SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMC NEWS

TMCNET eNEWSLETTER SIGNUP

VEON Announces Q2 2017 Results
[August 03, 2017]

VEON Announces Q2 2017 Results


AMSTERDAM, Aug. 3, 2017 /PRNewswire/ --

Q2 2017 KEY RESULTS

  • Total revenue increased 12.3% year on year, and 3.7% organically1 - a result of strong revenue performance in Russia, Pakistan, Ukraine and Uzbekistan despite continued, but reduced, pressure in Algeria
  • Mobile service revenue growth was particularly positive, increasing 4.3% in organic terms (with mobile data growing organically by 30.5% year on year); fixed-line service revenue declined in organic terms by 11.5%
  • Reported EBITDA increased 17.1% year on year and 10.6% organically1 with a margin of 38.5%
  • Net loss for the period attributable to VEON shareholders of USD 278 million was mainly caused by exceptional items such as Euroset impairment of USD 110 million, the USD 85 million share of net loss recorded by the Group in respect of Italy JV, resulting from integration costs and accelerated depreciation and amortization, and early redemption premiums for bond repurchases of USD 124 million)
  • Underlying equity free cash flow excluding licenses3 of USD 293 million up from USD 243 million in Q2 2016
  • FY 2017 targets4 confirmed with single digit revenue growth, EBITDA margin accretion and underlying equity free cash flow excluding licenses3 of USD 900 million to USD 1 billion

MAIN EVENTS

  • Supervisory Board of VEON approved an interim dividend 2017 of US 11 cents per share to be paid on 6 September 2017
  • VEON, the personal internet platform, launched in 5 countries
  • VEON and MegaFon to end their Euroset joint venture in Russia
  • Substantive refinancing activities completed in Q2 2017, simplifying the capital structure
  • AGM elected two new independent directors with Ursula Burns appointed Chairman of the Supervisory Board
  • Jazz acquired additional 4G/LTE spectrum in Pakistan

VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON) a leading global provider of connectivity and internet services headquartered in Amsterdam and serving over 235 million customers, today announces financial and operating results for the quarter ended 30 June 2017.

KEY RESULTS: CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS



USD million

2Q17

2Q16
pro-forma Warid5

2Q16
reported

Reported
YoY

Organic
YoY 1

Total revenue, of which 

2,417

2,228

2,153

12.3%

3.7%

   mobile and fixed service revenue

2,331

2,158

2,086

11.8%

3.4%

   of which mobile data revenue

465

340

333

39.6%

30.5%

EBITDA

931

811

795

17.1%

10.6%

EBITDA underlying 2

977

928

913

7.0%

1.5%

EBITDA margin underlying 2(EBITDA underlying/total revenue)

40.4%

41.7%

42.4%

(2.0p.p.)

(0.9p.p.)

Profit/(loss) from continued operations

(258)

(55)

(40)

 n.m 


Profit/(loss) from discontinued operations

-

187

186

 n.m 


Profit/(loss) for the period attributable to VEON shareholders

(278)

122

137

 n.m 


Underlying equity free cash flow 3

293

243

243

20.6%


Capital expenditures excl. licenses

332

307

284

17.2%


LTM capex excl. licenses/revenue

18.4%

17.2%

17.4%

1.0p.p.


Net debt

8,403

 n.a 

6,575

27.8%


Net debt/LTM EBITDA underlying

2.2

 n.a 

1.8



Total mobile customer (millions, excluding Italy)

208

204

194

6.9%


Total fixed-line broadband customers (millions)

3.5

3.4

3.4

4.6%




1)

Organic change reflects changes in revenue and EBITDA excluding foreign currency movements and other factors, such as businesses under liquidation, disposals, mergers and acquisitions (see Attachment C for reconciliations)

2)

Underlying EBITDA excludes transformation costs and material exceptional items, see Attachment C for reconciliations

3)

Underlying equity free cash flow excluding licenses is defined as free cash flow from operating activities less free cash flow used in investing activities (excluding capex for licenses and withholding tax related to Pakistan spectrum of USD 29.5 million), excluding M&A transactions, transformation costs and other one-off items

4)

FY 2017 targets based on pro-forma results for 2016, including 12 months of Warid contribution; organic targets for revenue and underlying EBITDA margin are at constant currency, excluding exceptional items, e.g. transformation costs and M&A. Underlying equity free cash flow excluding licenses is calculated at the target rates for 2017 (see Attachment C)

5)

Pro-forma assuming that the results of Warid have been consolidated (including intercompany eliminations) within VEON's results with effect from 1 January 2016

 

USD million

1H17

1H16
pro-forma Warid5

1H16
reported

Reported
YoY

Organic
YoY 1

Total revenue, of which 

4,698

4,324

4,170

12.7%

1.5%

   mobile and fixed service revenue

4,533

4,180

4,033

12.4%

1.5%

   of which mobile data revenue

901

647

635

42.0%

29.2%

EBITDA

1,792

1,589

1,553

15.3%

6.4%

EBITDA underlying 2

1,868

1,747

1,711

9.1%

1.2%

EBITDA margin underlying 2(EBITDA underlying/total revenue)

39.8%

40.4%

41.0%

 (1.3 p.p.) 

 (0.2 p.p.) 

Profit/(loss) from continued operations

(269)

(36)

(2)

 n.m 


Profit/(loss) from discontinued operations

-

383

383

 n.m 


Profit/(loss) for the period attributable to VEON shareholders

(283)

291

326

 n.m 


Underlying equity free cash flow 3

491

328

328

49.7%


Capital expenditures excl. licenses

595

467

437

36.0%


LTM capex excl. licenses/revenue

18.4%

17.2%

17.4%

1.0p.p.


 

JEAN-YVES CHARLIER, CHIEF EXECUTIVE OFFICER, COMMENTS:
"I am pleased to report a robust second quarter with continued double-digit growth in revenues and EBITDA.  We observed further revenue growth in our core markets of Russia, Pakistan and Ukraine, which saw strong demand for our mobile data services. This momentum translated into further increases in underlying equity free cash flow, allowing us to confirm 2017 guidance. In addition, we are pleased to announce an interim dividend of 11 US cents on the back of our strong financial performance.

VEON's transformation journey to becoming a digital services provider also saw significant progress with the launch of the VEON personal internet platform across five of our major markets. We have withdrawn from the Euroset joint venture in Russia to focus on expanding our monobrand strategy. Furthermore, the simplification of our capital structure continues to make good progress and will bring significant savings.

The Board was also delighted to welcome our new independent Chairman, Ursula Burns, who with Guy Laurence, was appointed as an independent director, further strengthens VEON's corporate governance. Their experience in technology and leading global business transformations adds significant value to our development."

PRESENTATION OF FINANCIAL RESULTS
VEON's results presented in this earnings release are based on IFRS and have not been audited. "EBITDA" or "reported EBITDA" presented in this document is called "Adjusted EBITDA" in the Management's Discussion and Analysis of financial condition and results of operations (MD&A) section.

Certain amounts and percentages that appear in this earnings release have been subject to rounding adjustments. As a result, certain numerical figures shown as totals, including those in tables, may not be an exact arithmetic aggregation of the figures that precede or follow them.

All non-IFRS measures disclosed in the document, i.e. EBITDA, EBITDA margin, underlying EBITDA, underlying EBITDA margin, EBIT, net debt, equity free cash flow, organic growth, capital expenditures excluding licenses, last twelve months (LTM) Capex excluding licenses/Revenue, are reconciled to the comparable IFRS measures in Attachment C.

The financial results for Q2 2016 are also presented on a pro-forma basis assuming that the results of Warid have been consolidated (including intercompany eliminations) within VEON's results with effect from 1 January 2016, in order to assist with the year on year comparisons.

As at 7 November 2016, VEON Ltd. owns a 50% share of the Italy Joint Venture (with CK Hutchison owning the other 50%) and we account for this JV using the equity method as we do not have control. All information related to the Italy Joint Venture is the sole responsibility of the Italy Joint Venture's management, and no information contained herein, including, but not limited to, the Italy Joint Venture's financial and industry data, has been prepared by or on behalf of, or approved by, our management. VEON Ltd. is not making, and has not made, any written or oral representation or warranty, express or implied, of any nature whatsoever, with respect to any Italy Joint Venture information included in this report. For further information on the Italy Joint Venture and its accounting treatment, see "Item 5—Operating and Financial Review and Prospects—Key Developments and Trends—Italy Joint Venture" "Explanatory Note—Accounting Treatment of our Historical WIND Business and the new Italy Joint Venture" and Note 6 to our audited consolidated financial statements included in our Annual Report on Form 20-F for the year ended 31 December 2016.

All comparisons are on a year on year basis unless otherwise stated.

MAIN EVENTS

VEON's SUPERVISORY BOARD HAS APPROVED AN INTERIM DIVIDEND 2017 OF US 11 CENTS PER SHARE
Consistent with the Company's recently communicated commitment to pay a sustainable and progressive dividend based on the evolution of its equity free cash flow, the Supervisory Board approved the distribution of an interim gross dividend of 11 US cents per share for 2017. This payment is planned to take place on 6 September 2017, with a record date of 14 August 2017. For ordinary shareholders at Euronext Amsterdam, the interim dividend of US 11 cents will be paid in euro.

VEON, THE PERSONAL INTERNET PLATFORM LAUNCHED IN 5 COUNTRIES
In July, VEON launched its new global personal internet platform in Russia, Ukraine, Georgia, Pakistan and, with updated functionality, in Italy, covering 134 million potential customers. The VEON platform provides personalized internet services, with a range of messaging and communication capabilities (including chat, calls and sharing) which users can use for free, without worrying about running out of data. The platform gives access to some of the most popular consumer brands, thanks to more than 100 partnerships with both global and local players. The Company intends to roll out the VEON platform in all its markets by the end of 2017.

VEON AND MEGAFON AGREED TO END THEIR EUROSET JOINT VENTURE IN RUSSIA
In July 2017, PJSC VimpelCom, a subsidiary of the Company, entered into a Framework Agreement with Megafon to unwind their retail joint venture, Euroset Holding B.V. ("Euroset"). Under the agreement,  Megafon will acquire PJSC VimpelCom's  50% interest in Euroset and PJSC VimpelCom will pay RUB 1.25 billion (~USD 20 million, subject to possible completion adjustments) and will acquire rights to 50% of Euroset's approximately 4,000 retail stores in Russia. The transaction is subject to relevant regulatory approvals and other conditions precedent, and is expected to be completed in Q4 2017. Following completion of this transaction, VEON intends to double the number of Beeline monobrand stores, which VEON believes will result in churn and ARPU improvements, more upselling opportunities and a higher level of customer service.

SUBSTANTIVE REFINANCING ACTIVITIES COMPLETED IN Q2 2017, SIMPLIFYING THE CAPITAL STRUCTURE
VEON intends to continuously improve its capital structure and rebalance the debt currency mix, with the aim of lowering its net cost of debt. The Company's subsidiary VimpelCom Holdings B.V. has successfully entered into a new RUB 110 billion, five-year term loan agreement with Sberbank. The term loan were utilized to refinance the existing loans between Sberbank and PJSC VimpelCom, as well as provide additional funds for general corporate purposes.

VimpelCom Holdings B.V. also completed an any-and-all cash tender offer for the following notes: (i) USD 1 billion 9.125% Loan Participation Notes due 2018 (USD 499 million o/s), (ii) USD 1 billion 7.748% Loan Participation Notes due 2021 (USD 651 million o/s) and (iii) USD 1.5 billion 7.5043% Guaranteed Notes due 2022 (USD 1,280 million o/s). The aggregate principal amount accepted for purchase pursuant to the offer was equal to approximately USD 1.3 billion, leaving the aggregrate principal amount outstanding, following settlement of the offer, at around USD 1.2 billion.

In connection with the cash tender offer, VimpelCom Holdings B.V. also issued new senior unsecured notes; on 16 June 2017, VimpelCom Holdings B.V. issued USD 600 million 3.95% Senior Notes due 2021 and USD 900 million 4.95% Senior Notes due 2024. The net proceeds of the issue have been utilized to finance the cash tender offer.

Since the beginning of 2017, the Group has been able to restructure or refinance approximately 60% of its debt, leading to enhanced flexibility, an improved currency mix, a lower average cost of debt and a lengthened maturity profile. This will lead to an average interest cost reduction of approximately USD 100 million per annum assuming stable gross debt.

AGM ELECTED TWO NEW INDEPENDENT DIRECTORS, WITH URSULA BURNS APPOINTED CHAIRMAN 
Following the election of the directors of the Supervisory Board at the AGM of 24 July 2017, the Supervisory Board appointed Ursula Burns, the former Chairman and CEO of Xerox, to become its Chairman effective immediately. With the election of Ursula Burns and Guy Laurence, the former CEO of Rogers, the Supervisory Board increased from nine to eleven members.

JAZZ ACQUIRED ADDITIONAL 4G/LTE SPECTRUM IN PAKISTAN
VEON and its subsidiary Global Telecom Holding announced the acquisition of additional 4G/LTE spectrum in Pakistan, through their local 85% owned subsidiary, Jazz. This marks another major milestone in VEON's ambition to become a global digital leader and is expected to improve the customer experience in terms of voice quality, data speeds and connectivity. Jazz won the auction, being awarded 10 MHz of paired spectrum in the 1800 MHz band for a total consideration of USD 295 million and withholding tax of 10%.

GROUP PERFORMANCE - Q2 2017

  • Total revenue increased 12.3% year on year, organic growth of 3.7% year on year
  • EBITDA increased 17.1% and includes exceptional costs of USD 46 million related to performance transformation (which in Q2 2016 amounted to USD 118 million)
  • Underlying EBITDA increased organically by 1.5% year on year; underlying EBITDA margin decreased organically by 0.9 percentage points to 40.4%
  • Underlying equity free cash flow (excluding licenses) of USD 293 million in Q2 2017, which represents an increase of USD 50 million compared to Q2 2016

FINANCIALS BY COUNTRY













USD million

2Q17

2Q16
pro-forma
Warid 

2Q16
reported

Reported
YoY

Organic
YoY


1H17

1H16
pro-forma
Warid 

1H16 reported

Reported
YoY

Organic
YoY

Total revenue

2,417

2,228

2,152

12.3%

3.7%


4,698

4,324

4,169

12.7%

1.5%













Russia

1,197

1,008

1,008

18.7%

3.0%


2,294

1,893

1,893

21.2%

0.4%

Pakistan

385

361

285

35.4%

6.9%


755

712

558

35.5%

6.1%

Algeria

231

251

251

(7.6%)

(8.0%)


463

529

529

(12.5%)

(11.7%)

Bangladesh

148

157

157

(6.0%)

(3.0%)


299

312

312

(4.3%)

(2.1%)

Ukraine

154

146

146

5.0%

10.0%


297

281

281

5.4%

10.8%

Uzbekistan

153

164

164

(7.3%)

20.3%


306

329

329

(7.2%)

15.0%

HQ 

-

-





-

-

-



Other and eliminations

149

141

141

12.4%



284

268

267

12.0%














Service revenue

2,331

2,158

2,085

11.8%

3.4%


4,533

4,180

4,033

12.4%

1.5%













Russia

1,147

980

980

17.0%

1.5%


2,201

1,827

1,827

20.5%

(0.1%)

Pakistan

359

341

269

33.7%

5.4%


705

673

526

34.0%

4.8%

Algeria

228

248

248

(8.0%)

(8.3%)


456

524

524

(13.0%)

(12.2%)

Bangladesh

144

152

152

(5.6%)

(2.6%)


291

305

305

(4.7%)

(2.5%)

Ukraine

153

145

145

5.5%

10.5%


295

280

280

5.5%

11.0%

Uzbekistan

152

164

164

(7.3%)

20.3%


305

329

329

(7.2%)

15.0%

HQ

-

-

-




-

-

-



Other and eliminations

147

135

128

16.0%



280

242

242

15.5%














EBITDA

931

811

795

17.1%

10.6%


1,792

1,589

1,553

15.3%

6.4%













Russia

471

414

414

13.8%

(1.3%)


880

742

742

18.7%

(1.3%)

Pakistan

167

130

115

45.6%

28.3%


321

266

231

39.3%

20.8%

Algeria

105

128

128

(18.4%)

(18.7%)


219

286

286

(24.0%)

(23.0%)

Bangladesh

61

69

69

(11.7%)

(8.9%)


130

139

139

(6.3%)

(4.2%)

Ukraine

87

80

80

8.5%

13.7%


164

151

151

8.2%

13.8%

Uzbekistan

83

94

94

(11.9%)

14.4%


162

194

194

(16.8%)

3.4%

HQ 

(94)

(112)

(112)

(16.3%)



(170)

(237)

(237)

(28.7%)


Other and eliminations

51

8

8

561.3%



86

48

48

80.0%














EBITDA margin

38.5%

36.4%

36.9%




38.1%

36.7%

37.3%















EBITDA underlying 

977

928

913

7.0%

1.5%


1,868

1,747

1,711

9.1%

1.2%













Russia

472

417

417

13.3%

(1.7%)


884

745

745

18.6%

(1.4%)

Pakistan

172

146

129

33.3%

19.1%


333

285

249

33.8%

17.2%

Algeria

105

128

128

(18.4%)

(18.8%)


219

287

287

(23.6%)

(23.0%)

Bangladesh

61

75

75

(18.7%)

(16.1%)


130

149

149

(12.8%)

(10.9%)

Ukraine

88

80

80

10.0%

15.1%


165

151

151

9.5%

15.1%

Uzbekistan

83

94

94

(11.9%)

14.4%


162

191

191

(15.4%)

5.1%

HQ

(66)

(58)

(58)

13.5%



(169)

(148)

(148)

14.3%


Other and eliminations

62

46

46

31.2%



143

89

90

61.0%














EBITDA margin underlying

40.4%

41.7%

42.4%




39.8%

40.4%

40.4%



 

Group revenue for Q2 2017 increased 12.3% year on year to USD 2.4 billion driven by year on year organic growth of 3.7%, currency appreciation and the impact of the Warid transaction with effect from 1 July 2016. The Group showed strong revenue growth in Russia, Pakistan, Ukraine and Uzbekistan, with continued, although alleviating, weakness in Algeria.

Mobile data revenue continued to show strong organic growth of 30.5% and total mobile customers increased 6.9% to 208 million at the end of Q2 2017, primarily driven by the inclusion of Warid's customer base in Pakistan and by further organic customer growth in Pakistan, Ukraine and Uzbekistan.

Group reported EBITDA in Q2 2017 increased 17.1% to USD 931 million while underlying EBITDA was USD 977 million, reflecting an organic increase of 1.5%. The exceptional items of USD 46 million in this period largely relate to the cost of the Group-wide performance transformation program. The reconciliation table for EBITDA and underlying EBITDA is set forth in Attachment C.

For the discussion of each country's individual performances below, all trends are expressed in local currency.

In Russia, total revenue in Q2 2017 increased 3.0%, driven by an increase in mobile service revenue, partially offset by a decrease in voice revenue. Mobile data revenue continued its strong growth, increasing 17.8%. Reported EBITDA decreased by 1.3%, while underlying EBITDA decreased by 1.7%, adjusted for exceptional costs in Q2 2016 and Q2 2017 related to the performance transformation program.

In Pakistan, the Group acquired Warid, strengthening its leading position and, as a result, Warid's financial results have been consolidated into VEON´s financial statements with effect from 1 July 2016. Total revenue grew organically (i.e. including Warid pro-forma for 2016) by 6.9%, mainly due to growth in data and financial services revenues. Data revenue grew organically by 46.2%, driven by an increase in data customers through higher bundle engagement and continued 3G network expansion. Underlying EBITDA, excluding both restructuring costs related to the performance transformation program and integration costs related to the Warid transaction increased organically by 19.1%, while the underlying EBITDA margin was 44.7%, improving by 4.6 percentage points year on year.

In Algeria, total revenue decreased 8.0% as Djezzy continues to operate in a challenging environment with high inflation, an increase of VAT and of taxes on recharges following the new Finance law implemented on 1 January 2017, and also characterized by intense competition on data pricing in particular. The company expects the competitive pressure to continue and is taking corrective measures to turn the business around. Djezzy's service revenue also decreased by 8.3%, while data revenue growth accelerated to 88.9%, due to higher usage and a substantial increase in data customers as a result of the 3G and 4G/LTE network roll-out. Underlying EBITDA, adjusted for exceptional costs related to the performance transformation program in Q2 2017, decreased by 18.8%, mainly due to the revenue decline.

In Bangladesh, total revenue decreased by 3.0%, driven by the 2.6% decline in service revenue. This decline in service revenue was partially caused by the spectrum disadvantage and the resulting gap in 3G network coverage versus the market leader although 3G network population coverage has been increased to 68% during Q2 2017 which reduces this gap. In addition, the market is still characterized by intense price competition which more than offset the continued increase in data revenue of 32.2%. The company's underlying EBITDA decreased by 16.1%, mainly due to the declining revenue trend and customer acquisition activity during the quarter.

In Ukraine, total revenue increased by 10.0% and mobile service revenue grew by 10.9%, driven by successful commercial activities and continued strong growth of mobile data revenue, which grew by 71.6%, driven by growing data customers, successful marketing activities stimulated by the continued 3G roll-out and increased penetration of data-centric tariffs. Underlying EBITDA, adjusted for performance transformation costs in Q2 2016 and Q2 2017, grew by 15.1%.

In Uzbekistan, total revenue increased by 20.3% and mobile service revenue increased by 20.4%, primarily as a result of the impact of Beeline´s price plans being pegged to U.S. dollars. Mobile data revenue increased 28.2%, driven by the continued high-speed data network roll-out, increased smartphone penetration and the launch of new bundled offerings. Underlying EBITDA increased 14.4% driven by the increased revenue, partially offset by higher interconnect costs as a result of both higher off-net usage and a negative currency effect together with increases in content costs, customer costs and structural opex. As a result, the underlying EBITDA margin was a strong 54.3% in Q2 2017.

The "HQ" segment includes the costs of VEON's and GTH's headquarters in Amsterdam, the London digital office and the Eurasia Hub. In Q2 2017, HQ costs decreased year on year due to lower performance transformation costs.

"Other" includes the results of Kazakhstan, Kyrgyzstan, Armenia, Georgia, Tajikistan and intercompany eliminations.

INCOME STATEMENT & CAPITAL EXPENDITURES











USD million

2Q17

2Q16
pro-forma Warid

2Q16
reported

Reported
YoY


1H17

1H16
pro-forma Warid

1H16
reported

Reported
YoY

Total revenue

2,417

2,228

2,153

12.3%


4,698

4,324

4,170

12.7%

Service revenue

2,331

2,158

2,086

11.8%


4,533

4,180

4,033

12.4%

EBITDA

931

811

795

17.1%


1,792

1,589

1,553

15.3%

EBITDA margin

38.5%

36.4%

37.0%

                1.6p.p.


38.1%

36.7%

37.3%

                0.9p.p.

Depreciation, amortization, impairments and other

(542)

(542)

(512)

5.7%


(1,057)

(1,023)

(966)

9.4%

EBIT

389

269

283

37.6%


734

566

587

25.1%

Financial income and expenses

(208)

(194)

(186)

11.3%


(401)

(370)

(354)

13.2%

Net foreign exchange (loss)/gain and others

(169)

19

9

n.m


(90)

40

33

n.m

Share of profit/(loss) of joint ventures and associates

(95)

(12)

(11)

n.m


(196)

(16)

(16)


Impairment of JV and associates

(110)

-

-

n.m


(110)

-

-


Profit/(loss) before tax

(193)

82

95

(302.4%)


(63)

220

250

(125.4%)

Income tax expense

(65)

(137)

(135)

(52.5%)


(206)

(256)

(252)

(18.4%)

Profit/(loss) from continued operations

(258)

(55)

(40)

n.m


(269)

(36)

(2)

n.m

Profit/(loss)  from discontinued operations

-

187

187

n.m


-

383

383

n.m

Profit for the period attributable to VEON shareholders

(278)

122

137

n.m


(283)

291

326

n.m












2Q17

2Q16
pro-forma Warid

2Q16
reported

Reported
YoY


1H17

1H16
pro-forma Warid

1H16
reported

Reported
YoY

Capex

644

371

350

84.5%


912

574

545

68.0%

Capex excl. licenses

332

307

284

17.2%


595

467

437

36.0%

Capex excl.licenses/revenue 

13.7%

13.8%

13.2%

                0.5p.p.






LTM capex excl. licenses/revenue

18.4%

17.2%

17.4%

                1.0p.p.






 

Q2 2017 ANALYSIS
EBIT increased year on year to USD 389 million, due to the EBITDA growth, partially offset by higher amortization driven by the revision of useful life of the Mobilink and Warid brands, following the introduction of the Jazz brand in Pakistan.

The loss before tax of USD 193 million was mainly driven by an increase in financial income and expenses due to the Warid debt consolidation and currency appreciation against the US dollar; net FX losses of USD 53 million (non-cash) as well as early redemption premiums on bond repurchases of USD 124 million; our 50% share of loss of the Wind Tre joint venture which amounted to USD 85 million (non-cash) and the Euroset impairment of USD 110 million (non-cash). The net loss of the Wind Tre joint venture loss was mainly driven by integration costs as well as accelerated depreciation and amortization recorded in Q2 2017.

Income tax expense decreased in Q2 2017 to USD 65 million as higher taxes in Pakistan and Ukraine resulting from higher profits were more than offset by positive year on year impact from lower taxes in Russia, mainly due to the tax deductibility of fees paid in connection with the bond repurchase.

Prior to the Wind Tre joint venture closing in November 2016, WIND has been accounted for as a discontinued operation and classified as held for sale under IFRS rules since Q3 2015. As a result, the Q2 2016 results were positively affected by the elimination of depreciation and amortization charges from the results of WIND. Following the closing of the Italy JV transaction, this "discontinued operations" accounting treatment is no longer applicable.

In Q2 2017, the company recorded a loss for the period attributable to VEON shareholders of USD 278 million, mainly attributable to the USD 372 million of non-cash charges explained above.

Capex including licenses increased 84.5% to USD 644 million in Q2 2017 primarily due to the purchase of spectrum in Pakistan, following the positive outcome of the auction in May this year. Without licenses, capex increased by 17.2% year on year.

The LTM (Last Twelve Months) ratio of capex (excluding licenses) to revenue was 18.4% in Q2 2017, with the Q2 2017 stand-alone ratio at 13.7%.

FINANCIAL POSITION & CASH FLOW









USD million

2Q17

1Q17

QoQ





Total assets

21,034

20,567

2.3%





Shareholders' equity

5,355

5,720

(6.4%)





Gross debt

11,624

10,240

13.5%





Net debt

8,403

7,661

9.7%





Net debt/underlying LTM EBITDA

2.2

2.1














USD million

2Q17

2Q16

YoY


1H17

1H16

YoY

Net cash from/(used in) operating activities

578

680

(102)


1,162

442

720

from continued operations

578

428

150


1,162

67

1,095

from discontinued operations

-

252

(252)


-

375

(375)

Net cash from/(used in) investing activities

(725)

(626)

(99)


(1,314)

(1,177)

(137)

from continued operations

(725)

(405)

(320)


(1,314)

(765)

(549)

from discontinued operations

-

(221)

221


-

(412)

412

Net cash from/(used in) financing activities 

909

693

216


163

719

(556)

from continued operations

909

693

216


163

729

(566)

from discontinued operations

-

-

-


-

(10)

10

 

Assets increased compared to Q2 2017 mainly driven by the 4G/LTE spectrum investment in Pakistan of USD 295 million.

Gross debt increased 13.5% quarter on quarter mainly due to the new term-loan at HQ of USD 0.6 billion, new bonds issued by VimpelCom Holdings of USD 1.5 billion and the new Sberbank facility at HQ of USD 1.7 billion, partially offset by bond repayments of USD 1.3 billion and the repayment of Sberbank facilities in Russia of USD 1.1 billion.

Net cash from operating activities decreased year on year in Q2 2017 by USD 102 million, driven by the USD 150 million higher cash flow from continued operations being more than offset by the year on year decrease in the net cash from discontinued operations as a result of the closing of the Italy JV transaction in November 2016.

Net cash flow used in investing activities increased year on year by USD 99 million, due to the net effect of 4G/LTE spectrum investment in Pakistan, offset by the above-mentioned impact related to discontinued operations in Italy.

Net cash from financing activities increased in Q2 2017, mainly due to USD 562 million of additional net borrowings and USD 345 million of dividend payments.

COUNTRY PERFORMANCE – Q2 2017

  • Russia
  • Pakistan
  • Algeria
  • Bangladesh
  • Ukraine
  • Uzbekistan
  • Italy

RUSSIA









RUB million

2Q17

2Q16

YoY


1H17

1H16

YoY

Total revenue

68,407

66,423

3.0%


132,913

132,344

0.4%

Mobile service revenue

55,674

53,730

3.6%


108,022

105,564

2.3%

Fixed-line service revenue

9,889

10,848

(8.8%)


19,549

22,119

(11.6%)

EBITDA

26,925

27,269

(1.3%)


50,995

51,679

(1.3%)

EBITDA underlying

26,975

27,446

(1.7%)


51,199

51,909

(1.4%)

EBITDA margin

39.4%

41.1%

(1.7p.p.)


38.4%

39.0%

(0.6p.p.)

EBITDA underlying margin

39.4%

41.3%

(1.9p.p.)


38.5%

39.2%

(0.7p.p.)

Capex excl. licenses

7,882

7,191

9.6%


14,577

10,372

40.5%

LTM Capex excl. licenses /revenue

16.7%

16.7%

(0.0p.p.)


-

-










Mobile








Total revenue

58,491

55,537

5.3%


113,313

110,123

2.9%

- of which mobile data

14,510

12,316

17.8%


28,413

24,259

17.1%

Customers (mln)

58.3

57.5

1.4%


-

-

-

- of which data users (mln)

38.1

33.7

12.9%


-

-

-

ARPU (RUB)

320

309

3.6%


-

-

-

MOU (min)

338

337

0.3%


-

-

-

Data usage (MB/user)

2,716

1,906

42.5%


-

-

-

Fixed-line1








Total revenue

9,916

10,886

(8.9%)


19,600

22,221

(11.8%)

Broadband revenue

2,579

2,941

(12.3%)


5,229

6,002

(12.9%)

Broadband customers (mln)

2.2

2.2

2.0%


-

-

-

Broadband ARPU (RUB)

391

452

(13.5%)


-

-

-


Note: Fixed-line revenue and it's component have been restated to align it with Group accounting policies

 

Performance in Russia improved during Q2 2017, but the conditions and competition in the market remain challenging.

Total revenue in Q2 2017 increased 3.0% to RUB 68.4 billion, driven by an increase in mobile service revenue. Mobile service revenue increased by 3.6% to RUB 55.7 billion, driven by growth in mobile data, value added services and mobile financial services revenue, partially offset by a decrease in voice revenue. Mobile data revenue continued its strong growth, increasing 17.8% to RUB 14.5 billion, resulting from increased penetration of integrated bundles and smartphones together with data traffic growth. Mobile ARPU grew 3.6% year on year to RUB 320, driven by the continued efforts to simplify tariff plans and successful upselling activities, while also being supported by increased penetration of bundled propositions in the customer base. Beeline's mobile customer base increased by 1.4% year on year to 58.3 million in Q2 2017, driven by both increased sales and improved annual churn and the Net Promoter Score position remains at par with Beeline's main competitors. Take up for the fixed mobile convergence ("FMC") offer continues to be strong with more than 730,000 customers. Fixed-line service revenue decreased by 8.8% to RUB 9.9 billion mainly driven by the effect of the strengthening ruble on foreign currency contracts and growing penetration of FMC in the customer base.

Reported EBITDA decreased by 1.3% to RUB 26.9 billion while underlying EBITDA decreased by 1.7%, adjusted for exceptional costs related to the performance transformation program of RUB 49 million in Q2 2017 and RUB 177 million in Q2 2016. The underlying EBITDA margin was 39.4%, representing a sequential quarter on quarter improvement of 1.8 percentage points.

Capex excluding licenses increased 9.6% year on year during the quarter as a result of the accelerated roll-out of the high-speed data network, which led to 60% 4G/LTE population coverage. The LTM capex to revenue ratio for Q2 2017 was 16.7%.

PAKISTAN
Q2 2016 pro-forma results assume that the results of Warid have been consolidated (including intercompany eliminations) with effect from 1 January 2016









PKR billion

2Q17

2Q16
pro-forma
Warid

YoY


1H17

1H16
pro-forma
Warid

YoY

Total revenue

40.4

37.8

6.9%


79.2

74.6

6.1%

Mobile service revenue

37.7

35.7

5.4%


73.9

70.5

4.8%

of which mobile data

5.8

3.9

46.2%


11.0

8.0

37.4%

EBITDA

17.5

13.6

28.3%


33.7

27.9

20.8%

EBITDA underlying

18.1

15.2

19.1%


34.9

29.7

17.2%

EBITDA margin

43.3%

36.0%

7.2p.p.


42.5%

37.4%

5.2p.p.

EBITDA underlying margin

44.7%

40.1%

4.6p.p.


44.0%

39.9%

4.2p.p.

Capex excl. licenses

6.8

5.9

14.0%


10.4

8.0

29.5%

LTM capex excl. licenses/revenue

18.0%

17.7%

0.3p.p.


-

-

-









Mobile








Customers (mln)

52.5

49.3

6.4%


-

-

-

- of which data users (mln)

26.7

22.7

17.4%


-

-

-

ARPU (PKR)

238

245

(2.7%)


-

-

-

MOU (min)1

520

566

(8.0%)


-

-

-

Data usage (MB/user)

509

292

74.3%


-

-

-

1 MoU has been adjusted in 2016 and revised for 2015 due to a change of components in the definition of traffic

  

In July 2016, VEON acquired Warid, strengthening its leading position in Pakistan, and as a result, Warid's financial results have been consolidated into VEON´s financial statements with effect from 1 July 2016. The companies received merger approval on 15 December 2016, with retrospective effect from 1 July 2016. The company started re-branding to the "Jazz" brand in January 2017, unifying distribution channels and processes, with the aim of simplifying the customer experience.

Despite the continuing aggressive price competition in the market, Jazz continued to show mid-to-high single-digit growth of both revenue and customer base. Revenue growth of 6.9% year on year was supported by growth in data and financial services revenues; in particular, data revenue accelerated to a 46.2% year on year growth, driven by an increase in data customers through higher bundle engagement and the continued 3G network expansion. The customer base increased by 6.4% year on year, driven by continued customer satisfaction through focus on price simplicity and efficient distribution channel management. Jazz sees data and voice monetization among its key priorities, underpinned by the ambition to offer the best network in terms of both quality of service and coverage.

Underlying EBITDA margin, excluding PKR 0.6 billion in performance transformation costs (including the Warid integration costs), was 44.7% in Q2 2017, improving by over 4.6 percentage points year on year.

Capex increased to PKR 6.8 billion in Q2 2017 while the LTM capex to revenue ratio was 18.0% in Q2 2017 (13.1% excluding integration capex). At the end of the Q2 2017, 3G was offered in 358 cities while 4G/LTE was offered in over 60 cities.

The Warid integration is ahead of schedule and the merged entity has been providing unified on-net offers to its customers since October 2016. In November 2015, with the announcement of the transaction to merge Mobilink with Warid, the Company provided target run-rate net cost synergies in the region of USD 115 million, 90% of which was expected by third year post-closing. This synergy target has already been fully achieved by the end of Q2 2017 although Jazz remains fully focused on network integration activities.

During Q2 2017, Jazz won the auction for 4G/LTE spectrum and was awarded 10 MHz of paired spectrum in the 1800 MHz band for a total consideration of USD 295 million (PKR 31 billion) and withholding tax of 10%, all of which was paid in Q2 2017. This additional spectrum will allow Jazz's customers to experience higher data speeds, with better quality and coverage, making VEON the ideal platform to fulfil Pakistan's digital ambitions.

VEON is in advanced discussions for the sale of its indirect subsidiary, Deodar Limited ("Deodar"), which  holds a portfolio of approximately 13,000 towers and provides network tower services in Pakistan. As a result, on June 30, 2017, VEON classified Deodar as a disposal group held for sale and there can be no assurance that a definitive agreement for the sale of Deodar will be reached. Following the classification as a disposal group held-for sale, VEON will no longer account for depreciation and amortization charges of Deodar's assets.

ALGERIA









DZD billion

 2Q17 

 2Q16 

YoY


 1H17 

 1H16 

YoY

Total revenue

25.3

27.4

(8.0%)


50.7

57.5

(11.7%)

Mobile service revenue

24.9

27.2

(8.3%)


49.9

56.9

(12.2%)

of which mobile data

3.2

1.7

88.9%


6.0

3.5

73.3%

EBITDA

11.4

14.0

(18.7%)


23.9

31.1

(23.0%)

EBITDA underlying

11.4

14.0

(18.8%)


24.0

31.1

(22.9%)

EBITDA margin

45.1%

51.1%

(6.0p.p.)


47.2%

54.1%

(6.9p.p.)

EBITDA underlying margin

45.1%

51.2%

 6.0p.p.


47.2%

54.1%

(6.9p.p.)

Capex excl. licenses

3.1

4.7

(33.7%)


6.0

7.6

(20.8%)

LTM capex excl. licenses/revenue

15.5%

14.9%

 0.6p.p.


-

-

-









Mobile








Customers (mln)

15.5

16.3

(4.9%)


-

-

-

- of which mobile data customers (mln)

7.0

5.4

29.9%


-

-

-

ARPU (DZD)

522

546

(4.4%)


-

-

-

MOU (min)1

379

339

11.8%


-

-

-

Data usage (MB/user)

478

304

57.5%


-

-

-

1 MoU has been adjusted in 2016 and revised for 2015 due to a change of components in the definition of traffic 

 

Djezzy's turnaround continued in Q2 2017, despite a challenging regulatory and macro-economic environment which remains characterized by strong competitive and inflationary pressures. As disclosed in Q4 2016, the regulatory environment has recently improved in Algeria, although the mobile termination rate ("MTR") asymmetry for Djezzy is a topic still under discussion with the regulator. From a taxation perspective, with effect from January 2017, the new Finance law increased VAT from 7% to 19% on data services and from 17% to 19% on voice services and also increased taxes on recharges from 5% to 7%. These higher indirect taxes influenced Djezzy's performance in relation to both revenue and EBITDA as these taxes could not be passed on to customers.

Revenue decreased by 8.0% year on year, a slightly improved year on year trend compared to Q1 2017. Price competition, on both voice and data, caused a reduction of ARPU and a year on year increase in churn. Djezzy's Q2 2017 service revenue was DZD 24.9 billion, an 8.3% reduction, while data revenue growth accelerating to 88.9%, due to higher usage and a substantial increase in data customers as a result of the 3G and 4G/LTE network roll-out. Djezzy's path to transform into a digital leader is being executed, as the company leads on 4G/LTE population coverage.

The customer base in Algeria decreased 4.9% to 15.5 million as a result of competitive pressure in the market and ARPU declined by 4.4%, a relative improvement compared to the year on year erosion experienced in Q1 2017, and this ARPU pressure was primarily caused by sub-optimal changes in billing and commission structures for indirect distribution that were introduced in early 2016.

Structural measures, taken by the new management team to improve performance and stabilize the customer base, including distribution transformation and monobrand roll-out, acceleration of 4G/LTE network deployment, promotion of micro campaigns with tailored services to increase satisfaction, data monetization activities and smartphone promotions coupled with bundle offers, are showing the first positive signs. The simplified data centric pricing architecture, in place since Q3 2016, is also contributing to the positive data revenue trend.

In Q2 2017, EBITDA decreased by 18.7% year on year. Underlying EBITDA (which in Q2 2016 was adjusted for exceptional costs of DZD 21 million related to the performance transformation program) decreased 18.8% to DZD 11.4 billion primarily due to revenue decline, with an underlying EBITDA margin of 45.1% and excluding the impact of the changes to indirect taxes with effect from 1 January 2017 underlying EBITDA margin would have been 48%.

At the end of Q2 2017, the company's 4G/LTE services covered 20 wilayas and more than 20.5% of the country's population, while the 3G network covers all 48 willayas  Q2 2017 capex was DZD 3.1 billion, a 33.7% year on year reduction, with LTM capex to revenue at 15.5%.

Finally, in June Djezzy's Board approved the distribution of DZD 16.4 billion (approximately USD 150 million) of gross dividends representing approximately 60% of 2016's net income.

BANGLADESH









BDT billion

 2Q17 

 2Q16 

YoY


 1H17 

 1H16 

YoY

Total revenue

12.0

12.3

(3.0%)


24.0

24.5

(2.1%)

Mobile service revenue

11.6

11.9

(2.6%)


23.3

23.9

(2.5%)

of which mobile data

1.5

1.2

32.2%


3.1

2.2

37.4%

EBITDA

4.9

5.4

(8.9%)


10.4

10.9

(4.2%)

EBITDA underlying

4.9

5.8

(16.1%)


10.4

11.7

(10.9%)

EBITDA margin

41.1%

43.7%

(2.7p.p.)


43.5%

44.5%

 (1.0p.p.)

EBITDA underlying margin

41.1%

47.5%

(6.4p.p.)


43.5%

47.8%

(4.3p.p.)

Capex excl. licenses

1.4

2.6

(44.6%)


2.2

3.9

(44.1%)

LTM capex excl. licenses/revenue

18.7%

22.6%

 (3.9p.p.)













Mobile








Customers (mln)

30.7

31.1

(1.5%)





- of which mobile data customers (mln)

15.9

14.5

9.3%





ARPU (BDT)

127

126

0.1%





MOU (min)

285

316

(9.6%)





Data usage (MB/user)

364

167

117.2%





 

In Bangladesh, the operational focus during Q2 2017 continued to be on increasing network coverage in order to address the 3G coverage gap vis-à-vis the competition and on customer acquisition following the completion of the Government-mandated SIM re-verification program.

The year on year decline of the customer base slightly softened in Q2 2017 compared to Q1.
Excluding the results of the re-verification process, which resulted in 3.8 million SIM cards being blocked by Banglalink, the customer base increased year on year and the customer base grew on a quarter on quarter basis.

Total revenue in Q2 2017 decreased by 3.0% year on year while Banglalink's service revenue decreased year on year 2.6% to BDT 11.6 billion and was stable quarter on quarter. The low single-digit decline in service revenue is mostly attributable to the gap in 3G network coverage versus the market leader. In addition, the market is still characterized by intense price competition, which accelerated following the SIM re-verification process and which more than offset the continued increase in data revenue of 32.2%, which was driven by increased smart-phone penetration. Data revenue growth was driven by data usage growth of 117.2% along with 9.3% growth in active data users and ARPU was broadly flat year on year.

Banglalink's underlying EBITDA in Q2 2017 decreased by 16.1% to BDT 4.9 billion, as a result of the revenue trend and higher customer acquisition activity, more than offsetting savings from the performance transformation program. As a result, in Q2 2017, the underlying EBITDA margin was 41.1%, which represents a year on year reduction of 6.4 percentage points.

In Q2 2017, capex excluding licenses decreased 44.6% year on year to BDT 1.4 billion, with a LTM capex to revenue ratio of 18.7%. Banglalink continues to invest in efficient, high-speed data networks aiming to substantially improve its 3G network coverage, which covered 68% of the population at the end of Q2 2017.

The Government has published draft guidelines with regards to a spectrum auction and 4G/LTE service licenses for public consultation.

UKRAINE

















UAH million

 2Q17 

 2Q16 

YoY


 1H17 

 1H16 

YoY

Total revenue

4,058

3,689

10.0%


7,929

7,157

10.8%

Mobile service revenue

3,768

3,399

10.9%


7,328

6,598

11.1%

Fixed-line service revenue

277

262

5.9%


572

520

9.9%

EBITDA

2,305

2,027

13.7%


4,378

3,848

13.8%

EBITDA underlying

2,333

2,027

15.1%


4,407

3,828

15.1%

EBITDA margin

56.8%

54.9%

 1.9p.p.


55.2%

53.8%

1.4p.p.

EBITDA underlying margin

57.5%

55.0%

2.5p.p.


55.6%

53.5%

2.1p.p.

Capex excl. licenses

705

727

(3.0%)


1,442

975

47.8%

LTM capex excl. licenses/revenue

19.9%

18.4%

1.5p.p.


-

-

-









Mobile








Total operating revenue

3,781

3,427

10.3%


7,357

6,636

10.9%

- of which mobile data

933

544

71.6%


1,778

1,040

71.0%

Customers (mln)

26.1

25.4

2.8%


-

-

-

- of which data customers (mln)

11.2

10.3

8.7%




-

ARPU (UAH)

48

44

8.5%


-

-

-

MOU (min)

573

559

2.5%


-

-

-

Data usage (MB/user)

758

283

167.8%


-

-

-

Fixed-line








Total operating revenue

277

262

5.9%


572

520

9.9%

Broadband revenue

169

151

12.5%


340

298

14.1%

Broadband customers (mln)

0.8

0.8

0.0%





Broadband ARPU (UAH)

69

62

11.5%





 

Kyivstar continued to deliver strong results in Q2 2017, as the company remains the clear leader in both customer market share and NPS.

Total revenue increased 10.0% year on year to UAH 4.1 billion in Q2 2017 while mobile service revenue grew 10.9% to UAH 3.8 billion. This was driven by continued strong growth of mobile data revenue, which grew 71.6% as a result of growing data customers, successful marketing activities stimulated by the continued 3G network roll-out and data-centric tariffs. As a result, data consumption per user more than doubled in Q2 2017 compared with the same quarter in the previous year.

Kyivstar´s mobile customer base increased 2.8% to 26.1 million in Q2 2017, due to higher gross adds and improved churn and ARPU increased by 8.5% to UAH 48.

Fixed-line service revenue increased 5.9% to UAH 277 million, supported by fixed residential broadband (''FTTB'') revenue, which continued to outgrow the market, increasing 13.1%, driven primarily by FTTB re-pricing and the improved quality of the customer base. The fixed broadband customer base is stable year on year at 0.8 million and fixed broadband ARPU increased 11.5% year on year to UAH 69.

EBITDA increased 13.7% to UAH 2.3 billion in Q2 2017 with an EBITDA margin of 56.8% while underlying EBITDA, adjusted for performance transformation and other costs totalling UAH 28 million in Q2 2017, grew 15.1% year on year, driven by higher revenue and lower interconnect costs, partially offset by the increase in commercial costs and structural opex, such as license and frequency fees. Underlying EBITDA margin increased 2.5 percentage points to 57.5%.

Q2 2017 capex was UAH 705 million with an LTM capex to revenue ratio of 19.9%. Kyivstar continued to roll out its 3G network in Q2 2017 reaching a population coverage of 69% from 48% in the same quarter last year.

UZBEKISTAN

















UZS bln

 2Q17 

 2Q16 

YoY


 1H17 

 1H16 

YoY

Total revenue

576

479

20.3%


1,089

947

15.0%

Mobile service revenue

572

475

20.4%


1,082

940

15.1%

- of which mobile data

139

109

28.2%


274

212

29.0%

Fixed-line service revenue

4

3

13.3%


7

7

4.9%

EBITDA

313

273

14.4%


577

558

3.4%

EBITDA underlying

313

273

14.4%


577

549

5.1%

EBITDA margin

54.3%

57.1%

(2.8p.p.)


53.0%

58.9%

(5.9p.p.)

EBITDA underlying margin 

54.3%

57.1%

(2.8p.p.)


53.0%

58.0%

(5.0p.p.)

Capex excl. licenses

60

47

26.0%


135

132

2.0%

Capex excl. licenses LTM/revenue

25.4%

14.2%

11.3p.p.













Mobile








Customers (mln)

9.6

9.3

2.9%





- of which mobile data customers (mln)

4.5

4.3

5.5%





ARPU (UZS)

19,847

16,720

18.7%





MOU (min)

578

535

8.1%





Data usage (MB/user)

392

226

73.4%





Note: Mobile data revenue have been restated for the prior periods to align it with Group accounting policies

 

Beeline reported strong results and continues to hold the leading position in both revenue market share and NPS in a highly competitive market.

Total revenue increased 20.3% as mobile service revenue increased 20.4% to UZS 572 billion, primarily as a result of the impact of Beeline´s price plans being pegged to U.S. dollars and successful marketing activities, together with increased revenues from interconnect services, value added services and mobile data. Mobile data revenue increased 28.2%, driven by the continued high-speed data network roll-out, increased smartphone penetration and the launch of new bundled offerings. The overall customer base increased 2.9% to 9.6 million, the second consecutive quarter of year on year growth, driven by strong gross additions.

Underlying EBITDA increased 14.4% compared to the prior year driven by increased revenue, partly offset by higher interconnect costs as a result of both higher off-net usage and a negative currency effect together with increases in content costs, customer costs and structural opex. As a result, the underlying EBITDA margin was a robust 54.3% in Q2 2017.

Capex was UZS 59.8 billion and the LTM capex to revenue ratio was 25.4%, mainly due to prepayments of equipment in Q4 2016 for deployment in 2017. The company continued to invest in its high-speed data networks as it improved the 4G/LTE coverage in Tashkent and increased the number of 3G sites by 41% and further improvements to the high-speed data networks will continue to be a priority for Beeline in 2017.

The cash and deposits balances of USD 696 million in Uzbek som are considered to be largely restricted from repatriation due to local government and central bank regulations.

The Republican Radiofrequencies Council in Uzbekistan published a Decision on ordering the redistribution of radio frequencies in Uzbekistan which, if it comes into force as planned in September 2017, could result in a reallocation of the Company's subsidiary Unitel LLC's radio frequencies to other cellular communications providers in the market.

ITALY JOINT VENTURE1

















EUR million

 2Q17 

 2Q16 

YoY


1H17

1H16

YoY

Total revenue

1,535

1,563

(1.7%)


3,083

3,078

0.2%

Mobile service revenue

1,042

1,065

(2.2%)


2,085

2,114

(1.4%)

Fixed-line service revenue

268

267

0.5%


539

533

1.1%

EBITDA

442

493

(10.3%)


900

964

(6.6%)

EBITDA underlying2

523

493

6.1%


1,040

964

7.9%

EBITDA margin

28.8%

31.5%

(2.7p.p.)


29.2%

31.3%

(213.4%)

EBITDA underlying2margin

34.0%

31.5%

2.5p.p.


33.7%

31%

240.3%

Capex excl. licenses

266

264

0.9%


506

540

(6.2%)

LTM capex excl. licenses/revenue

17.6%

17.7%

(0.6p.p.)


17.6%

17.7%

(60.0%)

Mobile








Total revenue

1,239

1,292

(4.1%)


2,492

2,535

(1.7%)

- of which mobile data

367

319

15.0%


719

633

13.5%

Customers (mln)

30.3

31.3

(3.4%)


30.3

31.3

(3.4%)

- of which data customers (mln)

19.3

18.9

1.9%


19.3

18.9

1.9%

ARPU (EUR)

11.2

11.2

(0.2%)


11.1

11.1

(0.2%)

MOU (min)

274

286

(4.3%)


269

281

(4.2%)

Fixed-line








Total revenue

296

271

9.6%


591.1

542.2

9.0%

Total voice customers (mln)

2.73

2.78

(1.8%)


2.73

2.78

(1.8%)

ARPU (EUR)

27.6

26.9

2.7%


28

27

2.8%

Broadband customers (mln)

2.4

2.3

2.4%


2.4

2.3

2.4%

Broadband ARPU (EUR)

21.8

20.9

4.2%


21.8

20.7

5.1%


1 The ''combined data'' for Q2 2016 consists of the sum of the WIND Telecomunicazioni s.p.a. and H3G s.p.a. businesses results, respectively, for the three months ended 30 June 2016, prior to the merger of the two businesses. The Q2 2016 data related to H3G s.p.a. was obtained through due diligence performed as part of the merger process. The Company has included this "combined data" because it believes that financial information on the Wind Tre joint venture is relevant to its business and results for the financial quarter. Going forward, the Company expects to include financial information related to the Wind Tre joint venture in the publication of its financial results. It should be noted that the Company owns 50% of the Wind Tre joint venture, while the results above reflect the entire business

2 Q2 2017 underlying EBITDA before integration costs of ~EUR 81 million

3 Q2 2017 LTM EBITDA before approx. EUR 200 million of integration costs

Note: starting from Q2 2017 results, minor changes in accounting policies were adopted and for a proper comparison previous period results were adjusted accordingly

 

Wind Tre's total revenue in Q2 2017 decreased 1.7% to EUR 1.5 billion, driven by a 2.2% decline in mobile service revenue and lower sales of mobile handsets. The revenue decline was partially offset by growth of 0.5% in fixed-line service revenue.

The mobile service revenue decline was primarily due to increased competition in the market impacting the customer base, a more difficult comparison with Q2 of 2016 when certain re-pricing activities were implemented and by new EU roaming regulations.

Mobile data revenue continued to show strong growth with a 15.0% year on year increase to EUR 367 million, driven by an increase in both data customers, which grew by 1.9% to 19.3 million, and in data ARPU, which grew by 8.3%. At the end of Q2 2017, Wind Tre's mobile customer base was 30.3 million subscribers, declining compared to the previous year due to increased competition ahead of the Iliad launch. In Q2 2017, mobile ARPU remained stable at EUR 11.2 with the increase in data ARPU fully offsetting the decline in voice ARPU.

Fixed-line service revenue performance was driven by a 7.0% growth in broadband revenue to EUR 155 million, with direct and broadband customers growing 1.8% and 2.4% respectively. In Q2 2017, the fixed-line direct customer base reached 2.5 million and the broadband customer base reached 2.4 million as a result of increased demand for ultra-broadband connections. Fixed and broadband ARPU grew by 2.7% and 4.2% respectively.

In Q2 2017, underlying EBITDA2 grew by 6.1% to EUR 523 million, driven by increased other revenues coupled with the benefits of post-merger synergies. As a result, the underlying EBITDA margin for Q2 2017 increased by 2.5 percentage points to 34.0%.

Capex in the quarter totaled EUR 266 million and was primarily focused on expanding capacity and coverage of the 4G/LTE network, as well as modernizing and merging the former Wind and Tre networks. The net leverage ratio (net debt/LTM underlying3 EBITDA) was at 4.1x at the end Q2 2017.

In June 2017, Jeffrey Hedberg was appointed as new CEO of Wind Tre.

CONFERENCE CALL INFORMATION

On 3 August 2017, VEON will also host a conference call at 14:00 CEST (13:00 BST) through video webcast on its website and through following dial-in numbers. The call and slide presentation may be accessed at http://www.veon.com

14:00 CEST investor and analyst conference call
US call-in number: +1 (646) 254 3366
Confirmation Code: 4916180

International call-in number: +44 (0) 20 3427 1913
Confirmation Code: 4916180

The conference call replay and the slide presentation webcast will be available until 16 August 2017.
The slide presentation will also be available for download on VEON's website.

Investor and analyst call replay
US Replay Number: +1 866 932 5017
Confirmation Code: 4916180

UK Replay Number: 0800 358 7735
Confirmation Code: 4916180

DISCLAIMER

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 with respect to its performance transformation, among others; anticipated performance and guidance for 2017, including VEON's ability to generate sufficient cash flow; future market developments and trends; expected synergies of the Italy Joint Venture, including expectations regarding capex and opex benefits; realization of the synergies of the Warid transaction; operational and network development and network investment, including expectations regarding the roll out and benefits of 3G/4G/LTE networks, as applicable, the effect of the acquisition of additional spectrum on customer experience and the Company's ability to realize its targets and strategic initiatives in its various countries of operation. The forward-looking statements included in this release are based on management's best assessment of the Company'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 demand for and market acceptance of VEON's products and services; continued volatility in the economies in VEON's markets; unforeseen developments from competition; governmental regulation of the telecommunications industries; general political uncertainties in VEON's markets; government investigations or other regulatory actions and/or litigation with third parties; failure to realize the expected benefits of the Italy Joint Venture or the Warid transaction as expected or at all due to, among other things, the parties' inability to successfully implement integration strategies or otherwise realize the anticipated synergies; risks associated with data protection or cyber security, other risks beyond the parties' control or a failure to meet expectations regarding various strategic initiatives, including, but not limited to, the performance transformation program, 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 the Company's Annual Report on Form 20-F for the year ended December 31, 2016 filed with the U.S. Securities and Exchange Commission (the "SEC") and other public filings made 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.

All non-IFRS measures disclosed in the document, i.e. EBITDA, EBITDA margin, underlying EBITDA, underlying EBITDA margin, EBIT, net debt, equity free cash flow, organic growth, capital expenditures excluding licenses, last twelve months (LTM) Capex excluding licenses/Revenue, are reconciled to comparable IFRS measures in Attachment C.

ABOUT VEON

VEON is a NASDAQ and Euronext Amsterdam-listed global provider of connectivity and internet services, with the ambition to lead the personal internet revolution for the 235 million+ customers it currently serves, and many others in the years to come.

Follow us:

on Twitter @veondigital

visit our blog @ blog.veon.com

go to our website @ http:// www.veon.com

For more information on interim financial schedules please refer to the MD&A section and financial statements section.

For more information on financial and operating data for specific countries, please refer to the supplementary file Factbook2Q2017.xls on VEON's website at http://veon.com/Investor-relations/Reports--results/Results/.

ATTACHMENT A: CUSTOMERS



Mobile


Fixed-line broadband

million


2Q17

2Q16

YoY


2Q17

2Q16

YoY

Russia


58.3

57.5

1.4%


2.2

2.2

2.0%

Pakistan


52.5

49.3

6.4%





Algeria


15.5

16.3

(4.9%)





Bangladesh


30.7

31.1

(1.5%)





Ukraine


26.1

25.4

2.8%


0.8

0.8

1.7%

Uzbekistan


9.6

9.3

2.9%





Other


15.4

15.1

1.7%


0.5

0.4

23.5%

Total consolidated


208.1

204.2

1.9%


3.5

3.4

4.6%

Italy


30.3

31.1

(3.4%)


2.4

2.3

4.3%

Total 


238.4

235.3

1.3%


5.9

5.7

3.6%

 

ATTACHMENT B: DEFINITIONS

ARPU (Average Revenue per User) measures the monthly average revenue per mobile user. We generally calculate mobile ARPU by dividing our mobile serfvice revenue during the relevant period, including data revenue, roaming revenue and interconnect revenue, but excluding revenue from connection fees, sales of handsets and accessories and other non-service revenue, by the average number of our mobile customers during the period and dividing by the number of months in that period. Wind Tre defines mobile ARPU as the measure of the sum of the mobile revenue in the period divided by the average number of mobile customers in the period (the average of each month's average number of mobile customers (calculated as the average of the total number of mobile customers at the beginning of the month and the total number of mobile customers at the end of the month) divided by the number of months in that period.

Data customers are mobile customers who have engaged in revenue generating activity during the three months prior to the measurement date as a result of activities including USB modem Internet access using 2.5G/3G/4G/HSPA+ technologies. Wind Tre measures mobile data customers based on the number of active contracts signed and includes customers who have performed at least one mobile Internet event during the previous month. For Algeria, mobile data customers are 3G customers who have performed at least one mobile data event on the 3G network during the previous four months.

Capital expenditures (capex) are purchases of new equipment, new construction, upgrades, software, other long lived assets and related reasonable costs incurred prior to intended use of the non-current asset, accounted at the earliest event of advance payment or delivery. Long-lived assets acquired in business combinations are not included in capital expenditures.

EBIT is a non-IFRS measure and is calculated as EBITDA plus depreciation, amortization and impairment loss. Our management uses EBIT as a supplemental performance measure and believes that it provides useful information of earnings of the Company before making accruals for financial income and expenses and net foreign exchange (loss)/gain and others. Reconciliation of EBIT to net income attributable to VEON Ltd., the most directly comparable IFRS financial measure, is presented in the reconciliation tables section in Attachment C below.

Adjusted EBITDA (called "EBITDA" in this document) is a non-IFRS financial measure. EBITDA is defined as earnings before interest, tax, depreciation and amortization. VEON calculates EBITDA as operating income before depreciation, amortization, loss from disposal of non-current assets and impairment loss and includes certain non-operating losses and gains mainly represented by litigation provisions for all of its Business Units except for its Russia Business Unit. For 2016 Russia Business Unit's EBITDA is calculated as operating income before depreciation, amortization, loss from disposal of non-current assets and impairment loss.

In addition, the components of EBITDA include the key revenue and expense items for which the Company's operating managers are responsible and upon which their performance is evaluated. EBITDA also assists management and investors by increasing the comparability of the Company's performance against the performance of other telecommunications companies that provide EBITDA information. This increased comparability is achieved by excluding the potentially inconsistent effects between periods or companies of depreciation, amortization and impairment losses, which items may significantly affect operating income between periods. However, our EBITDA results may not be directly comparable to other companies' reported EBITDA results due to variances and adjustments in the components of EBITDA (including our calculation of EBITDA) or calculation measures.

Additionally, a limitation of EBITDA's use as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue or the need to replace capital equipment over time. Reconciliation of EBITDA to net income attributable to VEON Ltd., the most directly comparable IFRS financial measure, is presented in the reconciliation tables section in Attachment C below.

EBITDA margin is calculated as EBITDA divided by total revenue, expressed as a percentage.

Gross Debt is calculated as the sum of long term debt and short term debt.

Equity Free Cash Flow is derived from consolidated statements of cash flows and is cash flow before financing activities; net cash from operating activities less net cash used in investing activities. Reconciliation to the most directly comparable IFRS financial measure, is presented in the reconciliation tables section in Attachment C below.

Households passed are households located within buildings, in which indoor installation of all the FTTB equipment necessary to install terminal residential equipment has been completed.

MBOU (Megabyte of use) is calculated by dividing the total data traffic by the average mobile data customers during the period.

MFS (Mobile financial services) is a variety of innovative services, such as mobile commerce or m-commerce, that use a mobile phone as the primary payment user interface and allow mobile customers to conduct money transfers to pay for items such as goods at an online store, utility payments, fines and state fees, loan repayments, domestic and international remittances, mobile insurance and tickets for air and rail travel, all via their mobile phone.

MNP (Mobile number portability) is a facility provided by telecommunications operators, which enables customers to keep their telephone numbers when they change operators.

Mobile customers are generally customers in the registered customer base as of a given measurement date who engaged in a revenue generating activity at any time during the three months prior to such measurement date. Such activity includes any outgoing calls, customer fee accruals, debits related to service, outgoing SMS and MMS, data transmission and receipt sessions, but does not include incoming calls, SMS and MMS or abandoned calls. Our total number of mobile customers also includes customers using mobile internet service via USB modems. For our business in Italy, prepaid mobile customers are counted in our customer base if they have activated our SIM card in the last 13 months (with respect to new customers) or if they have recharged their mobile telephone credit in the last 13 months and have not requested that their SIM card be deactivated and have not switched to another telecommunications operator via mobile number portability during this period (with respect to our existing customers), unless a fraud event has occurred. Postpaid customers in Italy are counted in our customer base if they have an active contract unless a fraud event has occurred or the subscription is deactivated due to payment default or because they have requested and obtained through mobile number portability a switch to another telecommunications operator.

MOU (Monthly Average Minutes of Use per User) measures the monthly average minutes of voice service use per mobile customer. We generally calculate mobile MOU by dividing the total number of minutes of usage for incoming and outgoing calls during the relevant period (excluding guest roamers) by the average number of mobile customers during the period and dividing by the number of months in that period. For our business in Italy, we calculate mobile MOU as the sum of the total traffic (in minutes) in a certain period divided by the average number of customers for the period (the average of each month's average number of customers (calculated as the average of the total number of customers at the beginning of the month and the total number of customers at the end of the month)) divided by the number of months in that period.

Net debt is a non-IFRS financial measure and is calculated as the sum of interest bearing long-term debt and short-term debt minus cash and cash equivalents, long-term and short-term deposits and fair value hedges. The Company believes that net debt provides useful information to investors because it shows the amount of debt outstanding to be paid after using available cash and cash equivalents and long-term and short-term deposits. Net debt should not be considered in isolation as an alternative to long-term debt and short-term debt, or any other measure of the Company financial position.

Net foreign exchange (loss)/gain and others represents the sum of Net foreign exchange (loss)/gain, Equity in net (loss)/gain of associates and Other (expense)/income (primarily (losses)/gains from derivative instruments), and is adjusted for certain non-operating losses and gains mainly represented by litigation provisions. Our management uses Net foreign exchange (loss)/gain and others as a supplemental performance measure and believes that it provides useful information about the impact of our debt denominated in foreign currencies on our results of operations due to fluctuations in exchange rates, the performance of our equity investees and other losses and gains the Company needs to manage the business.

NPS (Net Promoter Score) is the methodology VEON uses to measure customer satisfaction.

Operational expenses (opex) represents service costs and selling, general and administrative expenses.

Organic growth in revenue and EBITDA are non-IFRS financial measures that reflect changes in Revenue and EBITDA, excluding foreign currency movements and other factors, such as businesses under liquidation, disposals, mergers and acquisitions.

Reportable segments: the Company identified Russia, Algeria, Pakistan, Bangladesh, Ukraine and Uzbekistan based on the business activities in different geographical areas. Intersegment revenue is eliminated in consolidation.

ATTACHMENT C: RECONCILIATION TABLES

RECONCILIATION OF CONSOLIDATED EBITDA






















USD mln


2Q17

2Q16
reported


1H17

1H16
reported

Unaudited














EBITDA


931

795


1,792

1,553








Depreciation


(386)

(391)


(776)

(723)

Amortization


(146)

(113)


(268)

(225)

Impairment loss


(8)

(4)


(5)

(12)

Loss on disposals of non-current assets


(2)

(4)


(9)

(6)








EBIT


389

283


734

587








Financial Income and Expenses


(208)

(186)


(401)

(354)

 -  including  finance income


24

19


46

31

 -  including finance costs


(232)

(205)


(447)

(385)

Net foreign exchange (loss)/gain and others


(374)

(2)


(396)

17

 -  including Other non-operating (losses)/gains


(116)

(24)


(152)

(62)

  -  including Shares of loss of associates and joint ventures
     accounted for using the equity method 


(95)

(11)


(196)

(16)

  - impairment of JV and associates 


(110)

-


(110)

-

 -  including Net foreign exchange gain


(53)

33


62

95








EBT


(193)

95


(63)

250








 Income tax expense 


(65)

(135)


(206)

(252)








Profit/ (loss) from discontinued operations


-

186


-

383








Profit/(loss) for the period


(258)

146


(269)

381








Profit/(loss) for the period attributable to non-controlling interest


20

9


14

55








Profit/(loss) for the year attributable to the owners of the parent


(278)

137


(283)

326

 

RECONCILIATION OF CONSOLIDATED REPORTED AND UNDERLYING EBITDA






















USD mln, unaudited


2Q17

2Q16


1H17

1H16




 Pro-forma Warid 



 Pro-forma Warid 

EBITDA


931

811


1,792

1,589








Performance transformation costs, of which


44

75


74

117

HQ and Other


37

56


58

89

Russia 


1

3


4

4

Emerging Markets


6

16


12

24

Other exceptionals


2

43


2

42








EBITDA underlying


977

928


1,868

1,747

Note: Q2 2016 one-offs have changed to USD 118 million from USD 116 million after reclassification of Opex expenses in 2016

 

RECONCILIATION OF CAPEX








USD mln unaudited


2Q17

2Q16


1H17

1H16

Cash paid for purchase of property, plant and equipment and intangible assets


709

275


1,196

714

Net difference between timing of recognition and payments for purchase of property, plant and equipment and intangible assets


(65)

75


(284)

(169)

Capital expenditures 


644

350


912

545

Less capital expenditures in licenses


(312)

(66)


(317)

(108)

Capital expenditures excl. licenses


332

284


595

437

 

RECONCILIATION OF ORGANIC AND REPORTED GROWTH RATES



2Q17 vs 2Q16



Total Revenue


EBITDA



Organic

Forex & other

Reported


Organic

Forex & other

Reported

Russia 


3.0%

15.7%

18.7%


(1.3%)

15.0%

13.8%

Pakistan


6.9%

28.5%

35.4%


28.3%

17.3%

45.6%

Algeria


(8.0%)

0.3%

(7.6%)


(18.7%)

0.2%

(18.4%)

Bangladesh


(3.0%)

(3.0%)

(6.0%)


(8.9%)

(2.8%)

(11.7%)

Ukraine 


10.0%

(5.0%)

5.0%


13.7%

(5.2%)

8.5%

Uzbekistan


20.3%

(27.6%)

(7.3%)


14.4%

(26.3%)

(11.9%)










Total 


3.7%

8.6%

12.3%


10.6%

6.5%

17.1%




1H17 vs 1H16



Total Revenue


EBITDA



Organic

Forex & other

Reported


Organic

Forex & other

Reported

Russia 


0.4%

20.7%

21.2%


(1.3%)

20.0%

18.7%

Pakistan


6.1%

29.3%

35.5%


20.8%

18.4%

39.3%

Algeria


(11.7%)

(0.7%)

(12.5%)


(23.0%)

(0.7%)

(24.0%)

Bangladesh


(2.1%)

(2.2%)

(4.3%)


(4.2%)

(2.1%)

(6.3%)

Ukraine 


10.8%

(5.4%)

5.4%


13.8%

(5.6%)

8.2%

Uzbekistan


15.0%

(22.2%)

(7.2%)


3.4%

(20.2%)

(16.8%)










Total 


1.5%

11.1%

12.7%


6.4%

8.9%

15.3%

 

RECONCILIATION OF VEON CONSOLIDATED NET DEBT








USD mln


30 June 2017


31 March 2017


31 December 2016

Net debt


8,403


7,661


7,162

Cash and cash equivalents


2,873


2,172


2,942

Long - term and short-term deposits


348


407


385

Gross debt


11,624


10,240


10,489

Interest accrued related to financial liabilities


146


160


173

Other unamortised adjustments to financial liabilities (fees, discounts etc.)


(36)


20


40

Derivatives not designated as hedges


309


302


319

Derivatives designated as hedges


33


53


7

Other financial liabilities


76


87


89

Total other financial liabilities


12,153


10,862


11,116

 

RECONCILIATION OF REPORTED CASH FLOW FROM CONTINUED OPERATIONS AND UNDERLYING EQUITY FREE CASH FLOW EXCLUDING LICENSES








USD million


2Q17

2Q16


1H17

1H16

Net cash from operating activities 


578

428


1,162

67

Exceptional items:


58

97


148

941

PT costs


46

74


67

119

Uzbekistan legal costs


-

-


-

795

IRAQNA provision


-

-


69

-

WHT on licence in Pakistan


30

-


30

-

Other


12

23


12

27

Underlying net cash flow from operating activities


664

525


1,341

1,006

Net cash used in investing activities


(725)

(405)


(1,314)

(765)

Adjustments:







Deposits & Financial assets


(27)

(56)


(131)

23

Purchase of license and other


(326)

(67)


(333)

(111)

Underlying net cash flow used in investing activities


(371)

(282)


(850)

(678)

Underlying Equity Free Cash Flow excluding licenses


293

243


491

328

 

RECONCILIATION OF REPORTED AND PRO-FORMA WARID INCOME STATEMENT FOR Q2 AND 1H 2016





USD million

2Q16
reported

Warid incl.
intercompany
eliminations

2Q16
pro-forma

Total revenue

2,153

75

2,228

Service revenue

2,086

72

2,158

EBITDA

795

16

811

EBITDA margin

37.0%


36.4%

Depreciation, amortization, impairments and other

(512)

(30)

(542)

EBIT

283

(14)

269

Financial income and expenses

(186)

(8)

(194)

Net foreign exchange (loss)/gain and others

9

10

19

Share of profit/(loss) of joint ventures and associates

(11)

(1)

(12)

Impairment of JV and associates

-

-

-

Profit/(loss) before tax

95

(13)

82

Income tax expense

(135)

(2)

(137)

Profit/(loss) from continued operations

(40)

(15)

(55)

Profit/(loss)  from discontinued operations

186

1

187

Profit for the period attributable to VEON shareholders

137

(15)

122









USD million

1HQ16
reported

Warid incl.
intercompany
eliminations

1H16
pro-forma

Total revenue

4,169

155

4,324

Service revenue

4,033

147

4,180

EBITDA

1,553

36

1,589

EBITDA margin

37.3%


37.0%

Depreciation, amortization, impairments and other

(966)

(57)

(1,023)

EBIT

587

(21)

566

Financial income and expenses

(355)

(15)

(370)

Net foreign exchange (loss)/gain and others

34

6

40

Share of profit/(loss) of joint ventures and associates

(16)

0

(16)

Impairment of JV and associates

-

-

-

Profit/(loss) before tax

250

(30)

220

Income tax expense

(252)

(4)

(256)

Profit/(loss) from continued operations

(2)

(34)

(36)

Profit/(loss)  from discontinued operations

383

0

383

Profit for the period attributable to VEON shareholders

326

(35)

291

 

RECONCILIATION OF ITALY JV REPORTED NET RESULT TO VEON'S SHARE OF PROFIT/(LOSS) FROM JV AND ASSOCIATES




USD mln


2Q17

Italy JV reported net result


(626)




50% of Italy JV reported net result


(313)




D&A - PPA adjustment


213




Other PPA adjustmnet


15




Total PPA adjustment


228




VEON share of profit/(loss) from JV and associates


(85)

 

RATES OF FUNCTIONAL CURRENCIES TO USD1



Average rates


Closing rates



2Q17

2Q16

YoY


2Q17

2Q16

QoQ

Russian Ruble


57.15

65.89

(13.3%)


59.09

64.26

(8.0%)

Euro


0.91

0.89

2.6%


0.88

0.90

(2.8%)

Algerian Dinar


109.04

109.54

(0.5%)


107.80

110.31

(2.3%)

Pakistan Rupee


104.81

104.67

0.1%


104.83

104.75

0.1%

Bangladeshi Taka


80.86

78.35

3.2%


80.64

78.33

3.0%

Ukrainian Hryvnia


26.46

25.26

4.8%


26.10

24.85

5.0%

Kazakh Tenge


315.01

335.58

(6.1%)


321.46

338.87

(5.1%)

Uzbekistan Som


3,778.07

2,911.0

29.8%


3,958.56

2,943.5

34.5%

Armenian Dram


483.37

479.06

0.9%


480.47

476.68

0.8%

Kyrgyz Som


68.12

68.38

(0.4%)


69.14

67.49

2.4%

Georgian Lari


2.42

2.21

9.3%


2.41

2.34

2.8%


1 Functional currency in Tajikistan is USD

 

View original content:http://www.prnewswire.com/news-releases/veon-announces-q2-2017-results-300498911.html

SOURCE VEON Ltd.


[ Back To TMCnet.com's Homepage ]






Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2017 Technology Marketing Corporation. All rights reserved | Privacy Policy