Veon reported a net loss and small drop in sales and EBITDA in the fourth quarter, hurt by negative currency effects and weakness in markets such as Algeria and Bangladesh. On an organic basis, the company saw a small increase in results and said it expects flat to low single-digit growth in sales and EBITDA in 2018. After an improvement in cash flow, the company confirmed a 22 percent increase in its annual dividend.
Quarterly revenues fell 1.4 percent to USD 2.32 billion, hurt mainly by the Uzbek currency's drop, and EBITDA was down 3.8 percent to USD 753 million. On an organic basis, sales rose 1.2 percent and EBITDA was 0.4 percent higher. The net result was a loss of USD 375 million, after a profit of USD 1.56 billion a year ago on a one-time gain from the Wind Tre venture in Italy.
Over the full year, Veon reported organic growth of 1.9 percent in revenues and 7.5 percent in EBITDA. Capital expenditure, excluding spectrum, fell 8.4 percent to USD 1.46 billion, helping underlying equity free cash flow improve 31.4 percent to USD 1.07 billion. The latter was supported by the repatriation of an initial USD 200 million from Uzbekistan.
In 2018, Veon said it expects a continued impact from the Uzbekistan’s currency liberalization and a number of strategic transactions, including the Pakistan tower sale and the integration of the Euroset business in Russia. The company's takeover of Global Telecom has been delayed by disputed tax claims from Egyptian authorities, and Veon said it was "considering all options" for the deal.
The company forecast flat to low single-digit organic growth for both group revenue and EBITDA in 2018. Equity free cash flow is expected to improve further, to around USD 1 billion from USD 804 million under new accounting definitions in 2017.
Veon proposed a final dividend of 17 cents a share, bringing the total amount for 2017 to USD 0.28. The company said it's committed to paying a progressive dividend based on free cash flow but did not provide an outlook for the 2018 payment.
