UPDATE 2-Vimpelcom’s Q4 earnings up 63 pct, beats forecast

* Q4 net profit rose to $461.2 mln vs $438.6 mln forecast

* Sales rose 22 pct to $2.82 bln vs $2.80 bln forecast

* Doubled capital spending to regain Russian market share

* Russian mobile sales flat on quarter, up 10 pct on year

(Adds comments on Russia, margins, Wind deal, background)

MOSCOW, March 29 (Reuters) – Russian telecoms group
Vimpelcom (VIP.N: Quote, Profile, Research) beat earnings forecasts on Tuesday with a 63
percent jump in fourth-quarter net profit and said its efforts
to restore domestic market share had begun to bear fruit.

The company also said it hopes to close its $6 billion plus
deal for control of Orascom Telecom (ORTE.CA: Quote, Profile, Research) and Italy’s Wind
Telecom within a month after gaining approval despite opposition
from Norwegian shareholder Telenor (TEL.OL: Quote, Profile, Research). [ID:nLDE72G0QR]

“As we look ahead, we are confident this combination will be
increasingly attractive for all our stakeholders and will unlock
additional value within the next 24 months,” Chief Executive
Alexander Izosimov said in a statement.

Vimpelcom also said it had begun to see the benefits of
efforts to restore its Russian market share after losing ground
to rival MegaFon last year in terms of subscribers.

“We continue to strengthen our competitive position and
drive growth by prioritising network expansion, further
developing our marketing capabilities and working on
distribution optimisation and pricing efficiency,” Izosimov said
in a statement.

The company doubled capital expenditure in the fourth
quarter, year-on-year, and in the whole of 2010 versus 2009,
returning to “normal investment levels” with a capex to sales
ratio of 19.2 percent compared with 8.1 percent in 2009.

“We expect the economic recovery in Russia to continue with
support from rising oil and gas prices. Against this backdrop,
we plan to pursue rapid network development,” the firm said in a
statement.

Russian revenue grew 10 percent year-on-year, and were flat
on a quarterly basis due to seasonal weakness.

CORE MARGIN TO HIT TARGET IN H2

Consolidated net profit rose to $461.2 million against
$283.4 million in the final quarter of 2009, Vimpelcom said in a
statement, above the $483.6 million average analyst forecast in
a Reuters poll. [ID:nLDE72R0YC]

The increase was helped by a 22 percent rise in sales to
$2.82 billion on the back of consolidation of Ukraine’s Kyivstar
and improvements in macroeconomic conditions.

Its operating income before depreciation and amortisation
(OIBDA) increased 15 percent to $1.25 billion for an OIBDA
margin of 44.5 percent versus 47.1 percent a year ago.

Izosimov forecast the margin in mid-40s for the first half
and also told a press conference it is seen returning to target
level of more than 45 percent in the second half of 2011.
(Reporting by Anastasia Teterevleva and Maria Kiselyova;
Editing by Mike Nesbit)

UPDATE 2-Vimpelcom’s Q4 earnings up 63 pct, beats forecast