Veon reported strong underlying results in the first quarter, ahead of its full-year outlook, with organic revenues up 7.4 percent and adjusted EBITDA up 37 percent. The company said it saw a strong performance in its largest markets Pakistan, Ukraine, Bangladesh and Russia, and also benefited from cost-cutting efforts and the USD 350 million settlement with Ericsson.
Reported revenues were still down 5.6 percent year-on-year to USD 2.12 billion due to negative currency effects. On an organic basis, service revenue rose 5.5 percent, and mobile data revenue was up 26.4 percent.
EBITDA benefited from the new IFRS 16 accounting rules and rose 52 percent on a reported basis to USD 1.30 billion. Excluding the accounting impact, EBITDA increased to USD 1.17 billion, boosted by exceptional income of USD 350 million from the revised deal with Ericsson, which more than offset currency headwinds of USD 119 million, Veon said. Cost intensity improved by 1.9 percentage points year on year, in line with the company's goal to cut the ratio by at least 1 percent point a year through 2021.
The net result improved to a profit of USD 530 million from a loss of USD 88 million a year ago. Capex excluding licences was up 25 percent year-on-year to USD 444 million or 16.8 percent of revenues, and equity free cash flow increased 36.8 percent to USD 457 million, after the company received half the payment from Ericsson. The other half will be received in Q2. Net debt fell 7.8 percent to USD 8.27 billion, with leverage down to 2.2x from 2.5x a year earlier.
Veon ended the quarter with 211 million mobile customers, largely stable on an annual basis as customer growth in Pakistan, Algeria and Bangladesh was offset by a decrease in the customer base in Russia and Uzbekistan. The fixed broadband base rose to 3.9 million from 3.6 million a year ago.
