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VEON reports 4.1% consolidated revenue drop for 2018

25 Feb 2019

NASDAQ and Euronext Amsterdam-listed telecoms group VEON reported that its total revenues declined 4.1% in full-year 2018 to USD9.086 billion, although the company added that its underlying organic (local currencies) revenue climbed 3.5%. Russian revenues (mobile and fixed) dropped 1.6% to USD4.654 billion (up 2.3% in local currency), accounting for 51.2% of the group total, whilst Pakistan was the second largest revenue earner with USD1.494 billion, down 2.0% (up 13.1% in local currency). Algeria (USD813 million), Bangladesh (USD521 million) and Uzbekistan (USD315 million) units also reported revenue declines, although Ukraine (Kyivstar) posted a 10.6% annual sales climb to USD688 million. ‘Other’ units contributed USD601 million (up 1.1%).

Annual group EBITDA fell 8.8% to USD3.273 billion but net income attributable to VEON shareholders jumped to USD362 million (compared to 2017’s net loss of USD534 million) largely due to the sale of VEON´s stake in Italian joint venture Wind Tre which was completed in September 2018. Targets for FY 2019 include ‘low single-digit organic growth’ in revenue and ‘low to mid-single digit organic growth’ in EBITDA.

The VEON group’s consolidated total mobile customer base reached 210 million at end-December 2018, down from 211 million a year earlier, while fixed line broadband customers rose to 3.8 million from 3.4 million. Russian (Beeline) mobile customers stood at 55.3 million at end-2018, down from 58.2 million in 4Q17, and Russian broadband customers rose from 2.2 million to 2.4 million in the same period.

VEON also announced it has revised an agreement with Ericsson to upgrade its core IT systems in several countries whilst releasing Ericsson from a commitment to provide a Full Stack Revenue Manager Solution, which will result in a return payment to VEON of USD350 million during H1 2019. A press release stated: ‘This revised arrangement enables VEON to continue upgrading IT infrastructure with new digital business support systems (DBSS) using existing software from Ericsson which is already deployed in certain operating companies within VEON. This upgrade is expected to support the creation of a more personalised, richer experience of VEON’s services for customers and, over time, reduce overall operating costs.’ Yogesh Malik, VEON CTO, added: ‘With Ericsson’s support, we have successfully digitised the core of our operations in Algeria and Georgia during the past year, and can see its positive impact.’

Netherlands, Russia, Beeline (Russia), Ericsson, VEON

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