REFILE-UPDATE 2-Vimpelcom eyes extra dividends, profit beats forecast

Wed Mar 6, 2013 10:50am EST

* To decide on special and final 2012 dividend in Q2

* Q4 net profit at $801 mln vs $452 mln forecast

* Boosted by Euroset stake revaluation

* EBITDA up 10 pct at $2.45 bln, in line with forecast

MOSCOW, March 6 (Reuters) - Telecoms group Vimpelcom said it may pay a special dividend related to a recent stake increase by Russian shareholder Altimo as it reported forecast-beating earnings for the fourth quarter.

Altimo, part of Russian tycoon Mikhail Fridman's Alfa-Group, said in December it would convert its preferred shares in Vimpelcom into common shares in a move that will raise its economic interest in the group.

Vimpelcom, which will net $1.4 billion for the conversion, may pay an extraordinary dividend in the second quarter, it said on Wednesday, together with the final 2012 dividend.

It will also announce a revised dividend policy which currently implies the payout of at least $0.80 per share a year through 2014. It paid $0.45 per share in interim 2012 dividends in January.

Vimpelcom's Russian rivals have also recently highlighted the prospects of strong future dividends, with New-York-listed MTS announcing plans to raise payouts by 25 percent. MegaFon will pay its first dividend this summer.

Altimo currently has a 56.2 percent economic stake and a 47.9 percent voting stake in Vimpelcom, while Norway's Telenor has 35.7 percent and 43 percent respectively.

The Amsterdam-based operator, with assets in Russia, Italy and various emerging markets, reported a fourth-quarter net profit of $801 million, which got a $606 million boost from revaluation of its stake in Russian cellphone retailer Euroset, beating a $452 million analyst forecast.

It adjusted the fair value of its holdings in Euroset after taking equal control of it in December, raising its stake by 0.1 percent to 50 percent as No.2 Russian operator MegaFon bought the other 50 percent stake from tycoon Alexander Mamut.

The company did not say how much its Euroset stake was now worth. MegaFon's December deal valued the retailer at just over $2 billion.

Operating profit more than tripled to $709 million, while earnings before interest, taxes, depreciation and amortisation rose 10 percent to $2.45 billion, with a 41.1 percent margin.

Quarterly revenue edged up 1 percent, year-on-year, to $5.95 billion, compared to the $5.87 billion forecast, helped by a 5 percent rise in the number of mobile subscribers to 214 million.

Vimpelcom said in January that it could make some divestments over the coming year. Vimpelcom has been trying to sell its businesses in Burundi, Zimbabwe, Central African Republic, Cambodia and Laos in order to focus on its main markets of Russia and Italy, sources previously said.

The company continues to review the contribution of smaller assets, Chief Executive Jo Lunder told Reuters by telephone, adding "there will be an announcement in the future ... including on the divestment."

He also said Vimpelcom would consider various options for its Canadian business after it completes the deal that would give it majority voting and economic interest in the local unit, Wind Mobile.

"We would like to take control of the Canadian business and then decide our own destiny in Canada... All our options are really open and options could be divestment, a merger, it could be an acquisition," he said, adding he expected to have full clarity on the Canadian business this year.

Vimpelcom's stock rose by 3.8 percent to $12.58 per share by 1545 GMT, outperforming both MTS and MegaFon.