14 May 2018
Amsterdam-based, Russian backed telecoms group VEON reported that total revenue grew organically (excluding effects of foreign currency exchange and M&A) by 3.2% year-on-year in the first quarter of 2018, driven by Russia, Pakistan, Ukraine and Uzbekistan, partially offset by continued pressure in Algeria and Bangladesh. However, total revenue decreased on a reported basis by 1.4% to USD2.25 billion, mainly due to significant devaluation of the Uzbek and Pakistani currencies. Similarly, EBITDA grew by 6.3% organically in Q1 2018 driven by good operational performance in Russia, Pakistan and Ukraine, partially offset by declining EBITDA in Algeria and Bangladesh, whilst reported quarterly EBITDA decreased 0.8% to USD854 million, primarily due to Uzbek and Pakistani currency effects, as well as integration costs related to a major handset retailer transaction. In February 2018 VEON’s Russian division PJSC VimpelCom (Beeline) and mobile rival MegaFon completed a transaction to end their joint ownership of Russian retail chain Euroset – with Beeline acquiring half of Euroset’s stores and paying MegaFon around USD20 million, while the latter acquired Beeline’s 50% interest to take full ownership of the remaining company.
VEON’s total consolidated mobile customers grew 1.8% year-on-year to 210 million at 31 March 2018, whilst fixed broadband customers climbed 5.9% to 3.6 million (excluding Italian joint venture Wind Tre). Recent 4G mobile licensing/launches in Ukraine (Kyivstar) and Bangladesh (Banglalink) mean that VEON’s subsidiaries now offer LTE in all group markets, whilst in other recent developments VEON completed the sale of its Laos operations to the local government, and it also entered into an agreement to sell its 98% share in Tajikistan’s Tacom, subject to regulatory approvals.
Net loss for the three-month period attributable to VEON shareholders widened to USD109 million (compared to USD5 million in 1Q17), influenced by net foreign exchange loss jumping to USD127 million (from USD21 a year earlier) and lower appreciation of the Russian ruble, as well as the group’s share of loss of joint ventures and associates (which climbed to USD130 million in Q1 2018 compared to USD101 million in the year-ago quarter).