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Certain amounts and percentages that are used here have been subject to rounding adjustments. As a result, certain numerical figures shown as total including in tables may not be exactly arithmetic aggregations of the figures that proceed or follow them. If you have not received a copy of the second quarter 2012 financial and operating results release, please contact investor relations at +31207977234 and it will be forwarded to you. In addition, the earnings release and the earnings presentation, each of which includes reconciliations of non-GAAP financial measures presented on this conference call can be downloaded from the VimpelCom website.At this time, I’d like to turn the call over to Jo Lunder, Chief Executive Officer of VimpelCom. Please go ahead. Jo O. Lunder Thank you. Good morning to those in Europe and good morning to our guests from the United States and welcome to our second quarter earnings presentation. Let me start by introducing the members of the team here in Amsterdam. We have Henk van Dalen, our Chief Financial Officer, who will be covering the financials in detail and Gerbrand Nijman, our Head of Investor Relations. The Group performance led to a 4% organic growth in revenue year-on-year, reaching $5.7 billion. Excluding FX impacts, EBITDA increased 8% compared to the same period last year, leading to a margin of 43.2%. We’re pleased with the continued positive developments in Russia, which experience double-digit EBITDA growth in local currency in the second quarter. Likewise Africa and Asia and CIS also saw the double-digit organic growth in EBITDA. 2012 remains a transition year in Ukraine as the negative effect from the movements to bundled tariff plans is expected to persist for the remainder of the year. In Italy we’re facing a challenging regulatory and economic environment, thus our operations there continue to outperform the market and win as further strengthens its market share in both mobile and fixed.
We also achieved strong subscriber growth in the second quarter with an increase of 8% reaching 208 million mobile subscribers. The largest contribution came from Africa and Asia, but the Company also achieved strong growth in fixed and mobile broadband subscribers in Russia, in Italy and Ukraine.The company was able to deliver a solid performance in the second quarter despite a considerable negative impact from currency movements. Net income reached $488 million, almost a doubling of the last year and we delivered a solid cash flow with net cash from operating activities of $1.35 billion. In relation to the claim by FAS, the Russian Antimonopoly Service against Telenor and Weather II, we have no material updates today. As you know as a result of the injection by the Russian court in relation to the FAS claim, VimpelCom decided to postpone the final 2011 dividend payments decision. We will of course update you if there are any material developments on this topic. Moving on to the performance of the five business units, starting with Russia. In Russia the Company continued to maintain the positive operating trends seen in the first quarter. The business saw organic revenue growth of 8% while EBITDA increased 12% leading to an EBITDA margin of 43.1%. The highest margin we’ve recorded in the last five quarters. The 8% growth in total revenues were supported by a 35% increase in mobile data revenues as we continue to promote mobile data services. On the operational excellence program, we’re also making significant progress. In order to improve the effectiveness and efficiency of our distribution, we’re implementing a full revenue sharing model with our dealers. This enables us to reduce subscriber acquisition costs and it also supports our efforts to reduce churn. Our churn rate decreased from 17% in the first quarter to 15% in the second quarter, but more work is required. Read the rest of this transcript for free on seekingalpha.com