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VimpelCom announces first quarter 2004 financial and operating results

  • 71% year-on-year increase in net operating revenues
  • 84% year-on-year increase in net income
  • 87% year-on-year increase in OIBDA
  • approximately 14.9 million subscribers including 8.7 million regional subscribers as of today

Moscow and New York (May 27, 2004) - 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 first quarter ended March 31, 2004. During the first quarter, the Company continued its rapid growth in new subscribers and strengthened its financial performance, with the regions growing significantly faster than Moscow. Consolidated financial statements of VimpelCom and consolidated financial statements of VimpelCom-Region, VimpelCom's subsidiary for regional development, are attached.

Commenting on today's announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, "We are pleased with our first quarter results. In a very competitive market that is now the fastest growing wireless market in the world we added approximately 2 million subscribers, and we increased our OIBDA margin to 48.4%, the highest level achieved since our listing on the New York Stock Exchange in 1996. We were able to achieve these results by successfully implementing our strategy of national expansion."

Key Financial and Operating Indicators

(Definitions as well as reconciliation of each of OIBDA,
OIBDA margin, ARPU and SAC to its most directly comparable U.S. GAAP
financial measurement are presented below in the attachment)

  Three months ended
March 31,
2004
March 31,
2003
Change
Y-on-Y
(%)
Net operating revenues (US$,000) 417,697 244,437 70.9%
OIBDA (US$,000) (1) 202,025 107,936 87.2%
OIBDA margin (2) 48.4% 44.2% -
Gross margin (US$,000) (3) 342,141 196,570 74.1%
Gross margin percentage (4) 81.9% 80.4% -
Net income (US$,000) 76,131 41,387 83.9%
Net income per share (US$) 1.90 1.09 74.3%
Net income per ADS (US$) (5) 1.43 0.82 74.4%
ARPU (US$) (6) 10.8 13.5 -20.0%
MOU, revised definition (min) (7) 91.4 87.5 4.5%
SAC (US$) (8) 16.8 20.8 -19.2%

 

Significant improvements in VimpelCom's financial and operating results in the first quarter of 2004, as compared with the first quarter of 2003, were achieved largely as a result of rapid subscriber growth combined with the effects of economies of scale, efficient cost control and lower acquisition costs per subscriber in the regions outside of Moscow. When compared with the fourth quarter of 2003, strong seasonal effects (reduced roaming revenue and reduced minutes of use) resulted in a reduced rate of growth in net operating revenues. On the other hand, margins improved both on OIBDA and net income levels as compared with the fourth quarter of 2003.

The Company's financial results include the activities in the Moscow license area and in the regions. Net operating revenues, excluding inter-company transactions, for Moscow stand-alone and the regions in the first quarter of 2004 were $256.3 million and $161.4 million, respectively. Net income for Moscow stand-alone and in the regions in the first quarter of 2004 was $60.0 million and $26.8 million, respectively.

Selling, general and administrative ("SG&A") expenses, as a percentage of net operating revenues, improved to 33.0% reported in the first quarter of 2004 as compared with 34.9% in the first quarter of 2003. The decrease in SG&A from $148.8 million in the fourth quarter of 2003 to $138.0 million in the first quarter of 2004 was in part due to a decrease in aggregate subscriber acquisition costs from $57.2 million in the fourth quarter of 2003 to $50.1 million in the first quarter of 2004.

VimpelCom's total capital expenditures for the first quarter of 2004 were approximately $157 million, spent entirely for the purchase of property and equipment.

In January 2004, VimpelCom adopted a new depreciation policy. Based on periodic internal studies of the useful economic lives of the Company's property and equipment, the Company changed the estimated useful life of GSM telecommunications equipment from 9.5 to 7 years.

Beginning with the first quarter of 2004, the Company will use a new definition of MOU based on total minutes of usage (including both billable minutes of usage and free minutes of usage) rather than only billable minutes as used in the previous definition. This approach is similar to that currently used by the majority of cellular operators in and outside of Russia and the Company believes the new definition better reflects the relationship between traffic, capital expenditures, revenues and operating costs. The tables with the quarterly MOU numbers for 2003 calculated under both the new and previous definitions are presented below in the definition section. The MOU figures used throughout this release have been calculated under the new definition.

The Company's MOU in the first quarter of 2004 was 91.4 minutes, an increase of approximately 4.5% compared to 87.5 minutes recorded in the first quarter of 2003. As compared with 96.8 minutes recorded for the fourth quarter of 2003, MOU declined by 5.6%, primarily due to seasonal effects. ARPU for the first quarter of 2004 was approximately $10.8, a 20.0% decrease from the $13.5 reported for the first quarter of 2003 and a 13.6% decrease from the $12.5 reported for the fourth quarter of 2003.

The decline in ARPU was due to seasonal effects, which are most pronounced in the first quarter, and a growing proportion of regional subscribers who generate lower ARPU than Moscow subscribers. In addition, the decline in ARPU was caused by strong competition which resulted in tariff reductions and an effective decline in average price per minute. An increase in the proportion of intra-network traffic also led to an effective decline in average price per minute, although this decline was mitigated by the absence of interconnect charges.

Key Subscriber Statistics

 

  As of
March 31, 2004
As of March 31, 2003 Change,
Y-on-Y
(%)
As of
Dec. 31, 2003
Change
Q-on-Q
(%)
Moscow license area 6,042,300 3,945,600 53.1% 5,659,600 6.8%
Contract 826,800 732,000 13.0% 819,900 0.8%
Prepaid 5,215,500 3,213,600 62.3% 4,839,700 7.8%
Regions 7,329,200 2,242,400 226.8% 5,777,300 26.9%
Total Number of Subscribers 13,371,500 6,188,000 116.1% 11,436,900 16.9%
 
Churn (quarterly) 8.6% 9.6% -- 9.7% --

 

Rapid subscriber growth continued in the first quarter of 2004, particularly in the regions. As of May 27, 2004, VimpelCom's total number of subscribers reached approximately 14.93 million, with approximately 6.22 million subscribers in the Moscow license area and 8.72 million in the regions outside Moscow.

Using independent sources to estimate the number of subscribers of the Company's competitors, VimpelCom estimates that its market share in the Moscow license area was 48.4% at the end of the first quarter of 2004, compared to the Company's estimated market share of 49.5% reported at the end of the first quarter of 2003. On a nationwide basis, VimpelCom estimates its market share at 32.0% at the end of the first quarter of 2004, compared to 29.0% estimated at the end of the first quarter of 2003.

The Company's quarterly churn rate in the first quarter of 2004 was 8.6%, compared to the Company's churn rate of 9.6% reported for the same period in 2003. Marketing activities in the past few quarters resulted in some improvement in churn in the first quarter of 2004. Loyalty and retention, especially in the Company's more saturated markets, remain one of VimpelCom's priorities going forward.

The Company's management will discuss its first quarter 2004 results during a conference call and slide presentation on May 27, 2004 at 6:30 pm Moscow time (10:30 am EDT 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 June 3, 2004 and June 28, 2004, 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 GSM" brand. 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".

 

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, 2003 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

 

- Definitions and Tables attached -

Definitions

  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. Our OIBDA calculations are commonly used as bases for some 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 a percentage of net operating revenues, the most directly comparable U.S. GAAP financial measure, 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. Each ADS represents 0.75 of one share of common stock.
  6. ARPU (Monthly Average Revenue per User), a non-U.S. GAAP financial measure, 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, sales of handsets and accessories and other non-service revenue, by the average number of the Company's subscribers during the month. Reconciliation of ARPU to service revenues and connection fees, the most directly comparable U.S. GAAP financial measure, is presented below in the tables section. The Company believes that ARPU provides useful information to investors because it is an indicator of the performance of the Company's business operations and assists management in budgeting. The Company also believes that ARPU provides management with useful information concerning usage and acceptance of the Company's services. ARPU should not be viewed in isolation or an alternative to other figures reported under U.S. GAAP.
  7. MOU (Monthly Average Minutes of Use per User) is calculated for each month of the relevant period by dividing the total number of minutes of usage for incoming and outgoing calls during that month (excluding guest roamers) by the average number of subscribers during the month.
  8. SAC (Average Acquisition Cost Per User), a non-U.S. GAAP financial measure, 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. Reconciliation of SAC to selling, general and administrative expenses, the most directly comparable U.S. GAAP financial measure, is presented below in the tables section. The Company believes that SAC provides useful information to investors because it is an indicator of the performance of the Company's business operations and assists management in budgeting. The Company also believes that SAC assists management in quantifying the incremental costs to acquire a new subscriber. SAC should not be viewed in isolation or an alternative to other figures reported under U.S. GAAP.

MOU numbers for 2003 calculated under the new definition
(including both billable and free minutes of usage)

  1Q2003 2Q2003 3Q2003 4Q2003
MOU, blended (min) 87.5 100.2 104.3 96.8
MOU Moscow 90.3 107.4 115.2 108.0
Contract (Moscow) 258.6 297.3 320.9 343.0
Prepaid (Moscow) 50.8 65.9 74.7 66.2
MOU, Regions 81.8 88.7 89.8 84.6



MOU numbers for 2003 calculated under the prior definition (including only billable minutes of usage)

  1Q2003 2Q2003 3Q2003 4Q2003
MOU, blended (min) 81.5 93.8 92.7 89.3
MOU Moscow 78.9 95.1 92.5 84.7
Contract (Moscow) 237.2 273.7 284.2 303.1
Prepaid (Moscow) 41.7 56.0 54.7 45.9
MOU, Regions 86.9 91.6 93.0 94.4



Open Joint Stock Company "Vimpel-Communications"
Unaudited Condensed Consolidated Statements of Income

  Three months ended
March 31,
2004 2003
(In thousands of US dollars, except per share (ADS) amounts)
Operating revenues:  
  Service revenues and connection fees US$ 400,903 US$ 230,099
Sales of handsets and accessories 15,774 13,426
Other revenues 1,020 912
Total operating revenues 417,697 244,437
 
Operating expenses  
  Service costs 62,365 37,160
Cost of handsets and accessories sold 13,191 10,707
Selling, general and administrative expenses 138,013 85,310
Depreciation 57,337 31,678
Amortization 9,143 7,372
Provision for doubtful accounts 2,103 3,324
Total operating expenses 282,152 175,551
 
Operating income 135,545 68,886
 
Other income and expenses:  
  Other income 354 574
Other expenses (403) (432)
Interest income 1,501 1,998
Interest expense (13,856) (16,036)
Net foreign exchange gain (loss) 1,671 1,327
Total other income and expenses (10,733) (12,569)
 
Income before income taxes and minority interest 124,812 56,317
 
Income taxes expense 36,699 14,912
Minority interest in net earnings (losses) of subsidiaries 11,982 18
 
Net income US$ 76,131 US$ 41,387
 
Net income per common share US$1.90 US$1.09
Net income per ADS equivalent US$1.43 US$0.82
Weighted average common shares outstanding (thousands) 40,172 38,073
 
Open Joint Stock Company "Vimpel-Communications"
Condensed Consolidated Balance Sheets
 
  March 31,
2004
December 31,
2003
(In thousands of US dollars)
Assets  
Current assets:
  Cash and cash equivalents US$130,552 US$157,611
Accounts receivable 109,386 113,092
Other current assets 271,775 255,540
Total current assets 511,713 526,243
 
Non-current assets
  Property and equipment, net 1,530,372 1,460,542
Telecommunication licenses, net 98,799 103,817
Other intangible assets, net 59,919 59,369
Other assets 175,260 152,261
Total non-current assets 1,864,350 1,775,989
 
Total assets US$ 2,376,063 US$ 2,302,232
 
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable US$ 172,047 US$ 158,467
Due to related parties 6,290 8,603
Customer advances and deposits 196,323 181,475
Deferred revenue 2,596 2,701
Ruble denominated bonds payable 105,317 101,852
Bank loans, current portion 30,691 35,343
Capital lease obligations, current portion 8,451 6,587
Equipment financing obligations, current portion 73,622 70,935
Accrued liabilities 100,298 127,689
Total current liabilities 695,635 693,652
 
Deferred income taxes 31,634 34,380
Bank loans, less current portion 331,490 330,112
Capital lease obligations, less current portion 7,924 9,154
Accrued liabilities, less current portion 4,113 4,046
5.5% Senior convertible notes due July 2005   -
Equipment financing obligations, less current portion 36,288 53,008
 
Minority Interest 193,104 179,664
 
Shareholders' equity 1,075,875 998,216
 
Total liabilities and shareholders' equity US$2,376,063 US$2,302,232
 
Unaudited Condensed Consolidated Statements of Cash Flows
 
  Three months ended
March 31,
2004 2003
(In thousands of US dollars)
 
Net cash provided by operating activities US$116,669 US$75,065
 
Proceeds from bank and other loans 7,189 56,962
Payments of fees in respect of debt issue   (1,249)
Repayment of bank loans (10,587) (20,910)
Repayment of equipment financing obligations (14,265) (23,824)
Repayment of lease obligations (131) (439)
Net cash provided by (used in) financing activities (17,794) 10,540
 
Purchase of property and equipment (107,536) (87,799)
Purchase of StavTeleSot stock, net of cash acquired of US$658   (38,143)
Purchase of intangible assets (4,039) (5,435)
Purchase of other assets (13,550) (7,969)
Net cash used in investing activities (125,125) (139,346)
 
Effect of exchange rate changes on cash (809) 1,442
 
Net decrease in cash (27,059) (52,299)
Cash and cash equivalents at beginning of period 157,611 263,657
 
Cash and cash equivalents at end of period US$130,552 US$211,358
 
Supplemental cash flow information
 
Non-cash activities:
  Equipment acquired under financing agreements US$1,659 US$24,077
Accounts payable for equipment and other long-lived assets 66,505 50,137
Accrued debt and equity offering costs 236 294
Operating activities financed by sale of treasury stock - 1,262
Acquisitions:
  Fair value of assets acquired - 66,634
Difference between the amount paid and the fair value of net assets acquired - (4,699)
Cash paid for the capital stock - (38,801)
  Liabilities assumed US$- US$23,134

Reconciliation of VimpelCom OIBDA to operating income
(In thousands of US dollars)

 

  Three months ended
March 31, 2004 December 31, 2003 March 31, 2003
OIBDA 202,025 186,893 107,936
Depreciation (57,337) (42,776) (31,678)
Amortization (9,143) (9,083) (7,372)
Operating income 135,545 135,034 68,886

Reconciliation of VimpelCom OIBDA margin to operating income as percentage of net operating revenues

 

  Three months ended
March 31, 2004 December 31, 2003 March 31, 2003
OIBDA margin 48.4% 45.8% 44.2%
Less: Depreciation as percentage of net operating revenues (13.7%) (10.5)% (13.0%)
Less: Amortization as percentage of net operating revenues (2.2%) (2.2)% (3.0%)
Operating income as percentage of net operating revenues 32.5% 33.1% 28.2%

Reconciliation of SAC to selling, general and administrative expenses
(In thousands of US dollars, except for SAC and subscriber amounts)

 

  Three months ended
March 31, 2004 December 31, 2003 March 31, 2003
Selling, general and administrative expenses 138,013 148,764 85,310
Less: General and administrative expenses 87,865 91,533 56,643
Sales and marketing expenses, including 50,148 57,231 28,667
advertising & marketing expenses 13,245 16,236 9,445
dealers' commission expense 36,903 40,995 19,222
New gross subscribers,'000 2,979 3,170 1,377
Subscriber Acquisition Cost (SAC) (US$) 16.8 18.1 20.8

Reconciliation of ARPU to service revenue and connection fees
(In thousands of US dollars, except for ARPU and subscriber amounts)

 

  Three months ended
March 31, 2004 December 31, 2003 March 31, 2003
Service revenue and connection fees US$ 400,903 US$ 386,322 US$ 230,099
Less: Connection fees 185 202 337
Less: Revenue from rent of fiber-optic channels 549 417 372
Service revenue used to calculate ARPU 400,169 385,703 229,390
Average number of subscribers,'000 12,318 10,277 5,658
Average revenue per subscriber per month (US$) 10.8 12.5 13.5

Open Joint Stock Company "VimpelCom-Region"
Unaudited Condensed Consolidated Statements of Income

  Three months ended
March 31,
2004 2003
(In thousands of US dollars, except per share (ADS) amounts)
Operating revenues:  
  Service revenues and connection fees US$ 164,248 US$ 55,902
Sales of handsets and accessories 8,624 8,723
Other revenues 1,300 535
Total operating revenues 174,172 65,160
 
Operating expenses  
  Service costs 32,252 15,592
Cost of handsets and accessories sold 8,180 8,496
Equipment lease 2,562 2,221
Selling, general and administrative expenses 55,805 21,289
Network maintenance 4,578 1,811
Depreciation and amortization 24,360 11,310
Provision for doubtful accounts 872 361
Total operating expenses 128,609 61,080
 
Operating income 45,563 4,080
 
Other income and expenses:  
  Other income 16 240
Other expenses (138) (205)
Interest income 240 152
Interest expense (7,008) (3,306)
Net foreign exchange gain (loss) (32) (292)
Total other income and expenses (6,922) (3,411)
 
Income before income taxes and minority interest 38,641 669
 
Income taxes expense 11,909 (1,373)
Minority interest in net earnings (losses) of subsidiaries 60 (19)
 
Net income US$ 26,672 (US$ 723)
 

 

*) Net income of VimpelCom-Region as a legal entity differs from the $26.785 million net income reported above in this press release for the regional segment for the first quarter of 2004. The difference is caused by the fact that the financial statements of Bee-Line Samara are included in the regions for segment reporting purposes, but are not included in the consolidated financial statements of VimpelCom-Region. Bee-Line Samara operates in the Samara region but, for historical reasons, is owned directly by VimpelCom. The following table provides reconciliation between these figures (all numbers are in thousands of US$):

  Three months ended
Mar. 31, 2004
Net income of VimpelCom-Region 26,672
Net income of BeeLine-Samara 598
Net effect of transactions between VimpelCom-Region and BeeLine-Samara (485)
Net income of VimpelCom's regional segment 26,785

Operating revenue of VimpelCom-Region as a legal entity differs from the $161.401 million operating revenues for the regional segment excluding inter-company transactions, reported above in this press release for the first quarter of 2004. The following table provides reconciliation between these figures (all numbers are in thousands of US$):

 

  Three months ended
Mar. 31, 2004
Operating revenue of VimpelCom-Region 174,172
Operating revenue of Bee-Line-Samara 7,967
Net effect of transactions between VimpelCom-Region and Bee-Line-Samara (4,114)
Operating revenue of VimpelCom's regional segment 178,025
Inter-company operating revenue of VimpelCom-Region and Bee-Line-Samara (16,624)
Regional segment operating revenue excluding inter-company transactions 161,401
Open Joint Stock Company "VimpelCom-Region"
Condensed Consolidated Balance Sheets
 
  March 31,
2004
December 31,
2003
(In thousands of US dollars)
Assets  
Current assets:
  Cash and cash equivalents US$58,106 US$42,729
Trade accounts receivable 15,240 22,726
Other current assets 167,058 137,529
Total current assets 240,404 202,984
 
Non-current assets:
  Property and equipment, net 679,241 624,306
Telecommunication licenses and allocation of frequencies, net 83,086 87,175
Other intangible assets, net 22,178 20,383
Other assets 84,056 62,995
Total non-current assets 868,561 794,859
 
Total assets US$ 1,108,965 US$ 997,843
 
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable US$ 73,053 US$ 73,345
Due to related parties 95,290 71,420
Customer advances and deposits 65,471 41,916
Deferred revenue 873 713
Rouble denominated bonds payable 105,317 101,852
Bank loans, current portion 8,072 4,710
Capital lease obligation, current portion 0 0
Equipment financing obligations, current portion 23,482 17,078
Accrued liabilities 16,108 16,076
Total current liabilities 387,666 327,110
 
Deferred income taxes 22,077 24,713
Bank loans, less current portion 66,963 66,500
Long-term loans due to VimpelCom 206,228 176,231
Equipment financing obligations, less current portion 9,296 16,097
Accrued liabilities 2,765 2,718
 
Minority Interest 412 350
 
Shareholders' equity 413,558 384,124
 
Total liabilities and shareholders' equity US$ 1,108,965 US$ 997,843
 
Open Joint Stock Company "VimpelCom-Region"
Condensed Consolidated Statements of Cash Flows
 
  Three months ended
March 31,
2004 2003
(In thousands of US dollars)
 
Net cash provided by (used in) operating activities US$ 59,977 US$2,559
 
Proceeds from bank and other loans 4,359 39,161
Proceeds from loans from VimpelCom 29,937 39,223
Repayment of bank and other loans (569) (11,227)
Repayment of equipment financing obligations (1,879) (13,909)
Repayment of capital lease obligations   (119)
Net cash provided by financing activities 31,848 53,129
 
Purchase of property and equipment (57,898) (33,213)
Purchase of StavTeleSot stock, net of cash acquired of US$658   (38,143)
Purchase of intangible assets (3,236) (4,164)
Purchase of other assets (14,356) -
Net cash used in investing activities (75,490) (75,520)
 
Effect of exchange rate changes on cash (958) 67
 
Net (decrease) increase in cash 15,377 (19,765)
Cash and cash equivalents at beginning of year 42,729 52,703
 
Cash and cash equivalents at end of year US$58,106 US$32,938

 

Reconciliation of VimpelCom-Region OIBDA to operating income
(In thousands of US dollars)

  Three months ended
March 31, 2004 December 31, 2003 March 31, 2003
OIBDA 69,923 62,345 15,390
Depreciation (18,194) (11,740) (6,760)
Amortization (6,166) (5,995) (4,550)
Operating income 45,563 44,610 4,080

 

Reconciliation of VimpelCom-Region OIBDA margin to operating income as percentage of net operating revenues

  Three months ended
March 31, 2004 December 31, 2003 March 31, 2003
OIBDA margin 40.1% 40.2% 23.6%
Less: Depreciation as percentage of net operating revenues (10.4)% (7.6)% (10.4)%
Less: Amortization as percentage of net operating revenues (3.5)% (3.9)% (7.0)%
Operating income as percentage of net operating revenues 26.2% 28.7% 6.2%





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