VEON .(VEON) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2024, the company achieved a 12.1% year-on-year growth in U.S. dollar revenues, a significant increase from 6.6% in Q1 and 1% in Q4 of 2023 [4] - Group EBITDA grew by 10.6% in Q2, compared to a mere 0.2% in Q1 [4] - Local currency revenue growth was 15% year-on-year, with service revenues rising 14.5% [5] - The cash position at the end of the quarter was $722 million, with gross debt reduced by 23% year-on-year [5] Business Line Data and Key Metrics Changes - In Ukraine, Kyivstar reported a revenue growth of 9.1% year-on-year, with EBITDA growing by 9.8% [6] - In Pakistan, service revenue grew by 22.8% year-on-year, while Kazakhstan saw an 18.9% increase [6] - The multi-play segment revenue represented 50% of consumer revenues, growing 36% year-on-year in local currency [8] - Direct digital revenues accounted for 10% of total revenues, reaching $108 million in Q2 [9][10] Market Data and Key Metrics Changes - In Central and South Asia, local currency revenue growth remained robust, with Pakistan and Kazakhstan leading the way [6] - In Bangladesh, despite network outages leading to a $10 million revenue loss, Banglalink revenues rose 4% year-on-year [19] - Beeline Kazakhstan's total revenues rose 19% year-on-year, with digital direct revenue growing 100% [16] Company Strategy and Development Direction - The company is focusing on enhancing digital offerings and expanding its presence in key verticals, driving growth and delivering value [10] - The strategy includes a strong emphasis on multi-play services, which have shown to increase customer retention and ARPU [8] - The company aims to be the 1 augmented intelligence partner in its markets, developing language-specific models to meet local needs [24] Management's Comments on Operating Environment and Future Outlook - Management noted that the average inflation rate across markets has decreased to slightly less than 10%, with local currency growth averaging around 16% [4] - The company expects normalized growth rates for both revenue and EBITDA to be around 16% in local currency for 2024 [30] - The interim government in Bangladesh is seen as a positive development, unlocking growth potential for the company [32] Other Important Information - The company has committed to significant capital expenditures to ensure network resilience, particularly in Ukraine [11] - The digital services segment is diversifying, with financial services and entertainment platforms showing strong growth [14][15] Q&A Session Summary Question: Breakdown of upstreaming figures by country - Management declined to provide a detailed breakdown due to government sensitivities [30] Question: Impact of recent events in Bangladesh on Q3 and long-term implications - Management acknowledged a $10 million revenue impact due to network issues but expressed optimism about future growth under the new interim government [31][32] Question: Plans for repaying 2025 maturities - Management confirmed that the company is well-funded for upcoming maturities [34]