Company Watch - VimpelCom.

Position:Company overview
 
FREE EXCERPT

New York (AirGuideBusiness - Company Watch) Nov 20, 2011

Russia's MegaFon Q3 net profit falls 11 pct. * Net profit down to 12.5 billion roubles * Hit by sales & marketing costs, depreciation charges * OIBDA margins slumps to 41.9 pct from 46.1 pct MegaFon, Russia's second-biggest wireless operator, said its third-quarter net profit fell 10.9 percent in rouble terms, eroded by its fight with rival Vimpelcom for the mobile market share. Net profit for the July through September period fell to 12.5 billion roubles (USD409 million) from 14 billion roubles a year ago due to higher sales and marketing expenses and depreciation charges , MegaFon said in a statement. The bottom line was hit by a 36 percent rise in sales and marketing expenses to 6.5 billion roubles as well as 10 billion roubles in depreciation charges, which jumped 14 percent due to increased capital expenditures. MegaFon, part-owned by Nordic telecoms firm TeliaSonera, has been stepping up promotion to protect its number two position on the Russian market it took over from Vimpelcom in 2010, eroding core profit margins. Its operating income before depreciation and amortisation (OIBDA) was flat at 26.5 billion roubles, with the OIBDA margin falling to 41.9 percent from 46.1 percent a year ago. Revenues grew 10.2 percent to 63.4 billion roubles . Vimpelcom, which lost market share while expanding overseas with the acquisition of Wind, saw its Russian sales rise 8 percent in rouble terms, while core profit margin slipped to 40 percent from 47 percent. MegaFon, whose other two biggest shareholders are Russian billionaires Mikhail Fridman's Alfa-Group and Alisher Usmanov AF Telecom Holding, had 59.7 million mobile subscribers in Russia at the end of September versus Vimpelcom's 56.8 million. Nov 15, 2011

Futures Fall on Crude Drop as Mechel Tumbles: Russia Overnight. Russian stock futures slid and coal producer OAO Mechel dropped to a six-week low in U.S. trading as concern EuropeOs debt crisis will spread pushed down prices of oil and metals, the nationOs biggest exports. Futures expiring in December on MoscowOs dollar-denominated RTS index declined 2.8 percent to 146,550 by 2:50 p.m. in New York yesterday. The Bloomberg Russia-US 14 Index of Russian companies traded in New York tumbled 3.2 percent to 95.36, the lowest level since Oct. 20. American depositary receipts of Mechel, RussiaOs largest producer of steelmaking coal, and OAO Gazprom Neft, the oil arm of the nationOs natural gas monopoly, led declines. Crude oil, which along with sales of gas makes up about 17 percent of RussiaOs economy, fell below USD100 a barrel and copper dropped the most in two weeks amid speculation EuropeOs debt crisis will cut demand for commodities. Angela Merkel, chancellor of Germany, the third-largest importer of Russian goods in Europe and the biggest euro zone member, rejected calls for the European Central Bank to act as a lender of last resort. OFor Russian gas and oil industries, itOs the direction of the German economy that remains the linchpin for many of those exports,O Chris Palmer, who helps manage USD5 billion of emerging market assets at Henderson Group Plc in London, said in a phone interview. OThatOs where sentiment would be most at risk if the European crisis would lead to a massive downturn in the German economy. That would be bad for Gazprom immediately.O Gazprom, Mechel (MTL) ADRs of OAO Gazprom, the worldOs largest natural gas exporter which relies on Europe for 50 percent of its revenue, slipped 4.1 percent to USD11.57, the lowest level since Nov. 9. Gazprom shares traded on MoscowOs Micex index fell 2 percent to 183.95 rubles, or the equivalent of USD5.95. One ADR represents two ordinary Gazprom shares. Gazprom Neft ADRs fell 4.4 percent to USD21.18 in New York. One depositary receipt is equal to five ordinary Gazprom Neft shares on the Micex, which fell 3.2 percent in Moscow yesterday to close at 133.24 rubles, or USD4.30. ADRs of Moscow-based Mechel plunged 10 percent to USD10.21, the lowest level since Oct. 7. The companyOs shares in Moscow dropped 4.9 percent to 347.40 rubles, or the equivalent of USD11.21. Crude for December delivery fell 3.7 percent to settle at USD98.82 a barrel on the New York Mercantile Exchange. Oil, along with gas, accounts for as much as 40 percent of RussiaOs government revenue. Europe accounted for more than 60 percent of Russian export revenue in 2010, according to the Federal Statistics Service. OLeaving Risky AssetsO Bond yields from the Netherlands to Finland rose yesterday, signaling European investors are struggling to convince investors that they can stem the debt crisis that began in Greece. OEurope is so important for Russia, itOs our major trading partner, and record-high borrowing costs there may most likely mean slowing demand for our exports and rising costs for our imports,O Ruslan Yunusov, an analyst at OLMA Investment Firm, said by phone from Moscow. OItOs bad for export-oriented companies. Investors are leaving risky assets, including Russia.O Urals crude, RussiaOs chief export oil blend, fell 2.4 percent to USD108.10 a barrel, and Brent oil for January settlement fell 3.3 percent to USD108.22 on the London-based ICE Futures Europe exchange. Urals has averaged USD109.39 a barrel this year, compared with the Finance MinistryOs 2011 forecast released in December 2010 of USD75 per barrel. Copper Slides The Standard & PoorOs GSCI index of 24 raw materials fell 2.9 percent to 653.62. Gold fell the most in more than seven weeks. Copper futures for March delivery dropped 2.9 percent to USD3.401 a pound on the Comex in New York, the biggest decline in a most-active contract since Nov. 1, data compiled by Bloomberg show. The Micex lost 0.5 percent to close at 1,475.32 in Moscow yesterday, the weakest close since Nov. 9, and has fallen 13 percent this year. The RTS Index fell 0.5 percent to 1,512.67, a fourth day of losses, and has declined 16 percent. OAO GMK Norilsk Nickel shares may be upgraded to a ObuyO should stock of the worldOs largest nickel producer traded in Moscow and...

To continue reading

FREE SIGN UP