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Veon Ltd.

November 20, 2003

VimpelCom announces third quarter and nine months 2003 financial and operating results

-- 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 http://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 http://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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