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Does anyone still remember the old Soviet Union? The Iron Curtain. The Cold War. The Cuban Missile crisis. The Bear from the east was once a source of paranoia and fear for the good old USA. Nope…no one remembers the Soviet Union anymore. Now when we think of the old Soviet Bloc, we only think about freezing cold martinis with shards of crushed ice, olives as big as my head and Stolichnaya vodka.
Aaaaah That was delicious. Now how do I drive back to work? Of course no one could ever write the history of the Soviet Union without dedicating a chapter to Nikolai Volkoff.
Now there were other great men from the Soviet Union. Ivan Koloff, Nikita Koloff, Boris Zukov and Krusher Kruschev. How come all the Russian wrestlers are bald?
Even though it would be difficult to make a choice, all of these great men were Russian VIPs. In their honor, there is a company making the rounds in the old Soviet Bloch which is also quite a VIP. In fact it is VIP.
Today I bought Vimpel Communications at 98.80. I will sell it in 4 – 6 weeks at 112.89. Here is why I like Vimpel:
Vimpel stock is up over 125% in the last year. Look at this excellent chart:
Well the Soviet Union is gone, as are the aforementioned great men. However where once stood the Soviet Union there is now Russia, Belarus, Ukraine, Moldova, Georgia, Armenia, Azerbaijan, Turkmenistan, Uzbekistan, Tajikistian, Kyrgystan and Kazakhstan. Imagine the possibilities!
One of Russia's three largest wireless services providers, VimpelCom's earnings growth has been in the 23% to 46% range through the past three quarters. Sales growth has ranged from 46% to 53%. We’re looking at 42% sales growth in the fourth quarter. Russia is a very exciting place for investors to participate and it is a stable free market. They may still lack the discipline of a free market economy, but they are learning really quickly. Russia, and the adjoining Commonwealth of Independent States regions have lots of oil. Oil, oh the oil. Oh the vodka. Oh the oil. As oil prices climb, Russia’s natural resources become more valuable and its trade balance, and thus its GNP, becomes more and more robust. There is high liquidity in the economy, and as the Soviet infrastructure has ended its useful life, there is going to be a construction boom in Russia and a lot of capital expenditures.
Right now there is tremendous growth in consumer disposable income, which is up about 35% a year. The middleclass in Russia today represents about 25% of the population; the GDP per capita has skyrocketed, moving from $8,000 towards $11,000. On the other hand, people don’t spend money on occupancy because the state sold them their apartments cheap. So they have a lot of money to spend on cars, home improvements, and upgrades in the living conditions. What’s left to do besides share all of the good news with your fellow Russians by yakking on your cell phone. Vimpel’s Russian subscriber base is now over 47 million people while the Average Revenue per user continues to increase.
The beauty of this company lies very simply in its robust earnings and revenue growth. The prospects are so delightful that last Vimpel said on Wednesday its board of directors has recommended shareholders approve paying 2006 dividends, the first in the company's history. The board recommended the AGM, scheduled for June 29, 2007, approves paying 166.88 roubles per ordinary share or about $1.6 per American Depositary Receipt.
Along with the promise of a first time dividend, further proof of VIP’s optimistic cash flow status is the fact that Vimpelcom plans to invest $100 mln in Georgia by 2012 to boost cell-phone penetration. No that’s not Georgia as in Atlanta where Frankie’s Sports Bar is. It’s the Georgia in Russia. Vimpelcom acquired 51 percent of Georgian cellular operator Mobitel last year for $12.6 million. Cell phone penetration in Russia already exceeds 100%, so it is natural to expect that similar penetration will occur in adjoining regions. This translates into awesome growth opportunities for Vimpel and they plan to cover the whole territory of Georgia by the end of 2008,
This expansion follows recent gobbling from Vimpel since last November. New markets include Kazakhstan, Uzbekistan, Tajikistan as well as the Ukraine. The expansions give access to a combined population of more than 100 million. They also improve the VimpelCom network's ability to provide Russian customers with roaming services.
On top of this subscriber growth, the average revenue per subscriber, a key wireless performance metric, increased 12% in Russia. Not bad for a saturated market. But this is peanuts compared to VimpelCom's ARPU increases of 28% in Kazakhstan and the 80% jump among Ukrainian customers.
"You cannot identify a silver bullet here," Chief Executive Alexander Izosimov told analysts during a second-quarter conference call. "It was the systematic work of the last year, and now it has started paying off."
The Russian word vimpel means flames. Now this is nothing like the flames that come out of my ass ignited by the oil residue of Stoly Vodka martinis. But none the less, VIP is el fuego. VimpelCom plans to spend $1.2 billion this year on domestic projects. Those include capacity expansions to carry the additional traffic needed to boost ARPUs. They also include filling gaps in VimpelCom's coverage area.
In early November, Vimpel OTE's 90 percent-controlled Armenian subsidiary for €341.9 million ($457.8 million) in cash and €40 million ($53.6 million) in debt. Now I never went to Armenian school but I know that Armenians are savvy business people and that buying this business will make sense for Vimpel in the long run.
Summary:
*Highest quarterly revenue and OIBDA ever, reaching $1.36
billion and $0.72 billion, respectively.
* Strong Y-o-Y revenue growth of 52.6%.
* Robust ARPU growth in major markets.
* OIBDA growth of 59.5% y-o-y and OIBDA margin of 52.8%.
* Exceptionally strong revenue, OIBDA growth and market share
gain in Kazakhstan.
* Strong subscriber growth in Ukraine.
Can you dig it? It’s all about earnings. Whether they are in Massachusetts, New Jersey, California or Kazakhstan, it’s earnings that make a stock price go up. I have no plans on going to Russia, but I will allow the earnings in this company to buy me some more Stolichnaya. Oh the oil…the oil.
I am HUGE!
$$$MR. MARKET$$$
Aaaaah That was delicious. Now how do I drive back to work? Of course no one could ever write the history of the Soviet Union without dedicating a chapter to Nikolai Volkoff.
Now there were other great men from the Soviet Union. Ivan Koloff, Nikita Koloff, Boris Zukov and Krusher Kruschev. How come all the Russian wrestlers are bald?
Even though it would be difficult to make a choice, all of these great men were Russian VIPs. In their honor, there is a company making the rounds in the old Soviet Bloch which is also quite a VIP. In fact it is VIP.
Today I bought Vimpel Communications at 98.80. I will sell it in 4 – 6 weeks at 112.89. Here is why I like Vimpel:
Vimpel stock is up over 125% in the last year. Look at this excellent chart:
Well the Soviet Union is gone, as are the aforementioned great men. However where once stood the Soviet Union there is now Russia, Belarus, Ukraine, Moldova, Georgia, Armenia, Azerbaijan, Turkmenistan, Uzbekistan, Tajikistian, Kyrgystan and Kazakhstan. Imagine the possibilities!
One of Russia's three largest wireless services providers, VimpelCom's earnings growth has been in the 23% to 46% range through the past three quarters. Sales growth has ranged from 46% to 53%. We’re looking at 42% sales growth in the fourth quarter. Russia is a very exciting place for investors to participate and it is a stable free market. They may still lack the discipline of a free market economy, but they are learning really quickly. Russia, and the adjoining Commonwealth of Independent States regions have lots of oil. Oil, oh the oil. Oh the vodka. Oh the oil. As oil prices climb, Russia’s natural resources become more valuable and its trade balance, and thus its GNP, becomes more and more robust. There is high liquidity in the economy, and as the Soviet infrastructure has ended its useful life, there is going to be a construction boom in Russia and a lot of capital expenditures.
Right now there is tremendous growth in consumer disposable income, which is up about 35% a year. The middleclass in Russia today represents about 25% of the population; the GDP per capita has skyrocketed, moving from $8,000 towards $11,000. On the other hand, people don’t spend money on occupancy because the state sold them their apartments cheap. So they have a lot of money to spend on cars, home improvements, and upgrades in the living conditions. What’s left to do besides share all of the good news with your fellow Russians by yakking on your cell phone. Vimpel’s Russian subscriber base is now over 47 million people while the Average Revenue per user continues to increase.
The beauty of this company lies very simply in its robust earnings and revenue growth. The prospects are so delightful that last Vimpel said on Wednesday its board of directors has recommended shareholders approve paying 2006 dividends, the first in the company's history. The board recommended the AGM, scheduled for June 29, 2007, approves paying 166.88 roubles per ordinary share or about $1.6 per American Depositary Receipt.
Along with the promise of a first time dividend, further proof of VIP’s optimistic cash flow status is the fact that Vimpelcom plans to invest $100 mln in Georgia by 2012 to boost cell-phone penetration. No that’s not Georgia as in Atlanta where Frankie’s Sports Bar is. It’s the Georgia in Russia. Vimpelcom acquired 51 percent of Georgian cellular operator Mobitel last year for $12.6 million. Cell phone penetration in Russia already exceeds 100%, so it is natural to expect that similar penetration will occur in adjoining regions. This translates into awesome growth opportunities for Vimpel and they plan to cover the whole territory of Georgia by the end of 2008,
This expansion follows recent gobbling from Vimpel since last November. New markets include Kazakhstan, Uzbekistan, Tajikistan as well as the Ukraine. The expansions give access to a combined population of more than 100 million. They also improve the VimpelCom network's ability to provide Russian customers with roaming services.
On top of this subscriber growth, the average revenue per subscriber, a key wireless performance metric, increased 12% in Russia. Not bad for a saturated market. But this is peanuts compared to VimpelCom's ARPU increases of 28% in Kazakhstan and the 80% jump among Ukrainian customers.
"You cannot identify a silver bullet here," Chief Executive Alexander Izosimov told analysts during a second-quarter conference call. "It was the systematic work of the last year, and now it has started paying off."
The Russian word vimpel means flames. Now this is nothing like the flames that come out of my ass ignited by the oil residue of Stoly Vodka martinis. But none the less, VIP is el fuego. VimpelCom plans to spend $1.2 billion this year on domestic projects. Those include capacity expansions to carry the additional traffic needed to boost ARPUs. They also include filling gaps in VimpelCom's coverage area.
In early November, Vimpel OTE's 90 percent-controlled Armenian subsidiary for €341.9 million ($457.8 million) in cash and €40 million ($53.6 million) in debt. Now I never went to Armenian school but I know that Armenians are savvy business people and that buying this business will make sense for Vimpel in the long run.
Summary:
*Highest quarterly revenue and OIBDA ever, reaching $1.36
billion and $0.72 billion, respectively.
* Strong Y-o-Y revenue growth of 52.6%.
* Robust ARPU growth in major markets.
* OIBDA growth of 59.5% y-o-y and OIBDA margin of 52.8%.
* Exceptionally strong revenue, OIBDA growth and market share
gain in Kazakhstan.
* Strong subscriber growth in Ukraine.
Can you dig it? It’s all about earnings. Whether they are in Massachusetts, New Jersey, California or Kazakhstan, it’s earnings that make a stock price go up. I have no plans on going to Russia, but I will allow the earnings in this company to buy me some more Stolichnaya. Oh the oil…the oil.
I am HUGE!
$$$MR. MARKET$$$
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