VEON .(VEON)2025-05-15 13:35Financial Performance - VEON reported total revenue of USD 1,026 million for Q1 2025, reflecting an 8.9% year-on-year increase in reported currency and a 12.9% increase in underlying local currency terms[5][7]. - EBITDA for Q1 2025 reached USD 439 million, representing a 13.7% year-on-year increase in reported currency and a 10.4% increase in underlying local currency terms[5][19]. - In Q1 2025, total operating revenues increased by 8.9% year-on-year to US$1,026 million, with net profit for the period reaching US$118 million, a 50.9% increase[38][39]. - VEON expects total revenue growth of 12% to 14% and EBITDA growth of 13% to 15% year-on-year for 2025[9][11]. - The company’s net debt, excluding leases and banking operations in Pakistan, decreased to USD 1,810 million as of March 31, 2025, down from USD 1,901 million at the end of 2024[122]. - Cash and cash equivalents at the end of Q1 2025 were US$1,774 million, a significant increase from US$832 million in Q1 2024[40]. - The company reported a gross debt of USD 4,377 million, with net debt excluding leases at USD 3,282 million[123]. Digital Revenue Growth - Direct digital revenues surged by 50.2% year-on-year to USD 147 million, now accounting for 14.3% of total revenues, up from 10.4% a year ago[12][11]. - Total digital users reached 125.1 million, a 25% year-on-year increase, with digital-only users surging 58% to 32.4 million[25]. - Direct digital revenue in Pakistan surged 49.5% YoY, contributing 27.7% of total revenues, with JazzCash revenues growing 66.1% YoY[52]. - Digital revenues in Kazakhstan increased by 29.4% YoY, contributing 12.1% to total revenues in 1Q25, driven by demand for digital services like BeeTV and Simply[71]. - The mobile financial services platform Beepul grew its customer base by 152% YoY to over 2.3 million MAUs[89]. Customer Growth and Engagement - The number of 4G users grew by 3.3% year-on-year to 101.5 million, with 4G penetration reaching 66.6% of the total subscriber base[20][12]. - Multiplay customers increased by 24.8% year-on-year to 42.7 million, representing 32.3% of the total user base, contributing to a 26.4% year-on-year growth in multiplay revenues[21][12]. - JazzCash in Pakistan reported 20.6 million monthly active users (MAUs), a 19.4% year-on-year increase, with LTM transactional value rising 62.8% year-on-year to PKR 10.8 billion (US$38.6 billion)[26]. - Tamasha in Pakistan grew MAUs by 37.6% year-on-year to 16.5 million, while Kyivstar TV in Ukraine reached 2 million MAUs, a 34.9% year-on-year increase[27]. - The SuperApp Hambi reached 4.3 million users, a 30.4% increase from the prior period, and was ranked as the top app on Google Play in Uzbekistan[90]. Capital Expenditure and Investments - Capex increased by 8.3% year-on-year to USD 135 million, with a last twelve months (LTM) capex intensity of 20.4%[8][12]. - The company’s capex intensity for 2025 is expected to be in the range of 17% to 19%[33]. - Capex in Ukraine reached UAH 2,422 million, up 125.9% YoY, indicating a focus on network and digital capabilities expansion[60]. - In 1Q25, Kyivstar's capex surged by 126% YoY to UAH 2,422 million, resulting in a capex intensity of 22.6% as the company focused on network resilience and 4G expansion[67]. - Capex in Uzbekistan dropped by 78.2% YoY to UZS 114,870 million in 1Q25, reflecting a capex intensity of 12.2%[83]. Strategic Initiatives - VEON is focusing on its "AI1440" strategy to integrate AI-powered features in digital applications, enhancing customer experience across various markets[22][12]. - The company is focusing on expanding its digital platforms, which contribute to direct digital revenues, enhancing overall revenue streams[130]. - VEON's strategic priorities include expanding its digital experience and leveraging technologies such as artificial intelligence to enhance customer offerings[146]. Regional Performance - Total revenue increased by 8.9% YoY to USD 1,026 million in 1Q25, with significant growth in Ukraine (49.5% YoY) and Pakistan (20.4% YoY) revenues[49]. - Kyivstar's total revenue increased by 49.5% YoY to UAH 10,720 million, driven by a 140.7% increase in direct digital revenue[60]. - Banglalink's total revenue in Bangladesh decreased by 12.4% YoY to BDT 13,519 million in 1Q25, impacted by a 14.6% decline in mobile customers[77][78]. - In Uzbekistan, total revenue rose by 13.1% YoY to UZS 938,751 million in 1Q25, with digital revenue skyrocketing by 224.5% YoY[83][84]. Debt and Financial Leverage - Net debt to LTM EBITDA, excluding lease liabilities, improved to 1.23x, down from 1.34x as of December 31, 2024[8][12]. - Net debt decreased by 1.0% quarter-on-quarter to US$2,905 million, with a net debt to LTM EBITDA ratio of 1.67x[42]. - The net debt of VEON is calculated as interest-bearing long-term debt minus cash and cash equivalents, providing insight into the company's financial leverage[140]. Market Challenges - The ongoing war in Ukraine has significantly impacted VEON's operations, necessitating close monitoring of the situation and its effects on financial performance[151]. - Future market developments and trends are uncertain, with potential impacts from geopolitical conflicts and regulatory changes affecting operations[146].