest in net earnings of subsidiaries |
17,045 | 11,497 | ||||||
| Income before cumulative effect of change in accounting principle |
601,285 | 277,275 | ||||||
| Cumulative effect of changes in accounting principles |
— | — | ||||||
| Net income |
601,285 | 277,275 | ||||||
| Net income per common share |
$ | 11.84 | $ | 5.45 | ||||
| Net income per ADS equivalent |
$ | 0.59 | $ | 0.27 | ||||
| Weighted average common shares outstanding (thousands) |
50,777 | 50,892 | ||||||
19
Open Joint Stock Company “Vimpel-Communications”
Unaudited Condensed Consolidated Balance Sheets
| March 31, 2008 |
December 31, 2007 | |||||
| (In thousands of US dollars) | ||||||
| Assets |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 620,680 | $ | 1,003,711 | ||
| Trade accounts receivable |
525,599 | 281,396 | ||||
| Other current assets |
685,934 | 441,810 | ||||
| Total current assets |
1,832,213 | 1,726,917 | ||||
| Non–current assets |
||||||
| Property and equipment, net |
6,879,895 | 5,497,819 | ||||
| Telecommunication licenses and allocation of frequencies, net |
1,062,501 | 915,211 | ||||
| Other intangible assets, net |
4,946,283 | 1,302,318 | ||||
| Other assets |
1,305,242 | 1,126,619 | ||||
| Total non–current assets |
14,193,921 | 8,841,967 | ||||
| Total assets |
$ | 16,026,134 | $ | 10,568,884 | ||
| Liabilities and shareholders’ equity |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 634,414 | $ | 700,589 | ||
| Customer advances and deposits |
431,011 | 423,611 | ||||
| Short-term debt |
968,772 | 526,512 | ||||
| Accrued liabilities |
686,983 | 348,989 | ||||
| Total current liabilities |
2,721,180 | 1,999,701 | ||||
| Deferred income taxes |
945,265 | 576,276 | ||||
| Long-term debt |
5,709,263 | 2,240,097 | ||||
| Accrued liabilities |
66,688 | 52,614 | ||||
| Minority Interest |
406,265 | 288,410 | ||||
| Shareholders’ equity |
6,177,473 | 5,411,786 | ||||
| Total liabilities and shareholders’ equity |
$ | 16,026,134 | $ | 10,568,884 | ||
20
Open Joint Stock Company “Vimpel-Communications”
Unaudited Condensed Consolidated Statements of Cash Flows
| Three months ended March 31, |
||||||||
| 2008 | 2007 | |||||||
| (In thousands of US dollars) | ||||||||
| Net cash provided by operating activities |
$ | 859,919 | $ | 655,865 | ||||
| Proceeds from bank and other loans |
3,708,000 | 228,594 | ||||||
| Sale of treasury stock |
800 | 8,087 | ||||||
| Payments of fees in respect of bank loans |
(32,449 | ) | (382 | ) | ||||
| Repayment of bank and other loans |
(109,754 | ) | (94,593 | ) | ||||
| Net cash provided by financing activities |
3,566,597 | 141,706 | ||||||
| Sale of short-term investments |
42,203 | — | ||||||
| Purchase of property and equipment |
(392,363 | ) | (279,988 | ) | ||||
| Acquisition of subsidiaries, net of cash |
(4,225,662 | ) | — | |||||
| Late payment of purchase price |
(12,688 | ) | ||||||
| Purchase of intangible assets |
(17,678 | ) | (5,161 | ) | ||||
| Purchase of software |
(74,150 | ) | (98,864 | ) | ||||
| Exercise of escrow cash deposit |
200,170 | — | ||||||
| Loans granted |
(350,000 | ) | — | |||||
| Purchase of other assets |
(12,146 | ) | (8,878 | ) | ||||
| Net cash used in investing activities |
(4,829,626 | ) | (405,579 | ) | ||||
| Effect of exchange rate changes on cash |
20,079 | 2,068 | ||||||
| Net increase (decrease) in cash |
(383,031 | ) | 394,060 | |||||
| Cash and cash equivalents at beginning of period |
1,003,711 | 344,494 | ||||||
| Cash and cash equivalents at end of period |
$ | 620,680 | $ | 738,554 | ||||
| Supplemental cash flow information |
||||||||
| Cash paid during the period: |
||||||||
| Income tax |
$ | 185,725 | $ | 122,062 | ||||
| Interest |
$ | 42,498 | $ | 25,813 | ||||
| Non–cash activities: |
||||||||
| Equipment acquired under financing and capital lease agreements |
37,204 | 17,102 | ||||||
| Accounts payable for equipment and other long–lived assets |
248,913 | 140,413 | ||||||
| Acquisitions: |
||||||||
| Fair value of assets acquired |
2,577,164 | — | ||||||
| Difference between the amount paid and the fair value of net assets acquired |
2,746,221 | — | ||||||
| Cash paid for the capital stock |
(4,315,020 | ) | — | |||||
| Liabilities assumed |
$ | 1,008,365 | — | |||||
21
Attachment C: Reconciliation Tables (Unaudited)
Consolidated
Reconciliation of OIBDA
(In millions of US dollars)
| OIBDA Consolidated Total |
Three months ended | ||||||||
| Mar 31, 2008 |
Mar 31, 2007 |
Dec 31, 2007 |
|||||||
| OIBDA |
1,126 | 766 | 918 | ||||||
| Depreciation |
(357 | ) | (269 | ) | (331 | ) | |||
| Amortization |
(67 | ) | (53 | ) | (56 | ) | |||
| Operating income |
702 | 444 | 531 | ||||||
Reconciliation of OIBDA Margin
| OIBDA Margin Consolidated Total |
Three months ended | ||||||||
| Mar 31, 2008 |
Mar 31, 2007 |
Dec 31, 2007 |
|||||||
| OIBDA margin |
53.4 | % | 51.5 | % | 45.7 | % | |||
| Less: Depreciation as a percentage of net operating revenue |
(16.9 | )% | (18.1 | )% | (16.5 | )% | |||
| Less: Amortization as a percentage of net operating revenue |
(3.2 | )% | (3.6 | )% | (2.8 | )% | |||
| Operating income as a percentage of net operating revenue |
33.3 | % | 29.8 | % | 26.4 | % | |||
22
Attachment D: Capex Development
| CAPEX (in US$ millions) |
Three months | |||||||||||
| 1Q 2008 |
1Q 2007 |
y-o-y | 4Q 2007 |
q-o-q | ||||||||
| Total capex |
358.5 | 303.5 | 18.1 | % | 795.8 | -55.0 | % | |||||
| Russia |
212.5 | 199.6 | 6.5 | % | 467.2 | -54.5 | % | |||||
| CIS |
146.0 | 103.9 | 40.5 | % | 328.6 | -55.6 | % | |||||
| Kazakhstan |
42.6 | 31.2 | 36.5 | % | 96.4 | -55.8 | % | |||||
| Ukraine |
26.6 | 29.3 | -9.2 | % | 55.2 | -51.8 | % | |||||
| Armenia |
14.6 | 5.4 | 170.4 | % | 44.3 | -67.0 | % | |||||
| Uzbekistan |
48.0 | 7.9 | 507.6 | % | 83.6 | -42.6 | % | |||||
| Tajikistan |
7.2 | 13.5 | -46.7 | % | 20.2 | -64.4 | % | |||||
| Georgia |
7.0 | 16.6 | -57.8 | % | 28.9 | -75.8 | % | |||||
23
 VimpelCom
Q1 Financial and Operating Results June 4 , 2008 th |
 June 2008
VimpelCom Company Presentation 2 © Beeline 2008 Disclaimer This presentation contains "forward-looking statements", as the phrase is defined in
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These statements relate, in part, to the Company’s strategy and development plans. The forward- looking statements are based on management's best assessment of the Company's strategic and
financial position, and future market conditions and trends. These discussions involve risks and
uncertainties. The actual outcome may differ materially from these statements as a result
of unforeseen developments from competition, governmental regulation of the
telecommunications industries in Russia and the CIS, general political uncertainties in
Russia and the CIS and general economic developments in Russia and the CIS, continued
volatility in the world economy, challenges to 3G and Far East tenders and/or litigation
with third parties. The actual outcome may also differ materially if the Company is
unable to obtain all necessary corporate approvals relating to its business (including
approval of funding and specific transactions), if the Company is unable to successfully
integrate newly-acquired businesses, including Golden Telecom, and other factors.
There can be no assurance that these risks and uncertainties will not have a material adverse effect on the Company, that the Company will be able to grow or that it will be successful in executing its strategy and development plans. Certain factors that could cause
actual results to differ materially from those discussed in any forward-looking statements
include the risks described in the Company's Annual Report on Form 20-F for the year
ended December 31, 2007 and other public filings made by the Company with the United
States Securities and Exchange Commission, which risk factors are incorporated herein by
reference. The Company disclaims any obligation to update developments of these risk
factors or to announce publicly any revision to any of the forward-looking statements
contained in this release, or to make corrections to reflect future events or
developments. |
 June 2008
VimpelCom Company Presentation 3 © Beeline 2008 Participants Presentation Elena Shmatova, CFO Alexander Izosimov, CEO Q&A Session will be joined by: Nikolay Pryanishnikov, Executive VP, General Director, Russia Kent McNeley, CMO Jean-Pierre Vandromme, Executive VP, Network Resources Management, CEO of Golden Telecom |
 June 2008
VimpelCom Company Presentation 4 © Beeline 2008 Q1 2008 in Brief • Strong financial performance with focus on margins • Completion of Golden Telecom transaction • Continued growth in the CIS, although affected by economic problems in Central Asian countries |
 June 2008
VimpelCom Company Presentation 5 © Beeline 2008 Quarterly Financial Dynamics +117.0% 198 277 359 458 368 601 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 +41.7% 1,451 1,488 1,717 1,956 2,010 2,108 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Net Revenues, $ mln Net Income, $ mln OIBDA, $ mln OIBDA Margin +47.0% 1,126 918 1,015 897 766 690 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 47.5% 51.5% 52.2% 51.9% 45.7% 53.4% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 6 © Beeline 2008 Stock Price Based Compensation Plans Accruals and ADS Price -42.7 15.1 21.3 40.5 24.2 118.7 27.8 6.8 3.2 8.60 9.16 12.12 15.79 18.97 21.07 29.89 41.60 27.04 -43 -3 37 77 117 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 -15 0 15 30 45 Accruals, US$ M ADS price, ($) |
 June 2008
VimpelCom Company Presentation 7 © Beeline 2008 Continued Increase in Cash Flow * LTM OIBDA constitutes the sum of the lines: LTM Operating income and LTM Depreciation and amortization. LTM stands for “last twelve months” to reporting date. In cases when OIBDA is part of financial ratios it is deemed to be calculated in accordance with the reconciliation tables in the Company’s earnings release ($ mln) Mar 31, 2008 Dec 31, 2007 Dec 31, 2006 Cash and Cash Equivalents 621 1,004 344 Total Assets 16,026 10,569 8,437 Total Debt 6,678 2,767 2,489 -Short-term 969 527 424 -Long-term 5,709 2,240 2,065 Shareholders' Equity 6,177 5,412 3,943 LTM OIBDA* 3,956 3,597 2,452 - LTM Depreciation and amortization 1,491 1,391 1,055 - LTM Operating Income 2,465 2,206 1,397 LTM Interest 228 195 186 Debt/Equity 1.1 0.5 0.6 Debt/OIBDA LTM 1.7 0.8 1.0 OIBDA/Interest 17.4 18.4 13.2 Debt/Assets 0.42 0.26 0.30 Net Debt 6,057 1,763 2,145 1,293 3,242 3,038 1,971 -1,773 -1,828 -1,512 -1,635 -342 459 1,414 1,265 2005 2006 2007 1Q 08 LTM CAPEX, $ mln Operating Cash Flow, $ mln Free Cash Flow before acquisitions, $ mln |
 June 2008
VimpelCom Company Presentation 8 © Beeline 2008 Sources of Revenue Growth * * Segment revenues exclude inter-company transactions 2,108 1,488 1,940 1,454 34 486 134 168 1Q 07 Mobile Fixed 1Q 08 2,108 1,488 1,278 1,795 313 103 517 210 1Q 07 Russia CIS 1Q 08 |
 June 2008
VimpelCom Company Presentation 9 © Beeline 2008 Russia: Total Operations CAPEX, $ mln * Total revenue adjusted for eliminations Revenue * , $ mln OIBDA, $ mln CAPEX / Revenue LTM 1,797 1675 1460 1279 1281 1702 1653 132 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Mobile Fixed 992 959 871 773 645 676 780 33 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Mobile Fixed 24% 23% 19% 17% 18% 17% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 200 213 189 380 467 217 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 10 © Beeline 2008 Russia: Mobile Highlights Mobile ARPU & MOU Revenue, $ mln OIBDA & OIBDA Margin Active Subscribers, mln 39.8 38.6 40.1 42.2 42.1 41.8 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 1,281 1,279 1,460 1,653 1,702 1,675 0 500 1000 1500 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 959 773 871 780 676 645 50.3% 52.9% 53.4% 52.7% 45.4% 57.2% 0 500 1000 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% OIBDA ($ mln) OIBDA Margin 10.9 10.9 12.3 13.4 13.5 13.2 199 158 161 193 209 204 9 14 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 150 300 ARPU ($) MOU (min) |
 June 2008
VimpelCom Company Presentation 11 © Beeline 2008 Russia: Fixed Revenue Fixed Revenue, $ mln Business Segment, $ mln Wholesale Segment, $ mln Residential Segment, $ mln 376 362 324 273 233 227 244 132 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 GT revenue March 08 40 31 23 13 10 13 26 14 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 192 124 126 132 151 172 193 68 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 144 94 88 90 109 129 139 50 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 12 © Beeline 2008 19.3 17.9 15.9 9.8 6.2 3.2 1.3 13.0 16.9 15.9 15.5 14.1 13.5 14.4 17.1 17.4 2 005 2 006 2007 2008F 2009F 2010F 2011F 2012F With PC & BB PC only Total 54 mln households in Russia Source: J’son & Partners Russia: Residential Broadband Market Forecast Households with PCs and Broadband (mln) Broadband and PC Penetration 6% 12% 18% 24% 29% 33% 36% 35% 38% 38% 43% 50% 58% 63% 67% 2% 0% 20% 40% 60% 80% Broadband users as a % of total households PC users as a % of total households |
 June 2008
VimpelCom Company Presentation 13 © Beeline 2008 Russia: Broadband Development FTTB * Households Passed (mln) & Take-up Rate Broadband Revenue, $ mln Broadband Subscribers, ‘000 Broadband ARPU, $ GT results March 08 17.6 16.7 16.3 16.0 15.2 17.1 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 19 13 10 7 5 15 9 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 428 310 244 183 122 530 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 * Fiber-to-the-Building 3.8 3.0 2.6 2.3 2.0 4.1 8.4% 8.0% 8.9% 10.3% 6.9% 5.6% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% Take-up rate, % |
 June 2008
VimpelCom Company Presentation 14 © Beeline 2008 Composition of CIS Business Revenue, $ mln CAPEX, $ mln OIBDA, $ mln 82.0 3.2 20.9 29.1 -2.2 134.3 1.3 1 2 3 4 5 6 7 316.9 39.5 44.8 162.9 59.1 8.4 2.4 1 2 3 4 5 6 7 26.6 14.6 42.6 48.0 7.0 146.0 7.2 CIS Total Georgia Tajikistan Uzbekistan Ukraine Armenia Kazakhstan |
 June 2008
VimpelCom Company Presentation 15 © Beeline 2008 Kazakhstan: Operating & Financial Highlights Net Revenues, $ mln Capex / Revenue (LTM) Mobile Active Subscribers, mln Mobile ARPU & MOU 3.9 4.3 4.8 3.5 3.1 4.6 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 163 113 119 149 167 175 162 50.3% 52.8% 52.7% 53.7% 51.9% 31.6% 60.00 80.00 100.00 120.00 140.00 160.00 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Mobile Fixed OIBDA Margin 50% 41% 37% 30% 35% 34% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 12.2 11.6 13.0 13.6 13.6 13.8 99 99 113 89 72 78 10 12 14 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 0 20 40 60 80 100 120 140 ARPU ($) MOU (min) |
 June 2008
VimpelCom Company Presentation 16 © Beeline 2008 Ukraine: Operating & Financial Highlights Mobile ARPU & MOU Mobile Active Subscribers, mln Net Revenues ($ mln) & OIBDA Margin Capex / Revenue (LTM) 1.5 2.0 1.8 2.2 2.0 1.9 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 44.8 36.4 34.5 37.0 23.8 16.3 14.8 8.9 -71.3% -40.0% -12.9% 17.5% 10.5% 7.2% -45 -30 -15 0 15 30 45 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 -120.0% -70.0% -20.0% 30.0% 80.0% Mobile Fixed OIBDA Margin 6.1 4.2 3.0 4.2 5.8 5.6 210 183 168 160 138 149 0 2 4 6 8 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 20 70 120 170 220 ARPU ($) MOU (min) 574% 441% 311% 171% 140% 110% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 17 © Beeline 2008 * 4Q 06 data for 1.5 months ARPU & MOU CAPEX, $ mln Armenia: Operating & Financial Highlights Mobile Active Subscribers, ‘000 Net Revenues * , $ mln 22.9 34.2 36.2 25.8 23.5 10.5 19.9 23.2 37.6 36.4 16.9 35.2 4Q 06* 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Mobile revenue Fixed revenue 15 44 21 20 5 9 4Q 06* 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 17.4 17.6 17.3 14.5 17.0 16.1 178 141 185 181 172 159 10 16 4Q 06* 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 80 130 180 Mobile ARPU ($) Mobile MOU (min) 416 440 520 471 447 442 4Q 06* 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 18 © Beeline 2008 Drive operations and investment efficiency Drive operations and investment efficiency • Re-balance focus from speed to efficiency and enhance cost transparency as markets mature
• Avoid headcount growth in mature operations and streamline corporate functions • Drive procurement excellence • Optimize capex decisions at a granular level and continuously improve marketing spend
efficiency Build and sustain strong management capabilities Build and sustain strong management capabilities • Offer an open and transparent, meritocracy based environment • Use a global approach to hiring • Develop best-in-class individual development and coaching mechanisms • Ensure competitive, performance based compensation packages • Grow ARPUs through voice and data stimulation with stable pricing • Maintain active base share through specific central and local sales and loyalty programs • Explore consolidation opportunities • Strengthen business segment • Expand geographic presence in fixed-line Extract maximum value Extract maximum value from the Russian business from the Russian business • Focus on active subscribers growth • Replicate unified business platform developed in Russia • Leverage service portfolio implemented in Russia • Pursue acquisitions of mobile assets outside existing markets Grow business outside of Grow business outside of Russia Russia • Build new digital service businesses, including TV, payment services, etc. • Explore new technologies and business models, including advertising-funded models Capture attractive Capture attractive opportunities in adjacent opportunities in adjacent business areas business areas • Aggressively roll-out both FTTB and 3G infrastructures • Cross-sell Internet access products to mobile subscribers • Optimize and up-sell portfolio of fixed and mobile Internet access products Develop the consumer Develop the consumer Internet access business Internet access business Strategy Going Forward |
 June 2008
VimpelCom Company Presentation 19 © Beeline 2008 Progress of Integration with Golden Telecom • Cross-selling opportunities initiated • Corporate databases of VIP and GT merged • Procurement centralized • Traffic routing improved |
 June 2008
VimpelCom Company Presentation 20 © Beeline 2008 Summary • Ongoing strong financial performance • VimpelCom remains a large, fast growing, highly profitable business • Transition to an integrated operator provides further growth opportunities |
 June 2008
VimpelCom Company Presentation 21 © Beeline 2008 Questions and Answers If you would like to ask a question, please press the star key followed by the digit one on your touch-tone telephone. Due to time constraints, we ask that you limit yourselves to one question and one follow-up question. If you are using a speakerphone, please make sure your mute button is turned off to allow your signal to reach the equipment. ---------- Thank you for your interest in VimpelCom For more information please visit www.vimpelcom.com or contact Investor_Relations@vimpelcom.com |
 June 2008
VimpelCom Company Presentation 22 © Beeline 2008 APPENDICES |
 June 2008
VimpelCom Company Presentation 23 © Beeline 2008 CIS Mobile: Financial Highlights Kazakhstan Ukraine Uzbekistan Revenue, $ mln OIBDA, $ mln Armenia * The 4Q 2006 data represent the results of operations for 1.5 months since the date of acquisition by VimpelCom Tajikistan Georgia 36 16 18 23 30 37 39 113 119 149 167 175 162 15 24 37 35 16 1 4 6 -3 -7 -11 21 18 17 11 9 8 36 62 80 88 92 82 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 0 0 8.4 2.4 0.9 0.3 0.2 2.9 8.1 7.7 5.2 0.8 23 23 26 23 20 10 10 10 13 12 11 6 -0.5 -1.2 -1.9 -2.0 -2.3 -2.2 -1.1 -0.3 0.1 1.6 1.4 1.3 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 24 © Beeline 2008 CIS Mobile: Active Subscribers, mln Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia 1.5 2.0 1.8 2.2 1.9 2.0 0.7 1.1 1.2 1.6 2.1 2.4 3.1 3.5 3.9 4.3 4.6 4.8 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 0.07 0.15 0.20 0.27 0.34 0.38 0.00 0.01 0.01 0.03 0.07 0.15 0.52 0.44 0.45 0.47 0.44 0.42 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 |
 June 2008
VimpelCom Company Presentation 25 © Beeline 2008 11.6 13.0 13.6 13.6 12.2 13.8 6.1 5.6 5.8 4.2 3.0 4.2 5.8 6.8 7.6 7.2 6.7 9.8 265 283 290 266 242 269 210 183 168 160 138 149 99 99 113 89 78 72 0.0 6.0 12.0 18.0 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 0 70 140 210 280 17.3 17.6 17.4 14.5 16.2 8.0 17.0 7.4 9.0 6.3 4.8 3.2 9.0 10.8 10.1 8.7 9.0 141 178 185 181 172 159 188 206 224 230 216 206 48 83 85 122 87 0.0 6.0 12.0 18.0 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 0 70 140 210 280 ARPU ($) MOU (min) CIS Mobile: ARPU & MOU Development Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia |
 June 2008
VimpelCom Company Presentation 26 © Beeline 2008 CIS Mobile: Subscriber Market Shares* Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia * Source: AC&M Consulting. The drop in reported market share is mainly caused by the change of reporting methodology to active subscriber base 5% 5% 47% 40% 47% 49% 49% 50% 47% 54% 47% 46% 45% 46% 6% 7% 5% 6% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 VIP K'Cell Others 5% 4% 5% 4% 5% 5% 43% 43% 42% 43% 43% 43% 36% 35% 37% 39% 40% 41% 11% 11% 12% 14% 16% 17% 1% 1% 1% 1% 1% 1% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 VIP Kyivstar UMC (MTS) Astelit Others 33% 33% 27% 37% 34% 36% 52% 54% 51% 48% 49% 50% 14% 12% 11% 11% 9% 14% 8% 4% 4% 3% 3% 3% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 VIP Uzdunrobita Coscom Other 27% 26% 34% 34% 37% 38% 73% 74% 62% 63% 66% 66% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 VIP Vivocell 17% 16% 18% 7% 11% 15% 10% 6% 7% 14% 13% 12% 75% 78% 73% 73% 76% 79% 0% 30% 60% 90% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 VIP TT Mobile Others 1.0% 0.4% 0.0% 3.7% 5.3% 1.6% 53% 53% 53% 51% 51% 52% 47% 47% 46% 46% 44% 45% 4Q06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 VIP Geocell Magticom |
 June 2008
VimpelCom Company Presentation 27 © Beeline 2008 Currency 10.0% 16.8% -4.0% -0.5% 0.0% 3.7% 8.4% Change from Q1 07 4.2% 3.1% -1.0% -0.1% 0.0% 0.3% 1.6% Change from Q4 07 Average quarterly FX rate to US$ 7.8% GEL Change from 2007 -0.9% AMD -0.8% UZS 0.9% TJS 0.0% UAH -0.1% KZT 4.4% RUB Closing FX rate to US$ * Source: Prime TASS, National Banks of the CIS countries FOREX Development |
 June 2008
VimpelCom Company Presentation 28 © Beeline 2008 Reconciliation of Consolidated OIBDA and OIBDA Margin (Unaudited) ($'000) March 31, 2008 Dec 31, 2007 Sept 30, 2007 June 30, 2007 March 31, 2007 Dec 31, 2006 OIBDA 1,126 918 1,016 897 766 690 Depreciation (357) (331) (286) (285) (269) (265) Amortization (67) (56) (56) (54) (53) (50) Operating Income 702 531 674 558 444 375 OIBDA margin 53.4% 45.7% 51.9% 52.2% 51.5% 47.5% Less: Depreciation as % of net operating revenues (16.9%) (16.5%) (14.5%) (16.6%) (18.1%) (18.3%) Less: Amortization as % of net operating revenues (3.2%) (2.8%) (2.9%) (3.1%) (3.6%) (3.4%) Operating Income 33.3% 26.4% 34.5% 32.5% 29.8% 25.8% Reconciliation of OIBDA to operating income Reconciliation of OIBDA margin to operating income as percentage of net operating revenue Three months ended |
 June 2008
VimpelCom Company Presentation 29 © Beeline 2008 Definitions Active mobile subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remain in the base at the end of the reported
period. Such activities include all incoming and outgoing calls, subscriber fee accruals, debits related to service, outgoing SMS, MMS, data transmission and receipt sessions, but do not include incoming SMS and MMS sent by our Company or abandoned
calls. ARPU (Monthly Average Revenue per User), a non-U.S. GAAP financial measure, is calculated by
dividing the Company’s service revenue during the relevant period, including
roaming revenue and interconnect revenue, but excluding revenue from connection fees,
sales of handsets and accessories and other non-service revenue, by the average number of the Company’s active subscribers during the period and dividing by the number of months in that period.
Reconciliation of ARPU to service revenues and connection fees, the most directly
comparable U.S. GAAP financial measure, is presented above in the tables section.
The Company believes that ARPU provides useful information to investors because it is an indicator of the performance of the Company’s business operations and assists management in budgeting. The
Company also believes that ARPU provides management with useful information concerning
usage and acceptance of the Company’s services. ARPU should not be viewed in
isolation or an alternative to other figures reported under U.S. GAAP. Average quarterly FX rate to US$ for the CIS countries is calculated as the sum of average exchange rates for each month within a quarter divided by three months Broadband internet service subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remained in the base at the end of the
reported period. Such activities include monthly internet access using FTTB, xDSL and WiFi technologies Free cash flow is calculated as operating cash flow minus accrued capital expenditures before acquisitions
FTTB – Fiber-to-the-building broadband internet technology Market share of subscribers for each country is calculated by dividing the estimated number of the subscribers
of a particular company by the total estimated number of subscribers in that country.
Market share data is published by consulting agencies specializing in the
telecommunications industry in Russia. Mobile subscriber is an authorized user of cellular services, using one SIM card (GSM/3G) with one or several selective numbers or one handset (DAMPS/CDMA) with one selective number. The number of subscribers
includes employees using cellular services and excludes guest roamers and users of test
SIM cards or handsets. MOU (Monthly Average Minutes of Use per User) is calculated by dividing the total number of minutes of
usage for incoming and outgoing calls during the relevant period (excluding guest
roamers) by the average number of active subscribers during the period and dividing by
the number of months in that period. Net debt is calculated as a total interest-bearing debt minus cash and cash equivalents
|
VIP-Group
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
1,488 | 1,717 | 1,956 | 2,010 | 2,108 | ||||||||||
| OIBDA |
766 | 897 | 1,016 | 918 | 1,126 | ||||||||||
| OIBDA, % |
51.5 | % | 52.2 | % | 51.9 | % | 45.7 | % | 53.4 | % | |||||
| SG&A |
439 | 494 | 557 | 716 | 528 | ||||||||||
| including Sales & marketing expenses |
136 | 167 | 186 | 219 | 187 | ||||||||||
| including General & administrative costs |
303 | 327 | 371 | 497 | 341 | ||||||||||
| SG&A, % |
29.5 | % | 28.8 | % | 28.5 | % | 35.6 | % | 25.0 | % | |||||
| Net Income |
277 | 359 | 458 | 368 | 601 | ||||||||||
| Capital Expenditures |
303.5 | 334.8 | 338.8 | 795.8 | 358.5 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
1,454 | 1,682 | 1,918 | 1,974 | 1,944 | ||||||||||
| including Mobile Interconnect |
209 | 241 | 270 | 303 | 309 | ||||||||||
| Mobile OIBDA |
750 | 878 | 996 | 896 | 1,071 | ||||||||||
| Mobile OIBDA, % |
51.6 | % | 52.2 | % | 51.9 | % | 45.4 | % | 55.1 | % | |||||
| Active Subscribers (‘000) |
45,784 | 47,702 | 50,686 | 51,740 | 52,293 | ||||||||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Fixed Revenue |
34.2 | 35.2 | 37.6 | 36.3 | 175.1 | ||||||||||
| including business segment |
0.0 | 0.0 | 0.0 | 0.0 | 74.5 | ||||||||||
| including wholesale segment |
0.0 | 0.0 | 0.0 | 0.0 | 50.8 | ||||||||||
| including residential segment |
34.2 | 35.2 | 37.6 | 36.3 | 49.8 | ||||||||||
| Fixed OIBDA |
16.2 | 18.5 | 19.5 | 22.8 | 54.6 | ||||||||||
| Fixed OIBDA, % |
47.4 | % | 52.6 | % | 51.9 | % | 62.8 | % | 31.2 | % | |||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 534 | ||||||||||
| Broadband services ARPU, US$ |
n/a | n/a | n/a | n/a | n/a | ||||||||||
| Reconciliation of OIBDA total |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| OIBDA |
766 | 897 | 1,016 | 918 | 1,126 | ||||||||||
| Depreciation |
(269 | ) | (285 | ) | (286 | ) | (331 | ) | (357 | ) | |||||
| Amortization |
(53 | ) | (54 | ) | (56 | ) | (56 | ) | (67 | ) | |||||
| Operating income |
444 | 558 | 674 | 531 | 702 | ||||||||||
| OIBDA margin total |
51.5 | % | 52.2 | % | 51.9 | % | 45.7 | % | 53.4 | % | |||||
| Less: Depreciation as a percentage of net operating revenue |
(18.1 | )% | (16.6 | )% | (14.5 | )% | (16.5 | )% | (16.9 | )% | |||||
| Less: Amortization as a percentage of net operating revenue |
(3.6 | )% | (3.1 | )% | (2.9 | )% | (2.8 | )% | (3.2 | )% | |||||
| Operating income as a percentage of net operating revenue |
29.8 | % | 32.5 | % | 34.5 | % | 26.4 | % | 33.3 | % | |||||
Russia
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
1,279 | 1,460 | 1,653 | 1,702 | 1,797 | ||||||||||
| OIBDA |
676 | 780 | 871 | 773 | 992 | ||||||||||
| OIBDA, % |
52.9 | % | 53.4 | % | 52.7 | % | 45.4 | % | 55.2 | % | |||||
| SG&A |
375 | 419 | 477 | 633 | 434 | ||||||||||
| including Sales & Marketing Expenses |
114 | 141 | 159 | 186 | 158 | ||||||||||
| including General & Administrative Costs |
261 | 278 | 318 | 447 | 276 | ||||||||||
| SG&A, % |
29.3 | % | 28.7 | % | 28.9 | % | 37.2 | % | 24.2 | % | |||||
| Net Income |
280 | 356 | 423 | 364 | 616 | ||||||||||
| Capital Expenditures |
199.6 | 189.0 | 216.9 | 467.2 | 212.5 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
1,279 | 1,460 | 1,653 | 1,702 | 1,675 | ||||||||||
| including Mobile Interconnect |
171 | 203 | 224 | 253 | 253 | ||||||||||
| Mobile OIBDA |
676 | 780 | 871 | 773 | 959 | ||||||||||
| Mobile OIBDA, % |
52.9 | % | 53.4 | % | 52.7 | % | 45.4 | % | 57.2 | % | |||||
| Active Subscribers (‘000) |
38,631 | 40,140 | 41,802 | 42,221 | 42,079 | ||||||||||
| ARPU, US$ |
10.9 | 12.3 | 13.4 | 13.5 | 13.2 | ||||||||||
| MOU, min |
161.0 | 193.0 | 209.0 | 204.0 | 199.0 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | 7.5 | 8.1 | 9.1 | % | 9.2 | % | ||||||||
| Subscriber market share, % |
31.2 | % | 30.9 | % | 30.4 | % | 29.9 | % | 25.0 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0 | 0 | 0 | 0 | 132 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 68 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 50 | ||||||||||
| including residential segment |
0 | 0 | 0 | 0 | 14 | ||||||||||
| Fixed OIBDA |
0 | 0 | 0 | 0 | 33 | ||||||||||
| Fixed OIBDA, % |
0 | 0 | 0 | 0 | 25.0 | % | |||||||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 530 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 17.6 | ||||||||||
CIS
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
210.9 | 260.1 | 305.7 | 314.4 | 316.9 | ||||||||||
| OIBDA |
90.0 | 116.9 | 144.0 | 145.2 | 134.3 | ||||||||||
| OIBDA, % |
42.7 | % | 44.9 | % | 47.1 | % | 46.2 | % | 42.4 | % | |||||
| SG&A |
65.1 | 76.4 | 79.4 | 83.9 | 94.3 | ||||||||||
| including Sales & Marketing Expenses |
22.3 | 26.0 | 27.3 | 33.1 | 29.0 | ||||||||||
| including General & Administrative Costs |
42.8 | 50.4 | 52.1 | 50.8 | 65.3 | ||||||||||
| SG&A, % |
30.9 | % | 29.4 | % | 26.0 | % | 26.7 | % | 29.8 | % | |||||
| Net Income |
-3.1 | 3.7 | 35.6 | 4.6 | -14.3 | ||||||||||
| Capital Expenditures |
103.9 | 145.8 | 121.9 | 328.6 | 146.0 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
176.7 | 224.9 | 268.1 | 278.1 | 270.8 | ||||||||||
| including Mobile Interconnect |
38.1 | 37.7 | 45.3 | 50.4 | 47.0 | ||||||||||
| Mobile OIBDA |
73.8 | 98.4 | 124.5 | 122.4 | 112.8 | ||||||||||
| Mobile OIBDA, % |
41.8 | % | 43.8 | % | 46.4 | % | 44.0 | % | 41.7 | % | |||||
| Active Subscribers (‘000) |
7,153 | 7,562 | 8,884 | 9,519 | 10,214 | ||||||||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
34.2 | 35.2 | 37.6 | 36.3 | 47.0 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 6.6 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 3.9 | ||||||||||
| including residential segment |
34.2 | 35.2 | 37.6 | 36.3 | 36.5 | ||||||||||
| Fixed OIBDA |
16.2 | 18.5 | 19.5 | 22.8 | 21.5 | ||||||||||
| Fixed OIBDA, % |
47.4 | % | 52.6 | % | 51.9 | % | 62.8 | % | 45.7 | % | |||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 4 | ||||||||||
| Broadband services ARPU, US$ |
n/a | n/a | n/a | n/a | n/a | ||||||||||
Kazakhstan
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
119.4 | 149.3 | 167.1 | 174.6 | 162.8 | ||||||||||
| OIBDA |
62.0 | 80.3 | 88.1 | 92.2 | 82.0 | ||||||||||
| OIBDA, % |
51.9 | % | 53.8 | % | 52.7 | % | 52.8 | % | 50.4 | % | |||||
| SG&A |
25.4 | 31.7 | 32.7 | 33.8 | 34.8 | ||||||||||
| including Sales & Marketing Expenses |
11.0 | 14.2 | 13.8 | 17.1 | 12.9 | ||||||||||
| including General & Administrative Costs |
14.4 | 17.5 | 18.9 | 16.7 | 21.9 | ||||||||||
| SG&A, % |
21.3 | % | 21.2 | % | 19.6 | % | 19.4 | % | 21.4 | % | |||||
| Net Income |
13.1 | 16.4 | 21.7 | 19.8 | 14.1 | ||||||||||
| Capital Expenditures |
31.2 | 45.8 | 40.5 | 96.4 | 42.6 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
119.4 | 149.3 | 167.1 | 174.6 | 162.1 | ||||||||||
| including Mobile Interconnect |
20.5 | 26.5 | 28.5 | 33.0 | 28.4 | ||||||||||
| Mobile OIBDA |
62.0 | 80.3 | 88.1 | 92.2 | 81.6 | ||||||||||
| Mobile OIBDA, % |
51.9 | % | 53.8 | % | 52.7 | % | 52.8 | % | 50.3 | % | |||||
| Active Subscribers (‘000) |
3,501 | 3,858 | 4,343 | 4,603 | 4,777 | ||||||||||
| ARPU, US$ |
12.2 | 13.6 | 13.6 | 13.0 | 11.6 | ||||||||||
| MOU, min |
72.3 | 88.8 | 112.7 | 98.9 | 99.1 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | n/a | n/a | 9.8 | % | 9.5 | % | ||||||||
| Subscriber market share, % |
50.2 | % | 49.3 | % | 47.3 | % | 46.5 | % | 39.5 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0 | 0 | 0 | 0 | 1.1 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 0.3 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 0.8 | ||||||||||
| including residential segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Fixed OIBDA |
0 | 0 | 0 | 0 | 0.4 | ||||||||||
| Fixed OIBDA, % |
0 | 0 | 0 | 0 | 36.4 | % | |||||||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 0 | ||||||||||
Ukraine
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
16.3 | 23.8 | 37.0 | 34.5 | 44.8 | ||||||||||
| OIBDA |
-6.5 | -3.1 | 6.5 | 3.6 | 3.2 | ||||||||||
| OIBDA, % |
n/a | n/a | 17.6 | % | 10.4 | % | 7.1 | % | |||||||
| SG&A |
16.0 | 16.5 | 16.5 | 17.5 | 23.4 | ||||||||||
| including Sales & Marketing Expenses |
5.8 | 5.5 | 5.3 | 5.2 | 6.7 | ||||||||||
| including General & Administrative Costs |
10.2 | 11.0 | 11.2 | 12.3 | 16.7 | ||||||||||
| SG&A, % |
98.2 | % | 69.3 | % | 44.6 | % | 50.7 | % | 52.2 | % | |||||
| Net Income |
-18.4 | -17.2 | -6.4 | -17.6 | -19.7 | ||||||||||
| Capital Expenditures |
29.3 | 46.0 | 26.0 | 55.2 | 26.6 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
16.3 | 23.8 | 37.0 | 34.5 | 36.4 | ||||||||||
| including mobile interconnect |
5.4 | 7.6 | 10.9 | 10.9 | 11.5 | ||||||||||
| Mobile OIBDA |
-6.5 | -3.1 | 6.5 | 3.6 | 1.1 | ||||||||||
| Mobile OIBDA, % |
n/a | n/a | 17.6 | % | 10.4 | % | 3.0 | % | |||||||
| Active Subscribers (‘000) |
1,953 | 1,822 | 2,212 | 1,941 | 1,971 | ||||||||||
| ARPU, US$ |
3.0 | 4.2 | 5.8 | 5.6 | 6.1 | ||||||||||
| MOU, min |
138.0 | 159.9 | 168.2 | 183.2 | 210.2 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | n/a | n/a | 35.8 | % | 20.1 | % | ||||||||
| Subscriber market share, % |
4.5 | % | 5.2 | % | 5.1 | % | 4.8 | % | 3.5 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0 | 0 | 0 | 0 | 8.9 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 5.6 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 3.1 | ||||||||||
| including residential segment |
0 | 0 | 0 | 0 | 0.2 | ||||||||||
| Fixed OIBDA |
0 | 0 | 0 | 0 | 2.1 | ||||||||||
| Fixed OIBDA, % |
0 | 0 | 0 | 0 | 23.6 | % | |||||||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 4 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 39.4 | ||||||||||
Uzbekistan
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
18.2 | 23.2 | 30.2 | 36.5 | 39.5 | ||||||||||
| OIBDA |
8.7 | 11.4 | 16.9 | 17.8 | 20.9 | ||||||||||
| OIBDA, % |
47.8 | % | 49.1 | % | 56.0 | % | 48.8 | % | 52.9 | % | |||||
| SG&A |
6.4 | 8.4 | 8.7 | 13.1 | 12.3 | ||||||||||
| including Sales & Marketing Expenses |
2.8 | 2.5 | 3.9 | 5.3 | 4.9 | ||||||||||
| including General & Administrative Costs |
3.6 | 5.9 | 4.8 | 7.8 | 7.4 | ||||||||||
| SG&A, % |
35.2 | % | 36.2 | % | 28.8 | % | 35.9 | % | 31.1 | % | |||||
| Net Income |
2.5 | 4.3 | 6.9 | 6.0 | 7.5 | ||||||||||
| Capital Expenditures |
7.9 | 18.5 | 23.8 | 83.6 | 48.0 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
18.2 | 23.2 | 30.2 | 36.5 | 38.7 | ||||||||||
| including Mobile Interconnect |
0.002 | 0.003 | 0.004 | 0.005 | 0.006 | ||||||||||
| Mobile OIBDA |
8.7 | 11.4 | 16.9 | 17.8 | 20.6 | ||||||||||
| Mobile OIBDA, % |
47.8 | % | 49.1 | % | 56.0 | % | 48.8 | % | 53.2 | % | |||||
| Active Subscribers (‘000) |
1,106.3 | 1,192.4 | 1,586.9 | 2,119.6 | 2,422.2 | ||||||||||
| ARPU, US$ |
6.7 | 7.2 | 7.6 | 6.8 | 5.8 | ||||||||||
| MOU, min |
242.2 | 265.6 | 289.8 | 283.4 | 265.3 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | n/a | n/a | 11.2 | % | 12.8 | % | ||||||||
| Subscriber market share, % |
33.1 | % | 32.7 | % | 35.6 | % | 37.3 | % | 33.6 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0 | 0 | 0 | 0 | 0.8 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 0.7 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 0.03 | ||||||||||
| including residential segment |
0 | 0 | 0 | 0 | 0.06 | ||||||||||
| Fixed OIBDA |
0 | 0 | 0 | 0 | 0.3 | ||||||||||
| Fixed OIBDA, % |
0 | 0 | 0 | 0 | 37.5 | % | |||||||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 0 | ||||||||||
Armenia
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
54.1 | 58.4 | 63.4 | 59.8 | 59.1 | ||||||||||
| OIBDA |
27.3 | 30.1 | 32.9 | 32.5 | 29.1 | ||||||||||
| OIBDA, % |
50.5 | % | 51.5 | % | 51.9 | % | 54.3 | % | 49.2 | % | |||||
| SG&A |
14.2 | 14.8 | 15.9 | 13.4 | 16.7 | ||||||||||
| including Sales & Marketing Expenses |
1.7 | 2.2 | 2.4 | 3.5 | 2.7 | ||||||||||
| including General & Administrative Costs |
12.5 | 12.6 | 13.5 | 9.9 | 14.0 | ||||||||||
| SG&A, % |
26.2 | % | 25.3 | % | 25.1 | % | 22.4 | % | 28.3 | % | |||||
| Net Income |
2.6 | 4.0 | 16.0 | 0.3 | -15.0 | ||||||||||
| Capital Expenditures |
5.4 | 20.4 | 20.7 | 44.3 | 14.6 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
19.9 | 23.2 | 25.8 | 23.5 | 22.9 | ||||||||||
| including Mobile Interconnect |
12.0 | 3.2 | 4.1 | 4.2 | 4.5 | ||||||||||
| Mobile OIBDA |
11.1 | 11.6 | 13.4 | 9.7 | 10.4 | ||||||||||
| Mobile OIBDA, % |
55.8 | % | 50.0 | % | 51.9 | % | 41.3 | % | 45.4 | % | |||||
| Active Subscribers (‘000) |
439.9 | 471.0 | 447.0 | 442.5 | 520.4 | ||||||||||
| ARPU, US$ |
14.5 | 17.3 | 17.6 | 17.4 | 16.1 | ||||||||||
| MOU, min |
141.3 | 185.1 | 181.0 | 171.8 | 158.9 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | n/a | n/a | 12.3 | % | 28.8 | % | ||||||||
| Subscriber market share, % |
37.3 | % | 33.5 | % | 33.6 | % | 26.1 | % | 26.9 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
34.2 | 35.2 | 37.6 | 36.3 | 36.2 | ||||||||||
| Fixed OIBDA |
16.2 | 18.5 | 19.5 | 22.8 | 18.7 | ||||||||||
| Fixed OIBDA, % |
47.4 | % | 52.6 | % | 51.9 | % | 62.8 | % | 51.7 | % | |||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 0 | ||||||||||
Tajikistan
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
2.9 | 5.2 | 7.7 | 8.1 | 8.4 | ||||||||||
| OIBDA |
-0.3 | 0.1 | 1.6 | 1.4 | 1.3 | ||||||||||
| OIBDA, % |
n/a | 1.9 | % | 20.8 | % | 17.3 | % | 15.5 | % | ||||||
| SG&A |
1.9 | 3.1 | 3.5 | 3.5 | 4.0 | ||||||||||
| including Sales & Marketing Expenses |
0.8 | 1.3 | 1.5 | 1.4 | 1.2 | ||||||||||
| including General & Administrative Costs |
1.1 | 1.8 | 2.0 | 2.1 | 2.8 | ||||||||||
| SG&A, % |
65.5 | % | 59.6 | % | 45.5 | % | 43.2 | % | 47.6 | % | |||||
| Net Income |
-1.0 | -1.8 | -0.3 | -2.5 | -1.2 | ||||||||||
| Capital Expenditures |
13.5 | 5.7 | 6.1 | 20.2 | 7.2 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
2.9 | 5.2 | 7.7 | 8.1 | 8.4 | ||||||||||
| including Mobile Interconnect |
0.2 | 0.4 | 1.7 | 2.1 | 2.0 | ||||||||||
| Mobile OIBDA |
-0.3 | 0.1 | 1.6 | 1.4 | 1.3 | ||||||||||
| Mobile OIBDA, % |
n/a | 1.9 | % | 20.8 | % | 17.3 | % | 15.5 | % | ||||||
| Active Subscribers (‘000) |
145.3 | 204.9 | 268.4 | 339.4 | 377.9 | ||||||||||
| ARPU, US$ |
8.7 | 10.1 | 10.8 | 9.0 | 8.0 | ||||||||||
| MOU, min |
205.8 | 224.2 | 230.3 | 216.3 | 205.8 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | n/a | n/a | 5.3 | % | 8.6 | % | ||||||||
| Subscriber market share, % |
11.2 | % | 15.2 | % | 16.7 | % | 18.1 | % | 15.9 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0 | 0 | 0 | 0 | 0 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| including residential segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Fixed OIBDA |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Fixed OIBDA, % |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 0 | ||||||||||
Georgia
(in US$ millions, unless stated otherwise)
| CONSOLIDATED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0.03 | 0.2 | 0.3 | 0.9 | 2.4 | ||||||||||
| OIBDA |
-1.2 | -1.9 | -2.0 | -2.3 | -2.2 | ||||||||||
| OIBDA, % |
n/a | n/a | n/a | n/a | n/a | ||||||||||
| SG&A |
1.2 | 1.9 | 2.1 | 2.6 | 3.0 | ||||||||||
| including Sales & Marketing Expenses |
0.2 | 0.3 | 0.4 | 0.6 | 0.6 | ||||||||||
| including General & Administrative Costs |
1.0 | 1.6 | 1.7 | 2.0 | 2.4 | ||||||||||
| SG&A, % |
n/a | 800.0 | % | 566.7 | % | 222.2 | % | 100.0 | % | ||||||
| Net Income |
-1.9 | -2.0 | -2.3 | -1.4 | 0.1 | ||||||||||
| Capital Expenditures |
16.6 | 9.4 | 4.8 | 28.9 | 7.0 | ||||||||||
| MOBILE |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0.03 | 0.2 | 0.3 | 0.9 | 2.4 | ||||||||||
| including Mobile Interconnect |
0 | 0 | 0.1 | 0.2 | 0.6 | ||||||||||
| Mobile OIBDA |
-1.2 | -1.9 | -2 | -2.3 | -2.2 | ||||||||||
| Mobile OIBDA, % |
n/a | n/a | n/a | n/a | n/a | ||||||||||
| Active Subscribers (‘000) |
7.3 | 14.0 | 26.6 | 72.7 | 146.2 | ||||||||||
| ARPU, US$ |
3.2 | 4.8 | 6.3 | 9.0 | 7.4 | ||||||||||
| MOU, min |
47.9 | 82.5 | 85.1 | 121.5 | 87.1 | ||||||||||
| Churn 3 months active base (quarterly), % |
n/a | n/a | n/a | 17.6 | % | 1.4 | % | ||||||||
| Subscriber market share, % |
0.4 | % | 0.8 | % | 1.6 | % | 3.7 | % | 5.3 | % | |||||
| FIXED |
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Q1 2008 | ||||||||||
| Net operating revenue |
0 | 0 | 0 | 0 | 0 | ||||||||||
| including business segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| including wholesale segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| including residential segment |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Fixed OIBDA |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Fixed OIBDA, % |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband internet service subscribers (‘000) |
0 | 0 | 0 | 0 | 0 | ||||||||||
| Broadband services ARPU, US$ |
0 | 0 | 0 | 0 | 0 | ||||||||||