VEON’s Q2 revenues fall 16.3% in USD terms

6 Aug 2020

Multinational telecoms group VEON has reported its results for the quarter ended 30 June 2020, in which it highlighted that COVID-19 lockdowns across its markets put pressure on operational and financial performance before gradual relaxations enabled a late-quarter improvement in certain countries. Operations were impacted by store closures, the loss of roaming and migrant customer revenues, and lower equipment and accessory sales. On the positive side, lockdowns accelerated digital adoption, driving additional growth in self-care and digital customers, demand from which VEON said it was meeting through its sustained programme of 4G network investment. It added that strong demand for digital services enabled data revenues to continue growth at a double-digit pace and contributed to ‘positive underlying performances’ from Ukraine, Kazakhstan and Pakistan. VEON also stated that its ongoing focus on cost control mitigated the impact of declining revenues on group EBITDA margins.

Revenues in Q2 2020 reached USD1.892 billion, down 16.3% year-on-year on a reported basis (down 6.9% in local currency terms) while EBITDA stood at USD809 million, an 18.7% drop (down 7.7% in local currency). CAPEX was up 9.5% y-o-y in April-June 2020, to USD492 million, reflecting continued 4G investments in all operating companies. Net profit attributable to shareholders for the period was USD156 million, up 124.8% compared to the year-ago quarter. The total active mobile subscriber base stood at 205 million at 30 June 2020, a 3.4% y-o-y decrease. Fixed broadband subscribers grew 8.4% to 4.3 million.

Revenues at VEON’s largest operating division, Russia (Beeline), fell 19.3% in reported terms to USD907 million (down 9.7% in local currency), while second largest unit Pakistan (Jazz) witnessed a 17.2% (7.9% local currency) revenue fall to USD288 million. Third biggest division, Ukraine’s Kyivstar, reported a 5.5% (6.8% local currency) improvement in revenue to USD223 million.

VEON reintroduced FY 2020 financial guidance, anticipating ‘a steady recovery in operations in 2H20, subject to the gradual lifting of lockdown measures: expecting a low to mid-single-digit local currency y-o-y decline in both group revenue and EBITDA.’

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