| Moscow and New York (March 12, 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 and year ended December 31, 2007.
Financial and Operating Highlights
2007
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Net operating revenues reached $7,171.1 million, an increase of 47.3% versus 2006.
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OIBDA reached $3,596.7 million, an increase of 46.7% versus 2006.
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OIBDA margin was 50.2%, including 50.9% in Russia and 52.8% in Kazakhstan.
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Net income totaled $1,462.7 million, an increase of 80.2% versus 2006.
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Free cash flow before acquisitions almost tripled, reaching US$1,264.7 million.
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Russian ARPU showed strong growth through the year, reaching $13.5 by the fourth quarter, an increase of 23.9% compared to the fourth quarter of 2006.
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Active subscriber base increased by 6.2 million, reaching 51.7 million consumers.
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3G licenses for Russia, Uzbekistan and Armenia were received.
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Acquisition of Golden Telecom was launched in 2007 and completed in February 2008.
The Fourth Quarter of 2007
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Net operating revenues reached a record high of $2,009.9 million in the fourth quarter, a year-on-year increase of 38.5% and a quarter-on-quarter increase of 2.8%.
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OIBDA reached $918.4 million, a year-on-year increase of 33.1%, yielding an OIBDA margin of 45.7%. Importantly, rapid appreciation of VimpelCom’s share price in the fourth quarter of 2007 resulted in an accrual of $118.7 million, connected to our stock price based compensation plans. These accruals are $78.2 million higher than in the third quarter of 2007 and $94.5 million higher than in the fourth quarter of the previous year. Without this effect our OIBDA margin would have been above 50%.
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Net income totaled $368.1 million, a year-on-year increase of 86.0%.
Commenting on today’s announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said: “2007 was another excellent year for VimpelCom. Our revenues exceeded $7 billion and grew at a remarkable rate of 47%. We maintained our OIBDA margin at an impressive level of 50%. Strong revenue growth, coupled with a healthy margin and a balanced investment policy, resulted in free cash flow of $1.26 billion, almost tripling the 2006 level.
“Our strong financial position supports our aspiration to expand into adjacent businesses and new geographic areas”.
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