VEON Reports 2Q20 Results

AMSTERDAM, Aug. 6, 2020 /PRNewswire/ -- VEON Ltd. (NASDAQ: VEON) (Euronext Amsterdam: VEON), a leading global provider of connectivity and digital services, today announces results for the quarter ended 30 June 2020.KEY POINTS

Lockdowns across our operating markets put pressure on both our operational and financial performance during the quarter before gradual relaxations enabled a steady late-quarter improvement across a number of markets.A 

Our operations were impacted by, amongst others, store closures, the loss of roaming and migrant customer revenues, and lower equipment and accessory sales.

Lockdowns have accelerated digital adoption, driving additional growth in self-care and digital customers, demand from which we are meeting through our sustained program of 4G network investment.

Our ongoing focus on cost control allowed the Group to mitigate the impact of declining revenues on Group EBITDA margins and will remain a key priority for the remainder of the financial year.

Strong demand for digital services enabled us to continue to grow data revenues at a double-digit pace and contributed to positive underlying performances from Ukraine, Kazakhstan and Pakistan.

The Group has continued to enhance its capital structure during the COVID-19 pandemic through debt refinancing that supported a 100bp reduction in borrowing costs during the quarter and a further extension of debt maturities.

Russia's operational performance was challenged by ARPU and margin pressures as the lockdown constrained revenue opportunities and continued network investment lifted costs.

Our commitment to a turnaround of our Russian business remains resolute and is underpinned by considerable network investment, the financial benefits of which we anticipate in the first half of FY 2021.

We are reintroducing financial guidance for FY 2020 and anticipate a steady recovery in Group revenue and EBITDA during the second half of the financial year, assuming the gradual lifting of lockdown measures continues.

The long-term growth opportunities offered by our markets remain highly attractive and lockdowns have drawn forward demand for digital services, which we are well-positioned to capture through current levels of network capex.

The impact of the COVID-19 pandemic on our performance is not at this time anticipated to have a significant impact on our capex plans for FY 2020.

KAAN TERZIOA?LU AND SERGI HERRERO, CO-CHIEF EXECUTIVE OFFICERS, COMMENT:"The second quarter of 2020 saw the full impact of the COVID-19 pandemic on activity across our operating markets. National and local lockdowns deepened the reliance of our customers on connectivity services as the challenges of physical isolation intensified. Safeguarding lives, sustaining livelihoods and enhancing lifestyles continued to define VEON's commitment to our customers throughout as we help them adapt to the unprecedented challenges presented by this crisis."Cost reduction remains a key priority for the Group as we seek to limit the financial impact of lockdown measures on our operating performance. Planned restructuring of our headquarters and reductions in our staff-related costs in the second quarter lessened the margin impact of lower revenues. This was achieved despite higher network opex, particularly in Russia where we continued to invest in our 4G infrastructure to ensure our customers can enjoy best-in-class experiences of our services. Growth in our B2B business, mobile data revenue and home connectivity services are encouraging signs of consumer confidence. Across our markets, we remain committed to expanding our 4G networks in order to meet the considerable demand from our customers for data, which continued to grow at a double-digit pace during the second quarter as lockdowns accelerated adoption of our expanding range of digital services.
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