VEON reports 1.3% Q1 sales drop; local currency revenue up 0.3%

7 May 2020

NASDAQ and Euronext Amsterdam-listed telecoms group VEON has reported its results for the first quarter ended 31 March 2020, with total revenue falling 1.3% year-on-year to USD2.097 billion, although in local currency terms revenues were up by 0.3% across all subsidiaries as operational weakness in Russia was offset by stronger performance in countries including Ukraine and Kazakhstan, underpinned by growth in data usage facilitated by continued network investment. VEON added that, excluding negative impact from tax regime changes in Pakistan, consolidated revenue would have increased in local currency terms by 2.7% y-o-y.

VEON’s largest operating unit Beeline (Russia) earned USD1.020 billion revenue in Q1 2020 – 48.6% of consolidated sales – down 2.6% y-o-y in both reported and local currency terms. Second biggest division Jazz (Pakistan) reported a 12.7% y-o-y turnover drop to USD316 million (a 2.6% fall in local currency terms), while third largest subsidiary Kyivstar (Ukraine) achieved 26.5% and 16.1% y-o-y gains in reported and local currencies respectively, posting USD238 million in revenue for January-March 2020.

Group EBITDA stood at USD920 million in the first three months of 2020, a decline of 29.1% in reported terms, although local currency EBITDA fell by only 1.8%. Russia accounted for EBITDA of USD427 million (down 8.7%, or 8.9% in local currency); Pakistan USD147 million (down 19.8%, or 10.7% in local currency); and Ukraine USD161 million (up 36.4%, or 25.3% in local currency). Group operational CAPEX reached USD368 million in 1Q20, 5.4% lower than in 1Q19.

VEON’s consolidated mobile subscriber base stood at 211 million at 31 March 2020, near-flat (-0.1%) y-o-y, with customer declines in Uzbekistan, Algeria and Russia partially offset by increases in Pakistan and Bangladesh. Total fixed broadband customers rose 9.0% y-o-y to 4.3 million.

Regarding the ramifications of COVID-19, VEON noted that the pandemic has resulted in greater demand for its broadband and digital services, offset by a decline in roaming revenues. Given continued uncertainty related to COVID-19 and the likely impact on the group’s financial performance in the coming quarters, VEON decided it is ‘no longer prudent’ to give financial guidance for 2020.

Netherlands, Pakistan, Russia, Ukraine, Beeline (Russia), Jazz (formerly Mobilink/Warid), Kyivstar, VEON