The company said in a statement that the drop to $1,892 million was in part the result of lockdowns across its operating markets which put pressure on both operational and financial performance during the quarter before gradual relaxations enabled a steady late-quarter improvement across a number of markets.
In addition, Russia revenues were challenged by ongoing pressure on subscriber numbers and lower ARPU during lockdown, and Pakistan year-on-year revenue trend remained positive excluding the tax regime change.
“Our operations were impacted by, amongst others, store closures, the loss of roaming and migrant customer revenues, and lower equipment and accessory sales,” it continued.
Despite the revenue fall, VEON reported a strong profit for the period, hitting $156 million, up 124.8% YoY.
Other relevant figures from the operator’s quarter 2 report include an EBITDA of $809 million, -18.7% YoY on a reported basis; mobile subscriber base declining to 205 million active subscribers, -3.4% YoY.;
Operational Capex was $492 million, with LTM CAPEX intensity of 20.8% and the business continued its strong capital structure, with the leverage level at 2.0x excluding lease liabilities; total cash and undrawn committed credit lines at $2.5 billion; 1H20 refinancing activities decreased average cost of debt to 6.4% and improved average debt maturity to 2.8 years.
The momentum in mobile data revenue continued in the period, growing in local currency terms by +14.4% YoY, supported by growth in Ukraine of +13.1% YoY, in Pakistan of +27.6%YoY and in Bangladesh of +30.3% YoY, as a result of ongoing 4G investments.
Kaan Terzioğlu (pictured left) and Sergi Herrero (picture right), co-CEOs, said: “The second quarter of 2020 saw the full impact of the COVID-19 pandemic on activity across our operating markets. National and local lockdowns deepened the reliance of our customers on connectivity services as the challenges of physical isolation intensified.
“Safeguarding lives, sustaining livelihoods and enhancing lifestyles continued to define VEON’s commitment to our customers throughout as we help them adapt to the unprecedented challenges presented by this crisis.”
The executives continued to say that cost reduction remains a key priority for the group as it seeks to limit the financial impact of lockdown measures on operating performance.
“Planned restructuring of our headquarters and reductions in our staff-related costs in the second quarter lessened the margin impact of lower revenues,” they said. “This was achieved despite higher network OPEX, particularly in Russia where we continued to invest in our 4G infrastructure to ensure our customers can enjoy best-in-class experiences of our services.
“Growth in our B2B business, mobile data revenue and home connectivity services are encouraging signs of consumer confidence. Across our markets, we remain committed to expanding our 4G networks in order to meet the considerable demand from our customers for data, which continued to grow at a double-digit pace during the second quarter as lockdowns accelerated adoption of our expanding range of digital services.”
Terzioğlu and Herrero added that the current pandemic continues to drive divergent revenue trends across markets, with greater demand for data and digital services offset by lower in-store sales and roaming activity. These trends are likely to dominate the second half of the year and are reflected in the business’ revised financial guidance for FY 2020, which forecasts a gradual recovery in group revenue and EBITDA from second-quarter levels as lockdowns are eased but a decline in each on a year-over-year basis given the extent of the pandemic’s impact on our operating activities to date.
Terzioğlu and Herrero, said: “Longer term, we remain excited by the growth opportunities we enjoy as our 4G network deployment program drives greater levels of customer engagement and services adoption. We are committed to executing further on our planned operational improvements, particularly in Russia, where we continue to invest in network quality and a growing range of digital services. Elsewhere, the early-stage nature of our markets provides us with a structural growth opportunity in digital adoption which the current pandemic is accelerating. We remain committed to our current capex plans to ensure we are positioned strongly to capture this.”
