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VimpelCom posts 2013 loss

VEE has posted a year on year drop in revenue for the first quarter of 2014

Russia-based operator group VimpelCom has posted a $1.4bn net loss as well as a two per cent year on year decline in revenue for the full year 2013. The operator blamed the impact of regulation, market slowdown and non-cash impairments related to operations in Ukraine and Canada for the poor performance.

The group’s revenue for the year stood at $22.55bn, down year on year from the $23.06bn generated in 2012. The net loss of $1.4bn compares with a net profit of $1.54bn a year earlier.

Organic revenue fell by single percentage points year on year for the firm’s business units in Italy, Africa and Asia and the Ukraine. Only Russia (two per cent) and CIS (12 per cent) saw rises in revenue for the full year.

The firm wrote down its assets in Canada, mainly relating to the challenges it is facing in the country, it said. It is a key shareholder in Canadian operator Wind Mobile, which was forced to pull out of the country’s 700MHz spectrum auction, after Vimpelcom withdrew its support to enter the auction. It is reassessing the prospects for continuing operations in the country. The value of the impairment charge in Canada was £768m.

The impairment on the firm’s assets in Ukraine was largely related to political instability, macro-economic developments, an increase in the country’s risk premium and weakened operational performance. The value of the impairment charge in Ukraine was £2.09bn.

“The net loss in the fourth quarter, and for 2013, was due to non-cash impairment charges taken on our assets in Ukraine and Canada,” said CEO Jo Lunder. “The underlying performance in 2013 was stable, with a small increase in our Group EBITDA margin to 42.7 per cent, highlighting our continuing focus on cost control and the benefits resulting from procurement savings. Operating cash flows of $5.4bn for the year remained strong.”

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