VEON’s Q4 revenues, EBITDA down 1.4%, 3.8%

22 Feb 2018

Amsterdam-based, Russian-backed multinational group VEON’s total reported revenue decreased 1.4% year-on-year to USD2.320 billion in the fourth quarter of 2017, although it said this was mainly due to significant devaluation of Uzbekistan’s currency. Organic revenue grew 1.2%, driven by Russia, Pakistan, Ukraine and Uzbekistan, partially offset by continued revenue pressure in Algeria and Bangladesh. Russian (Beeline) revenue climbed 8.4% y-o-y in October-December 2017 to USD1.206 billion, although Russian mobile subscriptions dropped 0.3% to 58.2 million. Consolidated group mobile customers (excluding Italy’s Wind Tre joint venture) increased from 207.2 million at end-2016 to 210.5 million at 31 December 2017, whilst VEON’s total fixed network customers rose from 3.1 million to 3.4 million in the same period. Wind Tre reported 29.5 million mobile (down from 31.3 million) and 2.7 million fixed (up from 2.3 million) customers at end-2017.

The group’s reported EBITDA decreased 3.8% to USD753 million in Q4 2017, again mainly due to Uzbek currency devaluation, partially offset by lower exceptional costs. Underlying EBITDA, excluding exceptional costs, decreased organically by 6.9% due to local EBITDA drops in Russia, Algeria and Bangladesh, and increased corporate costs. Underlying EBITDA margin of 35.1% was down 3.1 percentage points y-o-y, and below target, due to margin pressure in Russia, Algeria and Bangladesh.

In other notable events, December 2017 saw VEON successfully repatriate – for the first time – USD200 million from its Uzbekistan subsidiary (Unitel, Beeline). Post-period, Ukrainian and Bangladeshi units Kyivstar and Banglalink both acquired their first 4G LTE licences in January and February 2018, respectively.

VEON also gave an update on its Mandatory Tender Offer submitted in November 2017 for an additional 42.3% of shares in its majority-owned Egypt-based subsidiary division Global Telecom Holding (GTH), noting that the offer remains subject to approval by the Egyptian Authorities. The group added: ‘VEON has taken all actions required for such approval and the matter is currently held up in connection with disputed GTH taxes. Our desire is to find a path forward with the Egyptian Authorities and we are considering all options.’

Netherlands, Russia, Beeline (Russia), Beeline (Unitel), Global Telecom Holding (GTH, formerly OTH), VEON