VEON trading update: Operational momentum continues with 4.3%
service revenue and 3.9% EBITDA growth year-to-date in reporting
currency
VEON trading update: Operational
momentum continues with 4.3% service revenue and 3.9% EBITDA growth
year-to-date in reporting currency
Growing 4G penetration and continued execution of
digital operator strategy drives the performance for the first 8
months
Amsterdam, 16 September 2022 –
VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a global
digital operator that provides converged connectivity and services,
today announces a trading update for the first eight months of 2022
(“8M22”).
VEON Group 8M22 consolidated revenue was up by
3.1% year-on-year (“YoY”) in reported currency, and by 6.5% YoY in
local currency terms, with five of our seven countries reporting
double-digit local currency revenue growth for the period. Reported
currency service revenue was up by 4.3% YoY and by 7.8% YoY in
local currency terms. Reported currency EBITDA was up 3.9% YoY,
with local currency EBITDA growing by 7.9% YoY. Adjusting for
Georgia, like-for-like local currency service revenue increased
8.0% YoY with EBITDA up 8.1% YoY.
During July and August (“QTD”), service revenue
was up by 7.9% YoY in reported currency and up by 6.5% YoY in local
currency. EBITDA increased by 2.4% YoY in reported currency and by
2.3% YoY in local currency in the first two months of Q3. Adjusting
for Georgia QTD like-for-like local currency service revenue
increased 7.2% YoY with EBITDA up 3.0% YoY.
On 5 August 2022, we completed the sale of our
stake in the Algerian operator Djezzy to our partner FNI, for which
VEON received USD 682 million. The Group’s total cash and deposits
amounted to approximately USD 3.2 billion, including USD 2.5
billion equivalent of USD- and EUR-denominated cash and deposits
held by the headquarters in Amsterdam as of 31 August 2022.
In August 2022, Kyivstar acquired a controlling
stake in the e-health platform Helsi in Ukraine, which is known as
a provider of Software-as-a-Service (SaaS) solutions for medical
information systems that are used by more than 1,600 public and
private healthcare institutions throughout Ukraine; more than 30
million people have registered in the system with 13 million people
having used the web platform in the first eight months of the year
making 4.5 million visits every month to specialists in person, and
10 thousand online consultations.
Our digital financial services platform JazzCash
in Pakistan increased its monthly active users (“MAUs”) by 17.6%
YoY, reaching 16.1 million MAUs, while the digital entertainment
service Toffee in Bangladesh launched revenue generation for
content creators. By the end of August, VEON Group’s total
subscriber base was up 1.5% YoY to 203.5 million while 4G users
increased 16.5% YoY to 105.8 million reaching 52.0% of our customer
base.
Group CEO Kaan Terzioglu commented:
“The start of the third quarter of 2022
demonstrated continued operational momentum across the Group,
supported by our focused 4G rollout and digital operator
transformation. Multiplay users increased as we continue to enhance
and expand the digital services that our customers value.”
“Our continued focus on inflationary pricing
together with the growing subscriber base and increased 4G
penetration supported YoY revenue and EBITDA growth during July and
August both in reported and in local currencies. VEON’s liquidity
position remains strong, with USD 3.2 billion in cash at the end of
August, of which USD 2.5 billion was held at HQ level.”
Key Financial KPIs Period ended 31 August USD million |
QTD 2022 |
QTD 2021 |
YoY reported |
YoY local currency |
YTD 2022 |
YTD 2021 |
YoY reported |
YoY local currency |
Total
revenue, of which: |
1,395 |
1,338 |
4.2% |
2.7% |
5,226 |
5,070 |
3.1% |
6.5% |
- Total service revenue |
1,319 |
1,222 |
7.9% |
6.5% |
4,884 |
4,681 |
4.3% |
7.8% |
EBITDA |
604 |
590 |
2.4% |
2.3% |
2,290 |
2,205 |
3.9% |
7.9% |
Capex |
246 |
245 |
0.5% |
|
996 |
1,124 |
(11.4%) |
|
Capex
intensity |
21.4% |
25.0% |
(3.7p.p.) |
|
|
|
|
|
Cash and cash equivalents |
3,218 |
|
|
|
|
|
|
|
Cash and
cash equivalents at HQ level |
2,545 |
|
|
|
|
|
|
|
Net
debt |
8,134 |
|
|
|
|
|
|
|
Net
debt, excluding leases |
5,038 |
|
|
|
|
|
|
|
Additional informationView the
full trading update
Non-recurring items that affect
year-on-year comparisonsOn 8 June 2022, VEON announced
completion of the sale of VEON Georgia LLC, VEON’s operating
subsidiary in Georgia. Georgia results were deconsolidated from
VEON Group numbers following the date of sale. The Georgian
operations do not contribute to either the comparison base or the
actual reported numbers of customer base, 4G users and 4G
penetration.
Following the exercise of the put option for our
stake in Algeria on 1 July 2021, the Algerian business has, in line
with the requirements of IFRS 5, become a discontinued operation,
and was accounted for as “held for sale.” On 5 August 2022, VEON
completed the sale of the Algerian business. The result is that the
Algerian operations do not contribute to VEON’s comparison base or
actual reported numbers in this press release.
DisclaimerVEON’s results
presented in this press release are, unless otherwise stated, based
on IFRS and have not been externally reviewed and audited. The
financial information included in this press release is preliminary
and is based on a number of assumptions that are subject to
inherent uncertainties and subject to change. The financial
information presented herein is based on internal management
accounts, is the responsibility of management and is subject to
financial closing procedures which have not yet been completed and
has not been audited, reviewed or verified. Certain amounts and
percentages that appear in this trading update have been subject to
rounding adjustments. As a result, certain numerical figures shown
as totals, including those in the tables, may not be an exact
arithmetic aggregation of the figures that precede or follow them.
Although we believe the information to be reasonable, actual
results may vary from the information contained above and such
variations could be material. As such, you should not place undue
reliance on this information. This information may not be
indicative of the actual results for the current period or any
future period.
This press release contains “forward-looking
statements”, as the phrase is defined in Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S.
Securities Exchange Act of 1934, as amended. These forward-looking
statements may be identified by words such as “may,” “might,”
“will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “seek,” “believe,” “estimate,” “predict,” “potential,”
“continue,” “contemplate,” “possible” and other similar words.
Forward-looking statements include statements relating to, among
other things, VEON’s plans to implement its strategic priorities,
including operating model and development plans; anticipated
performance, including VEON’s ability to generate sufficient cash
flow; VEON’s assessment of the impact of the COVID-19 pandemic on
its current and future operations and financial condition; VEON’s
assessment of the impact of the conflict surrounding Russia and
Ukraine, including related sanctions and counter-sanctions, on its
current and future operations and financial condition; future
market developments and trends; operational and network development
and network investment, including expectations regarding the
roll-out and benefits of 3G/4G/LTE networks, as applicable;
spectrum acquisitions and renewals; the effect of the acquisition
of additional spectrum on customer experience; VEON’s ability to
realize the acquisition and disposition of any of its businesses
and assets and to execute its strategic transactions in the
timeframes anticipated, or at all; VEON’s ability to realize
financial improvements, including any expected reduction of net
pro-forma leverage following the successful completion of certain
dispositions and acquisitions; our dividends; and VEON’s ability to
realize its targets and commercial initiatives in its various
countries of operation.
The forward-looking statements included in this
press release are based on management’s best assessment of VEON’s
strategic and financial position and of future market conditions,
trends and other potential developments. These discussions involve
risks and uncertainties. The actual outcome may differ materially
from these statements as a result of, among other things: further
escalation in the conflict surrounding Russia and Ukraine,
including further sanctions and counter-sanctions and any related
involuntary deconsolidation of our Russian and/or Ukrainian
operations; further unanticipated developments related to the
COVID-19 pandemic, such as the effect on consumer spending, that
has negatively affected VEON’s operations and financial condition
in the past; demand for and market acceptance of VEON’s products
and services; our plans regarding our dividend payments and
policies, as well as our ability to receive dividends,
distributions, loans, transfers or other payments or guarantees
from our subsidiaries; continued volatility in the economies in
VEON’s markets; governmental regulation of the telecommunications
industries; general political uncertainties in VEON’s markets;
government investigations or other regulatory actions; litigation
or disputes with third parties or regulatory authorities or other
negative developments regarding such parties; the impact of export
controls and laws affecting trade and investment on our and
important third-party suppliers' ability to procure goods, software
or technology necessary for the services we provide to our
customers; risks associated with data protection or cyber security,
other risks beyond the parties’ control or a failure to meet
expectations regarding various strategic priorities, the effect of
foreign currency fluctuations, increased competition in the markets
in which VEON operates and the effect of consumer taxes on the
purchasing activities of consumers of VEON’s services.
Certain other factors that could cause actual
results to differ materially from those discussed in any
forward-looking statements include the risk factors described in
VEON’s Annual Report on Form 20-F for the year ended 31 December
2021 filed with the U.S. Securities and Exchange Commission (the
“SEC”) on 29 April 2022 and other public filings made from time to
time by VEON with the SEC. Other unknown or unpredictable factors
also could harm our future results. New risk factors and
uncertainties emerge from time to time and it is not possible for
our management to predict all risk factors and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. Under no circumstances should the
inclusion of such forward-looking statements in this press release
be regarded as a representation or warranty by us or any other
person with respect to the achievement of results set out in such
statements or that the underlying assumptions used will in fact be
the case. Therefore, you are cautioned not to place undue reliance
on these forward-looking statements. The forward-looking statements
speak only as of the date hereof. We cannot assure you that any
projected results or events will be achieved. Except to the extent
required by law, we disclaim any obligation to update or revise any
of these forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made, or to reflect the occurrence of
unanticipated events. Furthermore, elements of this release contain
or may contain, “inside information” as defined under the Market
Abuse Regulation (EU) No. 596/2014.
About VEONVEON is a digital
operator that provides converged connectivity and digital services
to over 200 million customers. Operating across seven countries
that are home to more than 8% of the world’s population, VEON is
transforming lives through technology-driven services that empower
individuals and drive economic growth. Headquartered in Amsterdam,
VEON is listed on NASDAQ and Euronext.
For more information visit:
https://www.veon.com.
Contact InformationVEONInvestor
RelationsNik Kershawir@veon.com
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