Veon reported second-quarter revenues down 16.3 percent year-on-year to USD 1.89 billion, hurt by store closures and reduced roaming due to Covid-19 restrictions. EBITDA was down 18.7 percent to USD 809 million. The operator said it expects a gradual recovery in sales and EBITDA in the second half of the year, assuming lockdown restrictions are slowly lifted.
On an organic basis, excluding currency effects and a one-off item in Kazakhstan last year, revenue fell 6.9 percent in Q2 and EBITDA was down 7.7 percent. Data revenue growth remained strong, up 14.4 percent at constant currencies, supported by growth in Ukraine (+13.1%), Pakistan (+27.6%) and Bangladesh (+30.3%) and ongoing 4G investments.
The mobile customer base was still down 3.4 percent year-on-year to 205 million, led by a drop in Russia. Veon said it remains committed to turning around the Russian business and hopes to see its increased network investment there start to pay off in better results in the first half of 2021. Fixed broadband subscribers were up 8.4 percent to 4.3 million.
Net profit more than doubled, to USD 156 million from USD 69 million a year ago. Veon invested USD 492 million in capex in the quarter, up 9.5 percent from a year earlier and equal to 20.8 percent of revenues. Equity free cash flow after licenses turned to a negative USD 36 million from a positive USD 231 million a year earlier.
Net debt was little changed year-on-year at USD 8.17 billion, equal to 2.2 times annual EBITDA. Veon said refinancing activities this year have decreased the average cost of debt to 6.4 percent and improved average debt maturity to 2.8 years. Liquidity including cash and undrawn credit facilities totaled USD 2.5 billion at the end of June.
For the full year, the company expects a low to mid-single-digit decline in revenue and EBITDA at constant currency rates. This assumes a slow resumption of roaming revenues and migrant customers as travel resumes and a partial, more gradual shift in urban populations back to urban centers as workplaces reopen. Operational trends were already starting to improve in June and July as some restrictions were lifted, the company said. Capex is forecast to reach 22-24 percent of revenues in 2020.
