VEON Ltd Reports Strong Earnings and Strategic Growth

VEON Ltd ((VEON)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for VEON Ltd showcased a robust positive sentiment, driven by significant growth in revenue and digital services. The company has demonstrated impressive market performance and strategic partnerships, despite facing some challenges related to deconsolidation impacts and regulatory issues in Kazakhstan. Overall, VEON’s financial position has improved, contributing to an optimistic outlook.

Strong Revenue and EBITDA Growth

VEON reported an impressive 8.9% increase in revenue and a 13.7% rise in EBITDA year-over-year. When adjusted for the deconsolidation of TNS+, revenue growth was even higher at 11.7%, with EBITDA growing by 15.5%. This indicates a solid financial performance and effective management strategies.

Surge in Digital Revenues

The company experienced a remarkable 50.2% growth in direct digital revenues, which now account for 14.3% of total revenues, up from 10.4% the previous year. This surge underscores VEON’s successful expansion into digital services, reflecting a strategic focus on digital transformation.

Successful Strategic Partnerships

VEON’s strategic partnership with Engro Corporation in Pakistan is a key highlight, expected to unlock USD 563 million in value. This partnership exemplifies VEON’s strategic initiatives to enhance value creation and strengthen its market position.

Positive Market Performance

VEON achieved strong market performance in several regions, with Pakistan and Ukraine both reporting over 20% revenue growth, and Uzbekistan showing a 13.1% increase. These results highlight the company’s ability to thrive in diverse markets.

Improved Financial Position

The company has improved its financial standing, with net debt excluding leases reduced to $1.8 billion and a net debt-to-EBITDA ratio of 1.2x. Additionally, VEON’s cash position has strengthened to $1.8 billion, showcasing effective financial management.

Deconsolidation Impact

The deconsolidation of TNS+ had an impact on reported revenue and EBITDA figures, necessitating adjustments to accurately reflect VEON’s growth. This highlights the importance of considering underlying factors in financial assessments.

Regulatory Impact in Kazakhstan

In Kazakhstan, the absence of regulatory tax benefits affected EBITDA, resulting in flat year-over-year performance when adjusted. This regulatory challenge underscores the complexities of operating in diverse regulatory environments.

High CapEx in Ukraine

VEON’s CapEx in Ukraine increased significantly due to investments in battery and generators amidst the ongoing war environment. This has affected the group’s overall CapEx intensity, reflecting the company’s commitment to maintaining operations under challenging circumstances.

Forward-Looking Guidance

Looking ahead, VEON provided guidance for 2025, emphasizing strong financial performance and strategic initiatives. The company projects 12% to 14% revenue growth and 13% to 15% EBITDA growth in local currency terms, with a CapEx intensity of 17% to 19%. VEON’s focus on expanding digital services and its asset-light strategy are expected to drive future growth.

In conclusion, VEON’s earnings call highlighted a strong positive sentiment, driven by impressive revenue growth, strategic partnerships, and a robust financial position. Despite challenges in certain markets, the company’s forward-looking guidance remains optimistic, with expectations of continued growth and expansion in digital services.