VimpelCom suffers from challenging Q4 that sees profits tumble

VimpelCom reported a huge net loss for the fourth quarter of 2013 as its revenue was hit by regulatory measures and economic challenges.

The Amsterdam-headquartered group, which has operations in Africa, Russia and Asia, reported Q4 revenue of US$5.6 billion, a seven per cent year-on-year decline.

Its net loss for the period was US$2.7 billion, which the company said reflected non-cash impairments. In the same period in 2012, the company reported a US$195 million net profit.

For the full-year, the operator saw a two per cent fall in revenue to US$22.5 billion, and a net loss of US$1.4 billion, attributed to non-cash impairments totalling US$3 billion, mainly related to operations in Ukraine and Canada.

The company recorded an impairment charge on its assets in Ukraine due to macro-economic developments and weakened operational performance, while it fully impaired its Wind Mobile assets in Canada after deciding not to bid in the country’s recent 700MHz spectrum auction.

VimpelCom said its progress was also hampered by mobile termination rate cuts in Italy, ongoing limitations in Algeria, unstable economic conditions in Pakistan and Bangladesh, and a slowdown in some markets.

The group’s mobile customer base increased by four per cent during Q4, however, to reach 220 million.