-- 71% year-on-year increase in net operating revenues --
-- 78% year-on-year increase in net income --
-- approximately 10.4 million subscribers as of today --
Moscow and New York (November 20, 2003) - Open Joint Stock Company "Vimpel-Communications" ("VimpelCom" or the "Company") (NYSE: VIP), a leading provider of wireless telecommunications services in Russia, today announced its financial and operating results for the quarter and nine months ended September 30, 2003. During the third quarter of 2003, VimpelCom showed strong subscriber growth and substantial improvement in net operating revenues and net income. These positive trends characterized the Company's growth both in Moscow and in the regions, with the regions growing faster than Moscow. Consolidated financial statements of VimpelCom and consolidated financial statements of VimpelCom-Region, VimpelCom's subsidiary for regional development, are attached.
For the quarter ended September 30, 2003, VimpelCom reported net operating revenues of $379.0 million, a 71.4% increase from the $221.1 million reported for the same period in 2002; OIBDA of $178.5 million, a 74.0% increase from the $102.6 million reported for the same period in 2002; and net income of $72.2 million, an increase of 78.3% from the $40.5 million reported for the same period in 2002. The Company's OIBDA margin for the third quarter of 2003 was approximately 47.1% compared to approximately 46.4% for the same period of 2002. OIBDA, previously referred to as EBITDA by the Company, is defined as operating income before depreciation and amortization. OIBDA margin is defined as OIBDA expressed as a percentage of net operating revenues. For more details, see note 1 to the table "Key Financial and Operating Indicators."
Net operating revenues, excluding inter-company transactions, for the Moscow license area and the regions in the third quarter of 2003 were $259.7 million and $119.3 million, respectively. Net income, excluding inter-company transactions, for the Moscow license area and the regions in the third quarter of 2003 was $61.6 million and $17.9 million, respectively.
As of September 30, 2003, there were approximately 9.26 million subscribers on wireless networks operated by VimpelCom and its subsidiaries, an increase of approximately 130% compared to September 30, 2002, including approximately 5.08 million subscribers in the Moscow license area and approximately 4.18 million subscribers in the regions. As of today, there are approximately 10.37 million subscribers on wireless networks operated by VimpelCom and its subsidiaries, with approximately 5.39 million subscribers in the Moscow license area and approximately 4.98 million subscribers in the regions.
Based on independent sources, VimpelCom estimates that its market share in the Moscow license area was 49.0% as of September 30, 2003, compared to 52.7% as of September 30, 2002 and that its overall market share in Russia was 31.0% as of September 30, 2003, compared to 26.5% as of September 30, 2002.
Commenting on today's announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, "We are very pleased with our third quarter results. Subscriber growth continued to beat market expectations and our financial figures again showed substantial progress, particularly in the regions. These developments reflect our continued success in executing our expansion strategy which was facilitated by the steady growth in the Russian economy and the positive seasonal effects typical for the third quarter." Mr. Izosimov concluded: "VimpelCom intends to continue implementing its market-oriented strategy, focusing on organic growth, innovative product development, efficient marketing and customer satisfaction."
Key Financial and Operating Indicators
|
|
Three months ended |
Nine months ended |
|
Sept. 30,
2003 |
Sept. 30,
2002 |
Change
(%) |
Sept. 30,
2003 |
Sept. 30,
2002 |
Change
(%) |
|
Net operating revenues (US$,000) |
378,981 |
221,077 |
71.4% |
927,858 |
539,518 |
72.0% |
|
OIBDA (US$,000) (1) |
178,472 |
102,567 |
74.0% |
426,337 |
237,594 |
79.4% |
|
OIBDA margin (2) |
47.1% |
46.4% |
- |
45.9% |
44.0% |
- |
|
Gross margin ($,000) (3) |
310,192 |
177,200 |
75.1% |
755,784 |
434,136 |
74.1% |
|
Gross margin percentage (4) |
81.8% |
80.2% |
- |
81.5% |
80.5% |
- |
|
Net income (US$,000) |
72,190 |
40,487 |
78.3% |
166,224 |
90,474 |
83.7% |
|
ARPU(US$) (5) |
14.4 |
19.8 |
-27.3% |
14.1 |
19.4 |
-27.3% |
|
MOU (min) (6) |
92.7 |
97.2 |
-4.6% |
90.0 |
93.8 |
-4.1% |
|
SAC (US$) (7) |
18.8 |
24.6 |
-23.6% |
20.0 |
28.4 |
-29.6% |
Notes:
1. 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. OIBDA calculations are commonly used as some of the bases for 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 tables' section.
2. OIBDA margin is OIBDA expressed as a percentage of net operating revenues. Reconciliation of OIBDA margin to operating income as percentage of net revenues, the most directly comparable U.S. GAAP financial measures, is presented below in the tables' section.
3. Gross margin is defined as net operating revenues less selected operating costs (specifically, service costs, cost of handsets and accessories sold and cost of other revenues).
4. Gross margin percentage is gross margin expressed as a percentage of net operating revenues.
5. ARPU (Monthly Average Revenue per User) is calculated for each month in the relevant period by dividing the Company's service revenue during that month, including roaming revenue, but excluding revenue from connection fees and sales of handsets and accessories, by the average number of the Company's subscribers during the month.
6. MOU (Monthly Average Minutes of Use per User) is calculated for each month of the relevant period by dividing the total number of billable minutes of usage for incoming and outgoing calls during that month (excluding guest roamers) by the average number of subscribers during the month.
7. SAC (Average Acquisition Cost Per User) is calculated as dealer commissions, advertising expenses and handset subsidies for the relevant period divided by the number of gross sales during the relevant period.
Selling, general and administrative expenses ("SG&A") were $126.9 million in the third quarter of 2003, an increase of 85.6% compared to $68.4 million in the same period of 2002. In the third quarter of 2003, SG&A expenses as a percentage of net operating revenues were 33.5% compared to 30.9% in the same period of 2002 and 35.1% in the second quarter of 2003. The Company's average acquisition cost per subscriber (SAC) for the third quarter of 2003 was $18.8 compared to $24.6 in the same period of 2002. The decrease in SAC was primarily attributable to the increase in regional sales as a percentage of total sales, as SAC is lower in the regions due to the relatively lower dealer commissions and larger proportion of sales through the Company's own offices.
VimpelCom's total capital investments for the third quarter of 2003 were approximately $170 million, with $165.3 million of capital expenditures for purchase of property and equipment and $4.3 million for the acquisition of additional shares in a subsidiary. Capital expenditures for the Moscow license area in the third quarter of 2003 were approximately $51 million.
MOU decreased in the third quarter of 2003 to 92.7 minutes, compared to 97.2 minutes in the third quarter of 2002 and 93.8 minutes in the second quarter of 2003. The decrease in MOU was primarily caused by the declining MOU in Moscow as a result of the growing proportion of prepaid subscribers in the Moscow network. ARPU decreased in the third quarter of 2003 by approximately 27.3% to $14.4, compared to $19.8 in the third quarter of 2002, due to a reduction in tariffs as a result of increased competition and the growing proportion of regional subscribers (who generate lower ARPU than Moscow subscribers). However, the seasonal rise in roaming revenues contributed to a slight increase in ARPU in the third quarter compared with the second quarter of 2003 when the Company reported ARPU of $14.3.
Key Subscriber Statistics
|
|
As of
Sept. 30, 2003 |
As of
Sept. 30, 2002 |
Change
Y-on-Y
(%) |
As of
June 30, 2003 |
Change
Q-on-Q
(%) |
|
Moscow license area |
5,076,200 |
3,305,200 |
53.6% |
4,428,800 |
14.6% |
|
Contract |
799,000 |
714,958 |
11.8% |
763,200 |
4.7% |
|
Prepaid |
4,277,200 |
2,590,242 |
65.1% |
3,665,600 |
16.7% |
|
Regions |
4,183,000 |
723,100 |
478.5% |
3,004,800 |
39.2% |
|
Total Number of Subscribers |
9,259,200 |
4,028,300 |
129.9% |
7,433,600 |
24.6% |
|
|
|
Churn (quarterly) |
9.6% |
8.5% |
- |
10.5% |
- |
The Company's regional subscribers increased approximately 478.5% between September 30, 2002 and September 30, 2003 to reach the figure of approximately 4.2 million subscribers, including growth of 39.2% in the third quarter of 2003. The third quarter of 2003 was also marked by a further increase in the number of VimpelCom's prepaid subscribers in the Moscow license area as a percentage of its total subscribers in the Moscow license area, from approximately 82.8% at the end of the second quarter of 2003 to 84.3% at the end of the third quarter of 2003.
The Company's quarterly churn rate in the third quarter of 2003 was 9.6%, compared to 8.5% for the same period in 2002. The increase in churn was primarily the result of high subscriber growth rates in previous periods, particularly in the low-end user segment, as well as internal migration, which is technically regarded as churn, and increased competition. The Company's measures to reduce churn resulted in a decrease in churn in the third quarter of 2003 as compared with the churn figure of 10.5% reported for the second quarter of 2003.
The Company's management will discuss its third quarter 2003 results during a conference call and slide presentation on November 20, 2003 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 https://www.vimpelcom.com. The conference call replay and the slide presentation webcast will be available through November 27, 2003 and December 21, 2003, respectively. The slide presentation will also be available for download on VimpelCom's website https://www.vimpelcom.com.
VimpelCom is a leading provider of telecommunications services in Russia, operating under the "Bee Line" brand, which is one of the most recognized brand names in Russia. The VimpelCom Group's license portfolio covers approximately 92% of Russia's population (134 million people), including the City of Moscow, the Moscow Region and the City of St. Petersburg. 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". VimpelCom's convertible notes are listed on the NYSE under the symbol "VIP 05".
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 development plans. 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 wireless telecommunications industry, general political uncertainties in Russia and general economic developments in Russia, the Company's ability to continue to grow its overall subscriber base, continued volatility in the world economy 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 telecommunications industry 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 the Company's Annual Report on Form 20-F for the year ended December 31, 2002 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:
Valery Goldin
VimpelCom (Moscow)
Tel: 7(095) 974-5888
vgoldin@vimpelcom.com
Christopher Mittendorf
Edelman Financial Worldwide
Tel: 1(212) 704-8134
christopher.mittendorf@edelman.com
- Tables attached -
Open Joint Stock Company "Vimpel-Communications"
Unaudited Condensed Consolidated Statements of Income
|
|
Three months ended
Sept. 30, |
Nine months ended
Sept. 30, |
|
2003 |
2002 |
2003 |
2002 |
|
(In thousands of US dollars , except per share (ADS) amounts) |
|
Operating revenues: |
|
|
|
Service revenues and connection fees |
US$359,815 |
US$211,642 |
US$880,340 |
US$510,723 |
|
Sales of handsets and accessories |
18,337 |
12,098 |
44,719 |
35,366 |
|
Other revenues |
829 |
394 |
2,799 |
1,188 |
|
Total operating revenues |
378,981 |
224,134 |
927,858 |
547,277 |
|
|
Less revenue based taxes |
|
(3,057) |
|
(7,759) |
|
Net operating revenues |
378,981 |
221,077 |
927,858 |
539,518 |
|
|
|
Operating expenses: |
|
|
|
Service costs |
54,300 |
32,841 |
134,234 |
78,143 |
|
Cost of handsets and accessories sold |
14,485 |
11,023 |
37,830 |
27,194 |
|
Cost of other revenues |
4 |
13 |
10 |
45 |
|
Selling, general and administrative expenses |
126,860 |
68,354 |
318,891 |
182,117 |
|
Depreciation and amortization |
51,765 |
26,431 |
133,467 |
67,262 |
|
Provision for doubtful accounts |
4,860 |
6,279 |
10,556 |
14,425 |
|
Total operating expenses |
252,274 |
144,941 |
634,988 |
369,186 |
|
|
|
Operating income |
126,707 |
76,136 |
292,870 |
170,332 |
|
|
|
Other income and expenses: |
|
|
|
Interest income |
1,590 |
2,030 |
5,866 |
5,076 |
|
Loss (gain) on trading in securities |
(4) |
0 |
13 |
58 |
|
Interest expense |
(17,910) |
(13,852) |
(51,907) |
(32,458) |
|
Net foreign exchange gain (loss) |
1,935 |
2,225 |
1,976 |
(7,656) |
|
Other (expenses) income |
(470) |
(937) |
(1,205) |
176 |
|
Total other income and expenses |
(14,859) |
(10,534) |
(45,257) |
(34,804) |
|
|
|
Income before income taxes and minority interest |
111,848 |
65,602 |
247,613 |
135,528 |
|
|
|
Income taxes expense |
32,146 |
24,974 |
70,187 |
44,923 |
|
Minority interest in net earnings of subsidiaries |
7,512 |
141 |
11,202 |
131 |
|
|
|
Net income |
US$72,190 |
US$40,487 |
US$166,224 |
US$90,474 |
|
|
|
Net income per common share |
US$1.89 |
US$1.06 |
US$4.37 |
US$2.38 |
|
Net income per ADS equivalent |
US$1.42 |
US$0.80 |
US$3.28 |
US$1.79 |
|
Weighted average common shares outstanding (thousands) |
38,103 |
38,021 |
38,079 |
38,010 |
|
|
|
|
|
Open Joint Stock Company "Vimpel-Communications"
Unaudited Condensed Consolidated Balance Sheet |
|
|
|
|
Sept. 30,
2003 |
December 31,
2002 |
|
(In thousand US dollars) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
US$272,950 |
US$263,657 |
|
Trade accounts receivable |
94,592 |
75,399 |
|
Other current assets |
212,938 |
149,309 |
|
Total current assets |
580,480 |
488,365 |
|
|
|
Non-current assets: |
|
|
Property and equipment, net |
1,310,007 |
957,602 |
|
Other intangible assets, net |
55,796 |
55,730 |
|
|
|
|
|
Telecommunication licenses and allocation of frequencies, net |
104,825 |
88,385 |
|
Other assets |
113,489 |
102,662 |
|
Total non-current assets |
1,584,117 |
1,204,379 |
|
|
|
Total assets |
US$2,164,597 |
US$1,692,744 |
|
|
|
Liabilities and shareholders' equity |
|
Current liabilities: |
|
|
Accounts payable |
US$100,819 |
US$80,241 |
|
Due to related parties |
2,902 |
4,114 |
|
Customer deposits and advances |
151,833 |
106,655 |
|
Deferred revenue |
2,931 |
2,016 |
|
Ruble denominated bonds payable |
98,001 |
- |
|
Bank loans, current portion |
35,054 |
37,780 |
|
Capital lease obligation, current portion |
8,420 |
3,868 |
|
Equipment financing obligations, current portion |
124,411 |
134,617 |
|
Accrued liabilities |
107,944 |
49,492 |
|
Total current liabilities |
632,315 |
418,783 |
|
|
|
Deferred income taxes |
39,445 |
35,227 |
|
|
|
Bank loans, less current portion |
330,619 |
306,080 |
|
|
|
Capital lease obligation, less current portion |
10,050 |
899 |
|
|
|
Accrued liabilities |
863 |
3,265 |
|
|
|
5.5% Senior convertible notes due July 2005 |
84,369 |
85,911 |
|
|
|
Equipment financing obligations, less current portion |
59,989 |
81,425 |
|
|
|
|
|
|
|
Minority Interest |
163,184 |
98,491 |
|
|
|
|
|
|
|
Shareholders' equity |
843,763 |
662,663 |
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
US$2,164,597 |
US$1,692,744 |
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
|
Nine months ended
Sept. 30, |
|
|
|
2003 |
2002 |
|
|
|
(In thousands of US dollars) |
|
|
|
|
|
|
|
Net cash provided by operating activities |
US$364,152 |
US$174,917 |
|
|
|
|
|
|
|
Proceeds from bank and other loans |
144,800 |
251,472 |
|
|
|
Proceeds from issuance of ruble denominated bonds |
97,119 |
|
|
|
|
Capital contribution by minority shareholders |
58,520 |
|
|
|
|
|
|
|
|
Payments of fees in respect of debt issue |
(1,815) |
(6,203) |
|
|
|
Repayment of bank and other loans |
(70,646) |
(9,793) |
|
|
|
|
|
|
|
Repayment of equipment financing obligations |
(182,468) |
(50,179) |
|
|
|
Repayment of capital lease obligations |
(860) |
(1,240) |
|
|
|
Net cash provided by financing activities |
44,650 |
184,057 |
|
|
|
|
|
|
|
Purchase of property and equipment |
(341,512) |
(162,657) |
|
|
|
Proceeds from sale of property and equipment |
12,432 |
|
|
|
|
Purchase of Orensot stock, net of cash acquired of US$344 |
|
(13,860) |
|
|
|
Purchase of StavTeleSot stock, net of cash acquired of US$658 |
(42,455) |
|
|
|
|
Purchase of intangible assets |
(15,083) |
(7,140) |
|
|
|
Purchase of other assets |
(18,774) |
(28,629) |
|
|
|
Net cash used in investing activities |
(405,392) |
(212,286) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
5,883 |
2,482 |
|
|
|
|
|
|
|
Net increase in cash |
9,293 |
149,170 |
|
|
|
Cash and cash equivalents at beginning of period |
263,657 |
144,172 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
US$272,950 |
US$293,342 |
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
Non-cash activities: |
|
|
|
|
Equipment acquired under financing and capital lease agreements |
US$89,562 |
US$104,621 |
|
|
|
Accounts payable for equipment and other long-lived assets |
36,356 |
39,368 |
|
|
|
|
|
|
|
Operating activities financed by sale of treasury stock |
3,171 |
14 |
|
|
|
Acquisitions: |
|
|
|
|
Fair value of assets acquired |
73,290 |
22,804 |
|
|
|
Difference between the amount paid and the fair value of net assets acquired |
(4,699) |
|
|
|
|
Cash paid for the capital stock |
(43,113) |
(14,204) |
|
|
|
Liabilities assumed |
US$25,478 |
US$8,600 |
|
|
Reconciliation of VimpelCom OIBDA to operating income
(In thousands of US dollars)
|
|
Three months ended |
|
Sept. 30, 2003 |
June 30, 2003 |
Sept. 30, 2002 |
|
OIBDA |
US$178,472 |
US$139,929 |
US$102,567 |
|
Less: Depreciation |
(42,894) |
(33,914) |
(23,182) |
|
Less: Amortization |
(8,871) |
(8,738) |
(3,249) |
|
Operating income |
US$126,707 |
US$97,277 |
US$76,136 |
Reconciliation of VimpelCom OIBDA margin to operating income as percentage of net operating revenues
|
|
Three months ended |
|
Sept. 30, 2003 |
June 30, 2003 |
Sept. 30, 2002 |
|
OIBDA margin |
47.1% |
46.0% |
46.4% |
|
Less: Depreciation as percentage of net operating revenues |
(11.3%) |
(11.1%) |
(10.5%) |
|
Less: Amortization as percentage of net operating revenues |
(2.4%) |
(2.9%) |
(1.5%) |
|
Operating income as percentage of net operating revenues |
33.4% |
32.0% |
34.4% |
Reconciliation of VimpelCom OIBDA to operating income
(In thousands of US dollars)
|
|
Nine months ended |
|
Sept. 30, 2003 |
Sept. 30, 2002 |
|
OIBDA |
US$426,337 |
US$237,594 |
|
Less: Depreciation |
(108,486) |
(58,525) |
|
Less: Amortization |
(24,981) |
(8,737) |
|
Operating income |
US$292,870 |
US$170,332 |
Reconciliation of VimpelCom OIBDA margin to operating income as percentage of net operating revenues
|
|
Nine months ended |
|
Sept. 30, 2003 |
Sept. 30, 2002 |
|
OIBDA margin |
45.9% |
44.0% |
|
Less: Depreciation as percentage of net operating revenues |
(11.6%) |
(10.8%) |
|
Less: Amortization as percentage of net operating revenues |
(2.7%) |
(1.6%) |
|
Operating income as percentage of net operating revenues |
31.6% |
31.6% |
Open Joint Stock Company "VimpelCom - Region"
Unaudited Condensed Consolidated Statements of Income
|
|
Three months ended
Sept. 30, |
Nine months ended
Sept. 30, |
|
2003 |
2002 |
2003 |
2002 |
|
(In thousands of US dollars) |
|
Operating revenues: |
|
|
|
Service revenues and connection fees |
US$118,676 |
US$19,184 |
US$257,790 |
US$34,628 |
|
Sales of handsets and accessories |
8,742 |
4,475 |
25,165 |
9,873 |
|
Other revenues |
1,330 |
126 |
2,757 |
302 |
|
Total operating revenues |
128,748 |
23,785 |
285,712 |
44,803 |
|
|
Less revenue based taxes |
|
(235) |
|
(471) |
|
Net operating revenues |
128,748 |
23,550 |
285,712 |
44,332 |
|
|
|
Operating expenses: |
|
|
|
Service costs |
22,980 |
5,326 |
56,237 |
10,292 |
|
Cost of handsets and accessories sold |
7,894 |
4,455 |
23,319 |
9,930 |
|
Equipment lease |
2,445 |
|
6,899 |
|
|
Selling, general and administrative expenses |
41,269 |
10,523 |
91,442 |
23,912 |
|
Network maintenance |
3,139 |
877 |
7,246 |
2,992 |
|
Depreciation and amortization |
18,681 |
3,110 |
44,152 |
6,296 |
|
Provision for doubtful accounts |
1,233 |
245 |
2,148 |
244 |
|
Total operating expenses |
97,641 |
24,536 |
231,443 |
53,666 |
|
|
|
Operating income (loss) |
31,107 |
(986) |
54,269 |
(9,334) |
|
|
|
Other income and expenses: |
|
|
|
Interest income |
393 |
18 |
784 |
259 |
|
Interest expense |
(6,814) |
(1,320) |
(16,045) |
(2,437) |
|
Net foreign exchange gain (loss) |
375 |
57 |
452 |
(3,044) |
|
Other (expenses) income |
(276) |
(209) |
(498) |
(167) |
|
Total other income and expenses |
(6,322) |
(1,454) |
(15,307) |
(5,389) |
|
|
|
Income (loss) before income taxes and minority interest |
24,785 |
(2,440) |
38,962 |
(14,723) |
|
|
|
Income taxes expense (benefit) |
6,904 |
(145) |
12,850 |
(383) |
|
Minority interest in net earnings of subsidiaries |
331 |
143 |
636 |
143 |
|
|
|
Net income (loss) |
US$17,550 |
US$(2,438) |
US$25,476 |
US$(14,483) |
|
|
|
|
*) Net income of VimpelCom-R as a legal entity differs from the $17.899 million net income for the regional segment reported above in this press release. The difference is caused by the contribution from BeeLine-Samara which operates in the Samara region but, for historical reasons, is owned by VimpelCom (and therefore is not reflected in the VimpelCom-R financials). The following table provides reconciliation between the two figures (all numbers are in thousands of US$ and relate to the third quarter of 2003):
|
Net income of VimpelCom-R |
17,550 |
|
Net income of BeeLine-Samara |
889 |
|
Net effect of transactions between VimpelCom-R and BeeLine-Samara |
(540) |
|
Net income of VimpelCom's regional segment |
17,899 |
Operating revenue of VimpelCom-R as a legal entity differs from the $119,329 operating revenue for the regional segment excluding inter-company transactions, reported above in this press release. The following table provides reconciliation between the two figures (all numbers are in thousands of US$ and relate to the third quarter of 2003):
|
Operating revenue of VimpelCom-R |
128,748 |
|
Operating revenue of BeeLine-Samara |
7,579 |
|
Net effect of transactions between VimpelCom-R and BeeLine-Samara |
(2,951) |
|
Operating revenue of VimpelCom's regional segment |
133,376 |
|
Inter-company operating revenue of VimpelCom-R and Beeline-Samara |
(14,047) |
|
Regional segment operating revenue excluding inter-company transactions |
119,329 |
|
Open Joint Stock Company "VimpelCom - Region"
Unaudited Consolidated Condensed Balance Sheet |
|
|
|
|
Sept. 30,
2003 |
December 31,
2002 |
|
(In thousand US dollars) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
US$91,789 |
US$52,703 |
|
Trade accounts receivable |
6,985 |
2,768 |
|
Other current assets |
120,469 |
68,348 |
|
Total current assets |
219,243 |
123,819 |
|
|
|
Non-current assets: |
|
|
Property and equipment, net |
536,724 |
277,480 |
|
Other intangible assets, net |
15,277 |
10,780 |
|
|
|
|
|
Telecommunication licenses and allocation of frequencies, net |
90,950 |
72,322 |
|
Other assets |
34,241 |
22,975 |
|
Total non-current assets |
677,192 |
383,557 |
|
|
|
Total assets |
US$896,435 |
US$507,376 |
|
|
|
Liabilities and shareholders' equity |
|
Current liabilities: |
|
|
Accounts payable |
US$39,711 |
US$20,523 |
|
Due to related parties |
69,600 |
25,157 |
|
Customer deposits and advances |
17,791 |
14,046 |
|
Deferred revenue |
645 |
699 |
|
Rouble denominated bonds payable |
98,001 |
- |
|
Bank loans, current portion |
658 |
1,157 |
|
Capital lease obligation, current portion |
2,891 |
3,196 |
|
Equipment financing obligations, current portion |
66,974 |
74,295 |
|
Accrued liabilities |
10,907 |
3,103 |
|
Total current liabilities |
307,178 |
142,176 |
|
|
|
Deferred income taxes |
22,952 |
18,689 |
|
|
|
Bank loans, less current portion |
70,653 |
39,380 |
|
|
|
Long-term loans due to VimpelCom |
135,689 |
40,000 |
|
|
|
Equipment financing obligations, less current portion |
12,770 |
6,563 |
|
|
|
|
|
|
|
Minority Interest |
234 |
188 |
|
|
|
|
|
|
|
Shareholders' equity |
346,959 |
260,380 |
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
US$896,435 |
US$507,376 |
|
|
|
|
|
|
|
Open Joint Stock Company "VimpelCom - Region"
Unaudited Condensed Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
|
Nine months ended
Sept. 30, |
|
|
|
2003 |
2002 |
|
|
|
(In thousands of US dollars) |
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
US$73,883 |
US$(15,258) |
|
|
|
|
|
|
|
Proceeds from bank and other loans |
118,933 |
1,223 |
|
|
|
Proceeds from loans from VimpelCom |
95,688 |
77,882 |
|
|
|
Proceeds from issuance of ruble denominated bonds |
97,119 |
|
|
|
|
Capital contribution by minority shareholders |
58,520 |
|
|
|
|
Repayment of bank and other loans |
(35,925) |
(1,444) |
|
|
|
|
|
|
|
Repayment of equipment financing obligations |
(141,015) |
(9,009) |
|
|
|
Repayment of capital lease obligations |
(119) |
(1,240) |
|
|
|
Net cash provided by financing activities |
193,201 |
67,412 |
|
|
|
|
|
|
|
Purchase of property and equipment |
(169,294) |
(48,934) |
|
|
|
Purchase of Orensot stock, net of cash acquired of US$344 |
|
(13,860) |
|
|
|
Purchase of StavTeleSot stock, net of cash acquired of US$658 |
(42,455) |
|
|
|
|
Purchase of intangible assets |
(11,161) |
(3,305) |
|
|
|
Purchase of other assets |
(7,416) |
(5,151) |
|
|
|
Net cash used in investing activities |
(230,326) |
(71,250) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
2,328 |
(325) |
|
|
|
|
|
|
|
Net increase (decrease) in cash |
39,086 |
(19,421) |
|
|
|
Cash and cash equivalents at beginning of period |
52,703 |
28,602 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
US$91,789 |
US$9,181 |
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
Non-cash activities: |
|
|
|
|
Equipment acquired under financing agreements |
US$31,238 |
US$52,937 |
|
|
|
Accounts payable for equipment and other long-lived assets |
17,217 |
5,646 |
|
|
|
|
|
|
|
Acquisitions: |
|
|
|
|
Fair value of assets acquired |
73,290 |
22,804 |
|
|
|
Difference between the amount paid and the fair value of net assets acquired |
(4,699) |
|
|
|
|
Cash paid for the capital stock |
(43,113) |
(14,204) |
|
|
|
Liabilities assumed |
US$25,478 |
US$8,600 |
|
|
Reconciliation of VimpelCom-Region OIBDA to operating income
(In thousands of US dollars)
|
|
Three months ended |
|
Sept. 30, 2003 |
June 30, 2003 |
Sept. 30, 2002 |
|
OIBDA |
US$49,788 |
US$33,243 |
US$2,124 |
|
Depreciation |
(12,893) |
(8,524) |
(2,564) |
|
Amortization |
(5,788) |
(5,637) |
(546) |
|
Operating income |
US$31,107 |
US$19,082 |
US$(986) |
Reconciliation of VimpelCom-Region OIBDA margin to operating income as percentage of net operating revenues
|
|
Three months ended |
|
Sept. 30, 2003 |
June 30, 2003 |
Sept. 30, 2002 |
|
OIBDA margin |
38.7% |
36.2% |
9.0% |
|
Depreciation as percentage of net revenues |
(10.0%) |
(9.3%) |
(10.9%) |
|
Amortization as percentage of net revenues |
(4.5%) |
(6.1%) |
(2.3%) |
|
Operating income as percentage of net revenues |
24.2% |
20.8% |
(4.2%) |
Reconciliation of VimpelCom-Region OIBDA to operating income
(In thousands of US dollars)
|
|
Nine months ended |
|
Sept. 30, 2003 |
Sept. 30, 2002 |
|
OIBDA |
US$98,421 |
US$(3,038) |
|
Less: Depreciation |
(28,177) |
(5,479) |
|
Less: Amortization |
(15,975) |
(817) |
|
Operating income |
US$54,269 |
US$(9,334) |
Reconciliation of VimpelCom-Region OIBDA margin to operating income as percentage of net operating revenues
|
|
Nine months ended |
|
Sept. 30, 2003 |
Sept. 30, 2002 |
|
OIBDA margin |
34.4% |
(6.9%) |
|
Less: Depreciation as percentage of net operating revenues |
(9.9%) |
(12.4%) |
|
Less: Amortization as percentage of net operating revenues |
(5.6%) |
(1.8%) |
|
Operating income as percentage of net operating revenues |
19.0% |
(21.1%) |
|
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