AMSTERDAM, Feb. 18, 2021 /PRNewswire/ -- VEON Ltd. (VEON)
announces results for the fourth quarter ended 31 Dec 2020:
2020 HIGHLIGHTS:
- VEON's recovery continued as growth on a local currency basis
returned in the fourth quarter, amidst unprecedented
challenges
- Group performance and cost structure were improved by
streamlining HQ, empowering local operations and enhancing
governance
- VEON executed on a record network rollout, driving growth in 4G
users of 34% YoY, (+20 million). Data revenues grew by 15.0% YoY in
local currency
- Portfolio optimization remained a focus, as shown by our exit
from Armenia. Further
opportunities to unlock value are being explored
2020 saw the global telecoms industry facing unprecedented
challenges, as we battled the COVID pandemic with the associated
lockdowns and faced a material slowdown in economies. During this
time, VEON stepped-up support to our over 200 million customers,
addressing their changing demands associated with the new
normal
- During the last year, the group concluded a major
transformation from a centralized entity to a structure with fully
empowered country operations governed by the local operating
boards. This has enabled us to further strengthen the governance
and expedite the decision-making processes across all local
business lines
- The Group delivered FY 2020 results in line with guidance, with
full-year revenue of USD 7,980
million (down 1.6% YoY in local currency) and EBITDA Adj. of
USD 3,453 million (down 2.1% YoY in
local currency). Capex intensity of 23.7% was within guidance range
and Group Net Debt/EBITDA of 2.3x (post IFRS) is in line with the
Group's medium-term target of 2.4x
- 4Q20 Group revenue returned to growth in local currency terms,
rising by 1.4% YoY. Encouragingly, almost all operations saw
improved YoY trends in the quarter compared to 3Q20, demonstrating
resilience to COVID-19 restrictions across our markets. Reported
revenue decreased by 11.3% YoY mainly due to currency
movements
- Over the course of the year we have seen a new leadership team
led by Alexander Torbakhov being established in Beeline Russia.
Supported by the newly formed local board of directors, this team
has been executing on the operational turnaround. Beeline
Russia recorded steady improvement
in local currency revenue trends throughout the second half of the
year, with an encouragingly positive YoY revenue trend in December
(+3.6%)
- The Group EBITDA for 4Q20 increased by 0.8% YoY in local
currency terms, an encouraging improvement led in particular by the
strong double-digit EBITDA growth from Ukraine and Kazakhstan. Reported Group EBITDA was down
11.6% YoY due to adverse currency movements during the period
- We successfully implemented our investment plans, with total
operational capex of USD 1,889
million, supporting the expansion of our 4G customer. The
combined 4G population coverage of our subsidiaries reached 73%
with an increase of 19 pp over the year. This strong growth in 4G
subscribers will be instrumental in driving both the continued
growth in the core business and in enabling our digital
services
- Driven by targeted network investments and other customer care
measures the Group's 4G user base increased by 20 million YoY and 5
million QoQ, bringing the total 4G user base to 80 million. The
Group recorded a QoQ increase in its total subscribers, which grew
by 1.7 million in 4Q20 to 213.5 million
- Mobile data revenues for the year were up by 15.0% YoY in local
currency, driven by the growth in 4G users with correspondingly
higher ARPUs. 4G subscriber penetration was at 38% at year-end and
enhancing this over the next few years will be a key tailwind for
the Group, driving further growth in data revenues
- VEON's digital businesses continued to expand their customer
reach. JazzCash closed the quarter with 12.2 million monthly active
users (+67% YoY), Toffee TV in Bangladesh reached 2.3 million monthly active
users from launch in November 2019
and Beeline TV had 2.7 million monthly active users (+33% YoY) in
4Q20. We believe that digital opportunities will be key enablers of
medium-term growth
- The Group's balance sheet was strengthened throughout the year,
with USD 3.8 billion in
multi-currency debt financing activities which increased the
proportion of local currency funding. The average cost of debt was
reduced by 1.5 p.p. from 7.4% to 5.9%, and the average debt
maturity was extended by 13 months from 2.4 to 3.5 years, compared
to December 2019
Our co-Chief Executive Officers commented on 2020
results
Kaan Terzioğlu:
"Customers are at the
heart of our organization as we work hard on improving their
overall experience. This starts from our network investments and
continues through the entire value chain, as we redesign our
offers, execute on customer appreciation programs, broaden our
digital portfolio and reorganize our distribution network.
Providing seamless customer experience across all dimensions
remains the priority of our operating companies. A good example is
Russia, where the new leadership
team delivered on improving network quality with record rollout,
improved the accessibility of our products, and grew our range of
digital services resulting in a steady improvement in both
subscriber and revenue trends."
Sergi Herrero:
"This
was a year in which we made further progress in building out our
digital platforms across the three verticals of fintech, adtech and
entertainment. We continue to see immense opportunity for the
digital business across our various operations and this will remain
a key driver of the long-term growth prospects for our
Group.
In Pakistan we have again
led the market, reaching record revenue in 4Q20. In Ukraine, we delivered solid results, building
on the best 4G network. In Kazakhstan, we posted 20% year-on-year growth
in revenue. While continuing to support our growth markets, we
shall dedicate new focus on cost efficiencies across the Group, as
well as further optimizing our capital structure and
streamline our portfolio."
KEY FIGURES
- 4Q20 Revenue: USD 1,998
million, -11.3% YoY on a reported basis due to currency
movements; back to growth +1.4% YoY in local currency, with solid
growth in Ukraine, Kazakhstan, Pakistan, Bangladesh revenues and improving trends in
Russia
- 4Q20 EBITDA: USD 826
million, -11.6% YoY on a reported basis due to currency
movements; back to growth +0.8% YoY in local currency as increase
in Ukraine, Kazakhstan and Bangladesh EBITDA, as well as
cost optimization at HQ,
- 4Q20 Operational Capex: USD 674
million, with full-year capex intensity of 23.7%, in line
with our investment plans
- Solid capital structure in 4Q20: leverage level at 2.0x
excluding lease liabilities, 2.3x including lease liabilities;
total cash and undrawn committed credit lines at USD 3.2 billion; average cost of debt of 5.9% and
improved average debt maturity of 3.5 years
- 4Q20 profit for the period: USD
35 million, down 27.6% YoY, mainly due to currency
movements
Note: in the above table EBITDA Adjusted for 2019 excludes
special compensation of USD 38
million and other operating income of USD 350 million (for further discussion of
adjustments made for one-off and non-recurring items, see
"Non-recurring items that affect year-on-year comparisons." on page
3)
KEY RECENT DEVELOPMENTS
- USD 1.25 billion 3.375% notes due
2027 issued under the Group's Global Medium-Term Note (MTN) program
in November 2020
- Early redemption of USD 600
million 3.95% Senior notes due June
2021 completed in December
2020
- VEON's subsidiaries in Ukraine
and Kazakhstan signed bilateral
long-term loan agreements in local currencies worth c.USD 170 million
- Leonid Boguslavsky appointed as
director of VEON's Board of Directors
- Beeline Russia completed 4G
coverage of all Moscow metro
stations with expanded 4G coverage across Moscow
- The Group will not be paying a dividend for FY 2020, in line
with guidance
- FY 2021 guidance of low to mid-single-digit revenue and EBITDA
growth, capex intensity of 22-24%
CONTENTS
KEY RECENT
DEVELOPMENTS...............................................................4
GROUP
PERFORMANCE...........................................................................5
COUNTRY
PERFORMANCES....................................................................8
CONFERENCE CALL
INFORMATION......................................................14
ATTACHMENTS.........................................................................................16
PRESENTATION OF FINANCIAL RESULTS
VEON's results presented in this earnings release are based on
IFRS unless otherwise stated and have not been audited.
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 comparisons are on a year on year (YoY) basis unless
otherwise stated.
The non-IFRS measures disclosed in the document, i.e. EBITDA,
EBITDA margin, EBITDA Adjusted and EBITDA Adjusted margin, Net
Debt, Equity Free Cash Flow (after licenses), Operational Capital
Expenditures, Capex Intensity, local currency year on year change,
ARPU are being defined in Appendix A.
The non-IFRS measures disclosed in the document, i.e. EBITDA,
EBITDA Adjusted, Net Debt, Equity Free Cash Flow (after licenses),
Operational Capital Expenditures, local currency year on year
change, are reconciled to the comparable IFRS measures in
Attachment C.
NON-RECURRING ITEMS THAT AFFECT YEAR-ON-YEAR COMPARISONS FOR
REVENUE AND EBITDA
- In 1Q19, VEON recorded a one-off vendor payment to the Company
of USD 350 million, which was
accounted for as other income and is reflected in EBITDA.
- 2Q19 revenue and EBITDA were positively impacted by
USD 38 million received in relation
to the termination of a network sharing agreement in Kazakhstan between our subsidiary KaR-Tel LLP
and Kcell Joint Stock Company ("Kcell") following Kazakhtelecom
JSC's acquisition of 75 percent of Kcell's shares. This was
accounted in revenue and is reflected in EBITDA.
- On 29 October 2020, VEON
announced the sale of CJSC "VEON Armenia", VEON's operating
subsidiary in Armenia.
Armenia results were
deconsolidated from VEON Group numbers starting from 4Q20.
Local currency year-on-year trends for 4Q20 and 2020
disclosed in this earnings release exclude the impact of foreign
currency movements (see full definition in Attachment A) and also
exclude non-recurring items listed above.
KEY RECENT DEVELOPMENTS
USD 1.25 billion 3.375% notes due
2027 issued under the Group's MTN program and early redemption of
USD 600 million 3.95% Senior Notes
due June 2021
On 25 November 2020, VEON Holdings
B.V. ("VEON Holdings", a subsidiary of VEON Ltd.), issued
USD 1.25 billion 3.375% senior
unsecured notes due 2027 under its Global Medium Term Note
Program (the "MTN Program") established in April 2020, which represents VEON Holdings' third
issuance under the MTN Program. VEON Holdings used the proceeds of
the notes to finance and/or refinance certain investments in
subsidiaries, to refinance certain outstanding indebtedness, and
for general corporate purposes.
In addition, on 17 December 2020,
VEON Holdings completed an early redemption of all of its
outstanding USD 600 million 3.95%
Senior Notes due June 2021.
VEON's subsidiaries in Ukraine
and Kazakhstan signed bilateral
long-term loan agreements in local currencies worth approximately
USD 170 million
On 24 December 2020, VEON
announced that its operating company in Ukraine, Kyivstar, had signed three bilateral
unsecured loan agreements with Raiffeisen Bank, Alfa-Bank and OTP
Bank for an aggregate amount of UAH 4.1 billion (approximately
USD 145 million). The loan agreement
with Raiffeisen has a 5-year term, and the loan agreements with
Alfa-Bank and OTP have 3-year terms, respectively. It also
announced its operating company in Kazakhstan, KaR-Tel, had signed a bilateral
unsecured loan agreement with Forte Bank for KZT 10 billion (approximately USD 25 million), which has a 3-year term.
Leonid Boguslavsky appointed as
director of the VEON Board of Directors
On 15 January 2021, VEON announced
the appointment of Leonid
Boguslavsky to the Group's Board of Directors. Mr.
Boguslavsky joins following the departure Mr. de Beer, who stepped
down in December 2020.
Beeline Russia completed
coverage of all Moscow metro
stations with 4G and expanded 4G coverage in Moscow
In December 2020, VEON announced
that Beeline Russia achieved 100% 4G coverage and enabled its
customers to access high-speed internet at all of Moscow's metro stations, as well as in most of
the adjacent tunnels. The milestone reflects Beeline's ongoing
efforts to improve the quality of 4G connectivity and offers
Beeline customers the ability to stay in touch, listen to music and
stream content in good quality whilst underground.
No final dividend declared by the VEON for FY2020
The VEON Group will not be paying a dividend for FY2020, in line
with previous guidance.
FY 2021 guidance
VEON announces FY 2021 financial guidance anticipating low to
mid-single-digit local currency YoY growth in both Group revenue
and EBITDA, Capex Intensity of 22-23% and Group leverage of around
2.4x (post-IFRS 16) for FY 2021.
GROUP PERFORMANCE
4Q20 saw the group return to growth on a local currency basis
despite the continued impact of the COVID-19 pandemic on our
operations as second infection waves affected a number of our
markets and caused lockdowns to be selectively reintroduced.
However, the adaptations we have made to our business operations,
including the greater use of digital channels to engage with our
customers, helped the Group, underscoring the resilience of our
operating companies to the restrictions that remain in place.
All of our countries are still facing travel restrictions, which
negatively impact roaming revenues and led to the loss of migrant
customers from our subscriber base during the quarter, particularly
in Russia. Demand for our data
services remained strong, enabling us to continue to grow our data
revenues at a double-digit pace.
Reported total revenue decreased by 11.3% YoY in 4Q20, mainly
due to currency headwinds. In local currency terms, total revenue
was back to growth, rising by 1.4% YoY. Almost all of VEON's
operations saw a sequential improvement in YoY trends in 4Q20,
continuing a trend seen in 3Q20 following the lifting of strict
lockdowns in all of our geographies.
Russia reported YoY revenues in
4Q20 of -2.0% versus the -6.8% reported in 3Q20. This YoY decline
in revenues was primarily a result of lower roaming revenues due to
travel restrictions, the loss of the migrant workforce, as well as
a decrease in content revenues due to a stricter content policy to
eliminate unrequested services. The key focus of the Beeline Russia
team is in stabilizing the business' operating performance and
improving the overall customer experience, including 4G and digital
services. Encouragingly, Russia
recorded a positive YoY revenue trend in December (+3.6%). We
anticipate further improvements in operational KPIs of Beeline
Russia, including network performance metrics and subscriber
trends, in the first half of 2021 with a sustained return to
positive YoY growth in total revenue for Russia during the period.
Ukraine and Kazakhstan recorded double-digit revenue YoY
local currency growth in 4Q20. Pakistan recorded good YoY growth,
strengthening its market leadership. Bangladesh showed positive YoY revenue growth
in local currency and while Algeria's revenue declined YoY due to price
competition, it continued to perform well within a contracting
market.
Group EBITDA decreased by 11.6% YoY in 4Q20 due to currency
headwinds. In local currency terms, EBITDA increased by 0.8% YoY.
Ukraine and Kazakhstan recorded double-digit EBITDA YoY in
local currency terms, while Pakistan 4Q20 EBITDA declined due to certain
one-offs recorded in 4Q20 and 4Q19, and further investments in
JazzCash. In 4Q20, Russia EBITDA was negatively affected mainly by
a decline in high-margin revenue streams (roaming and content) and
higher structural costs in relation to the increased network
investment.
Group corporate costs reduced significantly YoY by USD 64 million to USD 41
million in 4Q20 as a result of the new operating model that
has been implemented across the Group, resulting in a lean and more
streamlined HQ.
For the table with performance by country see page 9, where
"Other" includes the results of Kyrgyzstan, Georgia and Armenia (included in FY 2019
numbers and 9M 2020).
INCOME STATEMENT & CAPITAL EXPENDITURES
Note: in the above table non-recurring items include
compensation of USD 38 million and
other operating income of USD 350
million, both recorded in 2019 (for further discussion of
adjustments made for one-off and non-recurring items, see
"Non-recurring items that affect year-on-year comparisons." on page
3)
For discussion on EBITDA performance please refer to the "Group
performance" section.
Depreciation, amortization, impairments and other charges
were broadly stable YoY in 4Q20. Depreciation expenses decreased
YoY due to the devaluation of local currencies against the US
dollar, which was partially offset by a one-off net loss recorded
as a result of the sale of our Armenia operations. VEON sold its Armenia operations on 29 October 2020 to Team LLC for an amount of
USD 51 million resulting in a net
loss of USD 77 million at the Group
level, driven by the negative accumulated translation reserve in
equity that had to be recognized on the income statement upon
disposal. In 4Q20 VEON has recorded a reversal of USD 7 million on fixed assets.
Financial income and expenses decreased YoY from
negative USD 213 million in 4Q19 to
negative USD 112 million in 4Q20, as
a result of one-off income as VEON updated the fair value of its
put option liability in Pakistan.
This followed the completion of the independent valuation process
triggered by the exercise of the put option by the Dhabi Group in
September 2020. This process has
determined a fair value of USD 272.5
million, resulting in a gain of USD
59 million. In addition, financial expenses were reduced by
our financing activities during 2020, which decreased our average
cost of debt by 1.5p.p.
Income tax expense decreased by 37% YoY, broadly in
line with the YoY change in net profit.
The group recorded profit for the period of USD 35 million, a decrease of 27.6% YoY,
primarily due to negative currency movements.
Operational Capex was USD 674
million in 4Q20, up from the USD 579
million recorded in 4Q19, due mainly to VEON's focus on its
4G network investment program. Capex intensity over the last twelve
months (FY2020) was 23.7%.
FINANCIAL POSITION & CASH FLOW
Note: Certain comparative amounts have been reclassified to
conform to the current period presentation
Gross debt increased in 4Q20 compared to 3Q20 as a
result of the third drawdown under the Group's MTN Program of
USD 1.25 billion 3.375% senior
unsecured notes by VEON Holdings and new bank loans in Ukraine of USD 142
million. This was partially offset by the early redemption
of our USD 600 million 3.95% senior
notes due in June 2021 and the
repayment of a bank loan in Pakistan of USD 117
million.
Net debt (excluding lease liabilities) increased QoQ
in 4Q20 to USD 6,108 million due to
foreign exchange movements, appreciation of RUB versus USD in 4Q20
versus 3Q20. As a result, the Group's net debt (excl. lease
liabilities) to LTM EBITDA ratio was 2.0x in 4Q20.
Net cash from operating activities declined in 4Q20
against the previous year mainly due to negative foreign exchange
headwinds in EBITDA that offset positive operational dynamics, as
well as lower interest expenses and a decline in taxes
paid.
Net cash flow used in investing activities was
USD 500 million in 4Q20, broadly
stable YoY. Investment activities in 4Q20 were related to the
Group's investment in high-speed data networks and the acceleration
of a network deployment program in Russia in particular.
Net cash from financing activities was USD 590 million in 4Q20, up from negative
USD 171 million in 4Q19, primarily as
a result of movements in the gross debt as described above and
lease payments (principal amount).
COUNTRY PERFORMANCE
- Russia
- Pakistan
- Ukraine
- Kazakhstan
- Uzbekistan, Algeria and Bangladesh
Key figures by countries
RUSSIA
2020 was a year in which Beeline Russia made considerable
network investments. The key focus of the Beeline team was
stabilising the business' operating performance and improving our
customer experience, including 4G and digital services. We
anticipate further improvements in operational KPIs including
network performance metrics and subscriber trends, in the first
half of 2021 with positive YoY growth in total revenue for
Russia during the period.
Total revenue trends continued to improve, with
Russia recording only a 2% YoY
decline in 4Q20; an improvement compared to previous quarters
(declines of 7% YoY in 3Q20 and 10% YoY in 2Q20, respectively), as
a result of an improvements in handsets sales and continued growth
in the fixed-line and B2B segments, as well as improvements in
mobile service revenue trends. Mobile service revenue declined by
4% YoY, an improvement compared to 3Q20's 10% YoY decline, mainly
explained by a 41% YoY decline in roaming revenue due to travel
restrictions, loss in the migrant workforce and a decline in
content revenue of 31% YoY. The latter reflects Beeline's measures
to eliminate unrequested services from content providers to its
customers, which has proven to have a positive impact on the Net
Promoter Score and quarterly churn, which declined by 2.3p.p. YoY
in 4Q20. Excluding the impact of both decline in roaming revenue
and in content revenue, service revenue declined by 0.6% YoY in
4Q20.
Fixed-service revenue continued to show strong positive
performance, growing by 7% YoY in 4Q20, as customers continued to
draw on fixed-line data at home. Broadband subscribers increased 8%
YoY in 4Q20.
Business customers remained a strong focus, with B2B
revenue increasing by 11% YoY in 4Q20. Beeline continued to
enhance its offering in 4Q20 with new digital
services addressing growing customer's interest in integrated
solutions. In addition, Big Data revenue (a group of services
that analyse computationally large data sets to reveal patterns and
trends) grew by 44% YoY mainly driven by the expansion of
geo-analytical services and digital marketing solutions. Revenue
from advertising technology services increased by 14% YoY. Demand
in IT solutions for business digitalisation grew 9 times YoY.
Beeline's total mobile customer base declined by 9%
YoY in 4Q20, mainly due to customer churn in 1H20, as a result of
relative network performance, lower sales during strict lockdown
periods and the loss in the migrant workforce. Encouragingly,
Beeline managed to stabilise customer numbers in 3Q20 and reported
growth in 4Q20 of 0.3% versus 3Q20, supported by a number of
initiatives. These included, an accelerated network rollout,
customer centric offers and the elimination of unrequested services
from content providers. Beeline Russia is successfully growing its 4G user
base, which expanded by 11% YoY in 4Q20, as a result of improved
high-speed data services.
Beeline TV monthly active users increased to 2.7 million
in 4Q20 (33% YoY). In October 2020,
Beeline launched a new content offering, as well as targeted
customer propositions supported by an advanced customer
recommendation engine.
Beeline continues to focus its distribution through online
channels with a focus on self-registration products. The monthly
active users of the self-care application MyBeeline
increased by 27% YoY, which reflects Beeline's efforts to
digitalise contacts with customers and partners. In line with the
plans to enhance retail efficiency and place a greater emphasis on
online retail distribution, Beeline has closed a total of 872
stores over the last two years, which include own offices and
franchise. Beeline has no immediate plans to close further retail
stores and the company expects the rising trend of online sales to
positively affect the overall market and enable a more balanced and
cost-efficient distribution footprint with fewer retail points in
the future.
EBITDA decreased by 12% YoY, primarily driven by lower
revenue streams from services with high margins (roaming and
content revenue), as well as higher structural costs in relation to
the increased network investment and higher interconnection
costs due to the increased ratio of off-net traffic.
Capex excluding licenses and leases (operational capex)
increased by 33.5% YoY in 4Q20. Capex intensity was 27.0%,
reflecting continued high levels of network investment throughout
4Q20. Beeline increased its number of 4G base stations by 25% YoY,
focusing in particular on major cities, including Moscow and St.
Petersburg, as well as other regional hubs, to ensure high
quality infrastructure that is ready to integrate new technologies.
In 2020, Beeline tripled the pace of network development in
Moscow compared to 2019, fully
covered Moscow metro stations with
4G, redistributed frequency ranges for the high-speed data services
and implemented Voice over LTE technology.
UKRAINE
Kyivstar, Ukraine's
market-leading telecoms operator, recorded double-digit growth in
both revenue and EBITDA in 2020, driven by a continued focus on 4G
connectivity and digitalizing solutions for its customers. We
anticipate that Kyivstar will continue to deliver double-digit
revenue growth in 2021.
Total revenue for Kyivstar showed double-digit growth for
the second quarter in a row, achieving a full recovery after
lockdown measures were implemented in the spring of 2020. In 4Q20,
revenue was up 15% YoY, mainly as a result of ARPU expansion on the
back of strong 4G adoption. Mobile service revenue increased by 15%
YoY, supported by marketing activities and strong growth in data
consumption, resulting in mobile data revenue growth of 28% YoY. In
4Q20, fixed-line service revenue increased by 21% YoY as customers
continued to draw on fixed-line data at home, while Kyivstar
focused on FTTB rollout to address this growing demand.
B2B revenues increased by 8% YoY in 4Q20, reflecting
Kyivstar's promotion of new digital solutions for its business
customers and rapid growth in Big Data. Kyivstar is offering
Microsoft Azure Stack, one of the most popular cloud services for
business, that allows the transfer of complex computing to remote
facilities. For medium, small and start-up companies, Kyivstar
provides Open Application Programming Interfaces (Open API), a
unique platform in the market, developed fully in-house. By
offering Open API, Kyivstar can provide developers with data,
analytics, scoring capabilities and services in a user-friendly
environment.
Kyivstar's total mobile customer base showed a YoY
decline due to the decline of second SIM cards in the market and
lower gross additions during lockdown when the strict measures
resulted in the partial closure of Kyivstar stores. In 4Q20,
Kyivstar mobile customer base demonstrated growth compared to 3Q20,
which was supported by the strong growth in the 4G segment with
users up by 0.5 million (+6%) QoQ. As a result, data penetration
continued to increase, with 4G user base penetration of 36%, and
total 4G users of 9.3 million1, representing a
significant YoY increase of 30%. The growth in the 4G users and the
associated increase in data usage contributed to an ARPU increase
of 17% YoY.
COVID-19 lockdown measures have accelerated digital adoption. In
4Q20, the number of MyKyivstar self-care users was at 2.9 million,
up 81% YoY, while the Kyivstar TV service has recorded 433,000
users, reflecting a QoQ increase of 73%.
EBITDA increased by 10% YoY, resulting in an EBITDA
margin of 67%. This strong growth in EBITDA was supported by solid
revenue performance in the quarter.
Capex excluding licenses and leases (operational capex)
increased by 25.9% YoY and capex intensity was 19.3% for 4Q20.
Kyivstar's strategic focus included further 4G roll-out during the
quarter, driving 4G population coverage of 86%. In 4Q20, Kyivstar
and Vodafone continued their 4G mobile network sharing arrangement
in rural areas and on highways. Moreover, Kyivstar played a key
role in accelerating the development of the 4G nation-wide
infrastructure by voluntarily returning to the state its 900 MHz
bands, so that the regulator could provide opportunities to invest
in new technologies to other operators who face frequency
shortages.
1.4G users disclosed in the 3Q20 Earnings Release were restated
due to technical error and as a result the number of 3Q20 4G users
in Ukraine was 8.8 million
PAKISTAN
Jazz strengthened its leading position in the market in 4Q20 and
delivered record revenues, maintaining its strategic focus on
expanding digital services to drive further growth in what is one
of our most exciting growth markets.
Total revenue grew by 4% YoY, underpinned by another
strong quarter for mobile data revenue, which grew by 27% YoY.
Expansion in Jazz's 4G user base led this growth, increasing during
the quarter by 3 million new users, in line with the increase
recorded in 3Q20. Jazz's 4G penetration rate reached 38% during the
quarter, a marked acceleration from the 26% penetration recorded in
4Q19, and saw a rise of 61% YoY in 4G users.
Additional users contributed to an almost 10% expansion in
Jazz's total customer base during the year to 66 million,
while ARPU declined by 7% YoY mainly due to the administration fee
adjustment in Q4 2019 and overall softness in revenues due to the
impact of COVID-19. Jazz continues its commercial strategy of
focusing on higher quality of sales in order to further improve the
customer mix of its subscriber base, leveraging network quality and
higher bundle penetration to help achieve this.
Our leading digital financial services business in
Pakistan, JazzCash, experienced
another strong quarter. The State Bank of Pakistan's temporary removal of fees on money
transfers impacted JazzCash's total revenues, which declined by
27.4% YoY, but operationally the business continued to enjoy strong
momentum. JazzCash's user base saw double-digit growth, finishing
the quarter with 12.2 million monthly active users (up 67% YoY) and
27.4 million registered wallets (+47% YoY) in 4Q20.
Jazz's self-care app, Jazz World,
continued to enjoy strong levels of customer adoption. Its monthly
active user base grew by 122% YoY, reaching 7.8 million in 4Q20,
cementing its position as the largest telecom app in Pakistan. Our content services also enjoyed
further growth, with Jazz TV's monthly active user base rising to
1.2 million, representing YoY growth of 150% in 4Q20.
EBITDA decreased by 7% YoY due to the prior period
reversal of administration fee impact in 4Q19 of PKR 1.8 billion, the re-classification of
amortization of the Ex-Warid license from below EBITDA to service
costs (PKR 0.8 billion) in 4Q20 and
additional investments in JazzCash. Excluding these impacts, EBITDA
in 4Q20 increased by 9% YoY reflecting growth in revenue.
Capex excluding licenses and leases (operational capex)
was PKR 12.3 billion in 4Q20, resulting in capex intensity of
20.2% versus 16.2% in 4Q19. Within this, 4G network investment
continued to be the principal focus, the population coverage of
which reached 59% during the quarter, compared to 52% in 4Q19.
The ex-Warid license renewal was due in May 2019. Pursuant to the directions from
Islamabad High Court, the Pakistan Telecommunication Authority
("PTA") issued a license renewal decision on 22 July 2019 requiring payment of USD 39.5 million per MHz for 900 MHz spectrum and
USD 29.5 million per MHz for 1800 MHz
spectrum, equating to an aggregate price of approximately
USD 450 million (excluding advance
tax of 10%). On 17 August 2019, Jazz
appealed the PTA's order to the Islamabad High Court. On
21 August 2019, the Islamabad High
Court suspended PTA's order pending the outcome of the appeal and
subject to Jazz making payment. In September
2019 and May 2020, Jazz
deposited approximately USD 225
million and USD 57.54 million,
respectively, in order to maintain its appeal in the Islamabad High
Court regarding the PTA's underlying decision on the license
renewal. There were no specific terms and conditions attached to
the deposit. The deposit is recorded as a non-current financial
assets in the statement of financial position. The next hearing
date before the Islamabad High Court is 1
March 2021.
In 2019 and 2020 Pakistan revenue and EBITDA were impacted by
changes in tax and service charges related to the Supreme Court's
"suo moto order" in April 2019 and
our subsequent discussions with the PTA. Following a hearing on
25 June 2020, the PTA issued a
decision dated on 8 October 2020
directing Jazz to refund within 30 days the full amount of service
charges levied and collected from 24 April to 12 July 2019. Jazz appealed the PTA's decision to
the Islamabad High Court and on 6 November
2020 the High Court restrained recovery of the impugned
amounts. The next hearing date before High Court is yet to be
fixed. For further background, on the "suo moto order" and the
subsequent discussions with the PTA, please see our 3Q20 earnings
release dated 29 October 2020.
KAZAKHSTAN
Beeline Kazakhstan was the
fastest-growing business in VEON's portfolio in 4Q20, recording a
revenue increase of close to 20% YoY. This growth was underpinned
by strong demand for high-speed data services. Beeline continued to
focus on customer base value management in order to minimise
rotational churn and drive customer acquisitions amongst high-value
users. Complementing this was an ongoing focus on the delivery of a
growing range of digital services via Beeline's expanding 4G
network.
Total revenues grew by 19.8% YoY, underpinned by
both mobile service revenue growth of 13.9% and fixed-line service
revenue of 30.6%. Data revenue grew by 31.0% YoY, which continued
to drive the increase in total revenues, as Beeline accelerated the
growth of its 4G user base (+23% YoY), which reached 54% of its
total customer base in 4Q20. This, in turn, was facilitated through
a further expansion of Beeline's 4G network which now reaches 76%
of the nation's population.
Demand for Beeline's digital services remained strong
throughout 4Q20. Beeline TV saw its monthly active user base (MAU)
double YoY due to increased sales in fixed business and integration
of TV offers into mobile bundles. Beeline's MyBeeline self-care app
doubled MAUs YoY, reaching 1.9
million. Beeline's dedicated digital operator and mobile OTT
services provider 'Izi' also saw further growth in its customer
base, which had risen to 45,000 users by the end of 4Q20.
Elsewhere, Beeline continues to connect new agents to the company's
mobile financial services platform. As a result, the number of
wallet users grew by 40% YoY in 4Q20.
Despite the strong growth in Beeline's 4G customers, total
customers fell by 7% YoY during the quarter: a trend that
continues to reflect the impact of IMEI registration on the
industry's user base following its formal introduction in
November 2019. In the meantime, IMEI
had a positive impact on customer churn, which fell from 59% in
4Q19 to 43% in 4Q20, alongside Beeline's broader commercial
initiatives to reinforce its customer proposition and leading
market position. Longer term, IMEI registration requirement is
expected to benefit Beeline by improving the quality of the
company's customer base by removing multi-SIM users and zero-ARPU
customers.
Fixed-line service revenues demonstrated strong growth of 30.6%
YoY, as our fixed broadband customer base increased by 17.1% YoY.
The rising popularity of our convergent products contributed to
this success, the customer base of which grew by 41,000 (+78.9%
YoY) with approximately 20% of our fixed-line customers now using
convergent products.
EBITDA rose by 42.8% YoY, as a result of strong
revenue performance and a tax incentive for radio frequencies
recorded in 4Q20; excluding this tax incentive, EBITDA increased by
21.7% YoY.
Capex excluding licenses and leases (operational capex)
was KZT 20.1 billion and capex intensity was 25.0%. In 4Q20,
investments were mainly focused on expanding Beeline's 4G network
in order to satisfy the continued rise in high-speed data demand
that characterises this growth market. In 2020, Beeline has
provided 4G network coverage to new territories with 1.3 million
residents. In addition, in 4Q20 Beeline commenced network sharing
with other operators in support of the government's rural broadband
initiative which aims to bridge the digital divide across the
country's rural areas.
UZBEKISTAN
In Uzbekistan, COVID-19
restrictions continued to have an impact on the business and
pricing pressure persisted. As a result, the customer base and
revenue declined by 16.3% YoY and by 15.0% YoY in 4Q20,
respectively. These nevertheless reflect an improvement in the YoY
decline in revenue and customers reported in 3Q20. EBITDA declined
YoY as a result of a decrease in revenue.
Further improvement to our high-speed data networks continues to
be the priority for Beeline Uzbekistan, as increasing mobile data
penetration is the key long-term growth driver for us in the
Uzbekistan market.
ALGERIA
In Algeria, COVID-19 pandemic
has seen a resurgence in 4Q20 with new curfew measures implemented
in November and December 2020. This
resulted in lower customer mobility which further impacted the
market, while competition remained strong. Djezzy maintained its
segmented approach to stay competitive in a challenging
environment, notably repositioning itself towards the Algerian
youth with a dedicated digital-centric platform. The 7.2% YoY 4Q20
decline in revenue is explained by three factors: the aggressive
price competition, the overall economic slowdown as a result of the
COVID-19 and the 29% reduction in Djezzy's MT rate (from
DZD 0.95 per minute down to 0.67)
implemented by the Algerian Telecommunication Regulatory Authority
in November 2019 which reintroduced
asymmetry, with Djezzy suffering the greatest impact.
BANGLADESH
Banglalink delivered solid results in 4Q20 with YoY revenue and
EBITDA growth for the second consecutive quarter despite pandemic
situation.
Banglalink's ARPU rose 3.5% YoY in 4Q20 while cost optimisation
initiatives contributed to improvement in EBITDA. A continued drive
to enhance 4G network supported 5.7% YoY growth in data customers
and 22.1% YoY growth in data revenue. Banglalink continued to
actively promote the use of digital channels to facilitate top-ups,
account management and the adoption of additional services. As a
result, the user base of Banglalink's self-care app increased by
20% during 4Q20 compared to 3Q20 while Banglalink's video streaming
app "Toffee" gained 2.3 million monthly active users since its
launch one year ago. Banglalink has been awarded Ookla's Fastest
Mobile Network in Bangladesh based
on Ookla® Speedtest® Awards for the second half of 2020.
Previously, Banglalink won the same award for the first half of
2020.
The Bangladesh tax authority
introduced several changes to the local tax regime in June 2020. These include supplementary duty on
mobile usage, which increased from 10% to 15%; an increase in the
required deposit for filing an appeal to certain authorities from
10% to 20% of the disputed tax; and a VAT Rebate on telecom
equipment and accessories.
CONFERENCE CALL INFORMATION
On 18 February 2021, VEON will
host a conference call by senior management at 14:00 CET (13:00
GMT), which will be made available through following dial-in
numbers. The call and slide presentation may be accessed
at http://www.veon.com.
14:00 CET investor and analyst conference call
Netherlands dial-in number:
+31 (0) 207 157 566
Confirmation ID: 4087516
US dial-in number:
+1 646 787 12 26
Confirmation ID: 4087516
UK and International dial-in number:
+44 (0) 203 0095709
Confirmation ID: 4087516
The conference call replay and the slide presentation webcast
will be available for 12 months after the end of the event at the
same link as the live webcast.
The slide presentation will also be available for download from
VEON's website.
CONTACT INFORMATION
INVESTOR RELATIONS
Nik Kershaw
ir@veon.com
Tel: +31 20 79 77 200
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
operating model and development plans, among others; anticipated
performance and guidance for 2021, including VEON's ability to
sufficient cash flow; VEON's assessment of the impact of the
COVID-19 pandemic on its current and future operations and
financial condition; future market developments and trends;
operational and network development and network investment,
including expectations regarding the roll-out and benefits of
3G/4G/LTE networks, as applicable; spectrum acquisitions and
renewals; the effect of the acquisition of additional spectrum on
customer experience; VEON's ability to realize the acquisition and
disposition of any of its businesses and assets and to execute its
strategic transactions in the timeframes anticipated, or at all;
VEON's ability to realize financial improvements, including an
expected reduction of net pro-forma leverage ratio following the
successful completion of certain dispositions and acquisitions; our
dividends; and VEON's ability to realize its targets and commercial
initiatives in its various countries of operation. The
forward-looking statements included in this press release are based
on management's best assessment of VEON'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 further unanticipated developments
related to the COVID-19 pandemic, such as the effect on consumer
spending, that negatively affected VEON's operations and financial
condition; demand for and market acceptance of VEON's products and
services; our plans regarding our dividend payments and policies,
as well as our ability to receive dividends, distributions, loans,
transfers or other payments or guarantees from our subsidiaries;
continued volatility in the economies in VEON's markets; including
adverse macroeconomic developments caused by recent volatility in
oil prices in the wake of COVID-19; unforeseen developments from
competition; governmental regulation of the telecommunications
industries; general political uncertainties in VEON's markets;
government investigations or other regulatory actions; litigation
or disputes with third parties or other negative developments
regarding such parties; the impact of export controls and laws
affecting trade and investments on our and important third-party
suppliers' ability to procure goods, software or technology
necessary for the services we provide to our customers; risks
associated with data protection or cyber security, other risks
beyond the parties' control or a failure to meet expectations
regarding various strategic priorities, 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 VEON's Annual Report on Form 20-F for the
year ended December 31, 2019 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 press release
contain or may contain, "inside information" as defined under the
Market Abuse Regulation (EU) No. 596/2014.All non-IFRS measures
disclosed further in this press release (including, without
limitation, EBITDA, EBITDA margin, EBT, net debt, equity free cash
flow after licenses (excluding capitalized leases), local currency
growth, capital expenditures excluding licenses and LTM (last
twelve months) capex excluding licenses/revenue) are reconciled to
comparable IFRS measures in Attachment C to this earnings release.
In addition, we present certain information on a forward-looking
basis. We are not able to, without unreasonable efforts, provide a
full reconciliation to IFRS due to potentially high variability,
complexity and low visibility as to the items that would be
excluded from the comparable IFRS measure in the relevant future
period, including, but not limited to, depreciation and
amortization, impairment loss, loss on disposal of non-current
assets, financial income and expenses, foreign currency exchange
losses and gains, income tax expense and performance transformation
costs, cash and cash equivalents, long - term and short-term
deposits, interest accrued related to financial liabilities, other
unamortized adjustments to financial liabilities, derivatives, and
other financial liabilities.
ABOUT VEON
VEON is a NASDAQ and Euronext Amsterdam-listed global provider
of connectivity and digital services, headquartered in Amsterdam. Our vision is to empower customer
ambitions through technology, acting as a digital concierge to
guide their choices and connect them with resources that match
their needs.
For more information visit: http://www.veon.com
CONTENT OF THE ATTACHMENTS
Attachment
A
Definitions 17
Attachment
B
Customers
19
Attachment
C
Reconciliation
tables
19
Attachment
D
Average rates of functional currencies to
USD 22
Attachment
E
VEON financial
schedules
23
For more information on financial and operating data for
specific countries, please refer to the supplementary file
Factbook4Q2020.xls on VEON's website at
http://veon.com/Investor-relations/Reports--results/Results/.
ATTACHMENT A: DEFINITIONS
ARPU (Average Revenue Per User) measures the monthly
average revenue per mobile user. We generally calculate mobile ARPU
by dividing our mobile service revenue during the relevant period,
including data revenue, roaming revenue, MFS 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.
Mobile 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.
Capital expenditures (capex) are purchases of new
equipment, new construction, upgrades, licenses, 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.
Operational capital expenditures (operational
capex) calculated as capex, excluding purchases of new
spectrum licenses and capitalised leases. Capex intensity is
a ratio, which is calculated as LTM operational capex divided by
LTM revenue.
EBIT or Operating Profit 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.
EBITDA (called Adjusted EBITDA in the Form 20-F
published by VEON) is a non-IFRS financial measure. VEON calculates
Adjusted EBITDA as (loss)/profit before interest, tax,
depreciation, amortization, impairment, gain / loss on disposals of
non-current assets, other non-operating gains / losses and share of
profit / loss of joint ventures and associates Our Adjusted EBITDA
may be used to evaluate our performance against other
telecommunications companies that provide EBITDA.
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.
EBITDA Adjusted is calculated as EBITDA adjusted on
non-recurring items that materially affect year-on-year comparison,
reconciliation to EBITDA and list of non-recurring items are
presented in the reconciliation tables in Attachment C below.
EBITDA Adjusted margin is calculated as EBITDA Adjusted
divided by total revenue, expressed as a percentage.
Gross Debt is calculated as the sum of long-term
notional debt and short-term notional debt including capitalised
leases.
Equity free cash flow - is a non-IFRS measure and is
defined as free cash flow from operating activities less cash flow
used in investing activities, after license payments and lease
payments (principal amount); excluding M&A transactions,
inflow/outflow of deposits, financial assets and other one-off
items. Reconciliation to the most directly comparable IFRS
financial measure, is presented in the reconciliation tables
section in Attachment C below.
A fixed-mobile convergence customer (FMC customer)
is a customer on a one month Active Broadband Connection
subscribing to a converged bundle consisting of at least fixed
internet subscription and at least one mobile SIM.
Mobile financial services (MFS) of Digital financial services
(DFS) 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.
Mobile customers are generally customers in the
registered customer base as at a given measurement date who engaged
in a mobile 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 and
fixed-mobile convergence ("FMC").
Net debt is a non-IFRS financial measure and is
calculated as the sum of interest bearing long-term debt including
capitalised leases and short-term notional debt minus cash and cash
equivalents, long-term and short-term deposits. The Company
believes that net debt provides useful information to investors
because it shows the amount of notional 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 debt
excluding lease obligations is a net debt less capitalised
leases.
Net foreign exchange (loss)/gain and others
represents the sum of Net foreign exchange (loss)/gain, VEON's
share 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.
Net Promoter Score (NPS) is the methodology VEON
uses to measure customer satisfaction.
Local currency trends (growth/decline) 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. For other factors please refer to section
"non-recurring items that affect year-on-year comparisons".
VEON's reportable segments are the following, which
are principally based on business activities in different
geographical areas: Russia,
Pakistan, Algeria, Bangladesh, Ukraine, Uzbekistan, Kazakhstan and HQ based on the business
activities in different geographical areas.
ATTACHMENT B:
CUSTOMERS
ATTACHMENT C: RECONCILIATION TABLES
RECONCILIATION OF CONSOLIDATED EBITDA
RECONCILIATION OF CAPEX
RECONCILIATION OF ORGANIC AND REPORTED GROWTH RATES
1 In 2Q19 exceptional item of a one-off payment
of USD 38 million received in 2Q19 in
relation to the termination of a network sharing agreement in
Kazakhstan between our subsidiary
KaR-Tel LLP and Kcell Joint Stock Company ("Kcell") following
Kazakhtelecom JSC's acquisition of 75 percent of Kcell's shares and
a one-off vendor payment of USD 350
million received in 1Q19.
RECONCILIATION OF VEON CONSOLIDATED NET DEBT
RECONCILIATION OF EQUITY FREE CASH FLOW
EBITDA RECONCILIATION ON COUNTRY LEVEL
4Q 2020
FY 2020
RATES OF FUNCTIONAL CURRENCIES TO USD
ATTACHMENT E: VEON LTD FINANCIAL SCHEDULES
VEON LTD UNAUDITED
CONSOLIDATED STATEMENT OF INCOME
|
for the years ended
December 31
|
|
|
|
|
|
2020
|
2019
|
2018
|
(In millions of
U.S. dollars, except per share amounts)
|
|
|
|
|
|
|
|
Service
revenues
|
7,471
|
8,240
|
8,526
|
Sale of equipment and
accessories
|
392
|
465
|
427
|
Other revenues / other
income
|
117
|
158
|
133
|
Total operating
revenues
|
7,980
|
8,863
|
9,086
|
|
|
|
|
Other operating
income
|
5
|
350
|
—
|
|
|
|
|
Service
costs
|
(1,508)
|
(1,554)
|
(1,701)
|
Cost of equipment and
accessories
|
(382)
|
(479)
|
(415)
|
Selling, general and
administrative expenses
|
(2,641)
|
(2,965)
|
(3,697)
|
Depreciation
|
(1,576)
|
(1,652)
|
(1,339)
|
Amortization
|
(343)
|
(394)
|
(495)
|
Impairment (loss) /
reversal
|
(785)
|
(108)
|
(858)
|
Gain / (loss) on
disposal of non-current assets
|
(37)
|
(43)
|
(57)
|
Gain / (loss) on
disposal of subsidiaries
|
(78)
|
1
|
30
|
|
|
|
|
Operating
profit
|
635
|
2,019
|
554
|
|
|
|
|
Finance
costs
|
(683)
|
(892)
|
(816)
|
Finance
income
|
23
|
53
|
67
|
Other non-operating
gain / (loss)
|
111
|
21
|
(68)
|
Net foreign exchange
gain / (loss)
|
(60)
|
(20)
|
15
|
Profit / (loss)
before tax from continuing operations
|
26
|
1,181
|
(248)
|
|
|
|
|
Income tax
expense
|
(342)
|
(498)
|
(369)
|
Profit / (loss) from
continuing operations
|
(316)
|
683
|
(617)
|
|
|
|
|
Profit / (loss) after
tax from discontinued operations
|
—
|
—
|
(300)
|
Gain / (loss) on
disposal of discontinued operations
|
—
|
—
|
1,279
|
Profit / (loss) for
the period
|
(316)
|
683
|
362
|
|
|
|
|
Attributable
to:
|
|
|
|
The owners of the
parent (continuing operations)
|
(349)
|
621
|
(397)
|
The owners of the
parent (discontinued operations)
|
—
|
—
|
979
|
Non-controlling
interest
|
33
|
62
|
(220)
|
|
(316)
|
683
|
362
|
|
|
|
|
Basic and diluted
gain / (loss) per share attributable to ordinary equity holders of
the parent:
|
|
|
|
From continuing
operations
|
($0.20)
|
$0.36
|
($0.23)
|
From discontinued
operations
|
$0.00
|
$0.00
|
$0.56
|
Total
|
($0.20)
|
$0.36
|
$0.33
|
|
|
|
|
VEON LTD UNAUDITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
as of
December 31
|
|
|
|
|
2020
|
2019
|
(In millions of
U.S. dollars)
|
|
|
|
|
|
Assets
|
|
|
Non-current
assets
|
|
|
Property and
equipment
|
6,879
|
7,340
|
Intangible
assets
|
4,152
|
5,688
|
Investments and
derivatives
|
305
|
235
|
Deferred tax
assets
|
186
|
134
|
Other assets
|
179
|
163
|
Total non-current
assets
|
11,701
|
13,560
|
|
|
|
Current
assets
|
|
|
Inventories
|
111
|
169
|
Trade and other
receivables
|
572
|
628
|
Investments and
derivatives
|
165
|
82
|
Current income tax
assets
|
73
|
16
|
Other assets
|
335
|
354
|
Cash and cash
equivalents
|
1,594
|
1,250
|
Total current
assets
|
2,850
|
2,499
|
|
|
|
Total
assets
|
14,551
|
16,059
|
|
|
|
Equity and
liabilities
|
|
|
Equity
|
|
|
Equity attributable to
equity owners of the parent
|
163
|
1,226
|
Non-controlling
interests
|
850
|
994
|
Total
equity
|
1,013
|
2,220
|
|
|
|
Non-current
liabilities
|
|
|
Debt and
derivatives
|
8,832
|
7,759
|
Provisions
|
141
|
138
|
Deferred tax
liabilities
|
127
|
141
|
Other
liabilities
|
28
|
33
|
Total non-current
liabilities
|
9,128
|
8,071
|
|
|
|
Current
liabilities
|
|
|
Trade and other
payables
|
1,977
|
1,847
|
Debt and
derivatives
|
1,224
|
2,585
|
Provisions
|
151
|
222
|
Current income tax
payables
|
175
|
102
|
Other
liabilities
|
883
|
1,012
|
Total current
liabilities
|
4,410
|
5,768
|
|
|
|
Total equity and
liabilities
|
14,551
|
16,059
|
VEON LTD UNAUDITED
CONSOLIDATED STATEMENT OF CASH FLOW
|
for the years ended
December 31
|
|
(In millions of
U.S. dollars)
|
2020
|
2019
|
2018
|
|
|
|
|
Operating
activities
|
|
|
|
Profit / (loss) before
tax from continuing operations
|
26
|
1,181
|
(248)
|
Non-cash adjustments
to reconcile profit before tax to net cash flows
|
|
|
|
Depreciation,
amortization and impairment loss / (reversal)
|
2,704
|
2,154
|
2,692
|
(Gain) / loss on
disposal of non-current assets
|
37
|
43
|
57
|
(Gain) / loss on
disposal of subsidiaries
|
78
|
(1)
|
(30)
|
Finance
costs
|
683
|
892
|
816
|
Finance
income
|
(23)
|
(53)
|
(67)
|
Other non-operating
(gain) / loss
|
(111)
|
(21)
|
68
|
Net foreign exchange
(gain) / loss
|
60
|
20
|
(15)
|
|
|
|
|
Changes in trade and
other receivables and prepayments
|
(107)
|
(224)
|
96
|
Changes in
inventories
|
40
|
(28)
|
(88)
|
Changes in trade and
other payables
|
94
|
52
|
274
|
Changes in provisions,
pensions and other
|
(29)
|
106
|
40
|
|
|
|
|
Interest
paid
|
(644)
|
(714)
|
(736)
|
Interest
received
|
23
|
58
|
60
|
Income tax
paid
|
(388)
|
(516)
|
(404)
|
|
|
|
|
Net cash flows from
operating activities
|
2,443
|
2,949
|
2,515
|
|
|
|
|
Investing
activities
|
|
|
|
Purchase of property,
plant and equipment and intangible assets
|
(1,778)
|
(1,683)
|
(1,948)
|
Payments on
deposits
|
(142)
|
(922)
|
(32)
|
Receipts from
deposits
|
69
|
698
|
1,066
|
Proceeds from sale of
Italy Joint Venture
|
—
|
—
|
2,830
|
Receipts from /
(investment in) financial assets
|
(89)
|
(9)
|
62
|
Other proceeds from
investing activities, net
|
30
|
28
|
19
|
|
|
|
|
Net cash flows from
/ (used in) investing activities
|
(1,910)
|
(1,888)
|
1,997
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from
borrowings, net of fees paid *
|
4,621
|
2,610
|
807
|
Repayment of
debt
|
(4,376)
|
(2,978)
|
(4,122)
|
Acquisition of
non-controlling interest
|
(1)
|
(613)
|
—
|
Dividends paid to
owners of the parent
|
(259)
|
(520)
|
(508)
|
Dividends paid to
non-controlling interests
|
(88)
|
(138)
|
(93)
|
|
|
|
|
Net cash flows from
/ (used in) financing activities
|
(103)
|
(1,639)
|
(3,916)
|
|
|
|
|
Net increase /
(decrease) in cash and cash equivalents
|
430
|
(578)
|
596
|
Net foreign exchange
difference
|
(48)
|
(9)
|
(119)
|
Cash and cash
equivalents at beginning of period
|
1,204
|
1,791
|
1,314
|
|
|
|
|
Cash and cash
equivalents at end of period, net of overdraft **
|
1,586
|
1,204
|
1,791
|
* Fees paid for
borrowings were US$29 (2019: US$23, 2018:
US$64)
|
** Overdrawn
amount was US$8 (2019: US$46)
|
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SOURCE VEON Ltd