Amsterdam-based VimpelCom Ltd. (VIP) posted second-quarter 2013 financial results where the bottom line recorded a double-digit growth but the top line remained flat. At the end of second-quarter 2013, VimpelCom had 215 million total subscribers across its operating territories, reflecting a 5% year-over-year increase.
Total revenue in the second quarter stood at $5,718 million, flat year over year. Revenues were mainly affected by 72% MTR cut in Italy. Reported net income for the quarter was $573 million or 33 cents per share compared with $488 million or 30 cents in the year-ago quarter.
Quarterly EBITDA margin was 42.4% compared with 43.2% in the year-ago quarter. Operating expenses in the reported quarter were $4,494 million against $4,553.7 million in the year-ago quarter. Quarterly operating profit was $1,224 million compared with $1,192 million in the year-ago quarter. Operating margin for the second quarter was 21.4% versus 20.7% in the previous-year quarter.
During the second quarter of 2013, VimpelCom generated $2,450 million of cash from operations compared with $2,488 million in the year-ago quarter. At the end of the second quarter of 2013, VimpelCom had approximately $4,551 million in cash and cash equivalents on its balance sheet compared with $5,564 million at the end of 2012. Outstanding debt, at the end of the reported quarter, was $22,622 million compared with $27,219 million at the end of 2012.
Revenues by Key Markets
Revenues in Russia, the operator’s largest market, rose 3% year over year to $2,334 million but revenues in Italy, the operator’s second largest market, fell 7% year over year to $1,654 million. Likewise, revenues in Africa & Asia and Ukraine dropped 5% and 1%, respectively, to $910 and $400 million. Revenues for CIS (Uzbekistan, Uzbekistan, Armenia and Kyrgyzstan) increased 17% year over year.
Other Stocks to Consider
Currently, VimpelCom carries a Zacks Rank #4 (Sell) while other stocks worth considering within the sector are AT&T Inc. (T - Analyst Report) , BT Group plc (BT - Snapshot Report) and Orange (ORAN - Analyst Report) . All three carry a Zacks Rank #3 (Hold).