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Telecom
March 2019 www.intellinews.com I Page 27
Big three mobile company VEON reports unexciting 4Q19 results
Veon released the fourth quarter of 2018 IFRS re- sults on February 25, followed by a management presentation in London.
Revenue was down 3% y/y in the fourth quarter
of 2018 (but up 5% adjusted for currency move- ments). EBITDA declined 5% y/y (up 10% adjusted for currency movements), for 32% margin that was flat y/y.
Country-wise, we saw good results in Pakistan and Ukraine, mixed numbers in Russia (good mobile service growth, but a decline in EBITDA due to one- off costs), weak in Bangladesh and Algeria (exclud- ing one-offs), BCS Global Markets said in a note.
Adjusted free cash flow (FCF) reached $1bn in 2018 ($0.6bn non-adjusted), which was in line with the management’s guidance.
Final 2018 dividend was set at $0.17/share (7% yield), with a record date of March 8 – internation- al women’s day.
“The total 2018 dividend per share (DPS) thus stood at $0.29 (12% yield), up from $0.28 for 2017,” adds BCS.
The management also provided guidance for the rest of the year, with low single digit revenue in- creases and a low-to-middling single digit growth in EBITDA. The management also said there would be $1bn of FCF adjusted, including $0.35bn positive one-off from Ericsson contract ($0.7bn organic FCF adjusted), and $0.8bn long-term
FCF adjusted run-rate (for 2020 and beyond).
Also during the conference call the management denied rumors regarding the sale of its Russian unit.
The company reiterated its commitment to stead- ily increase dividends, though it stressed that they depend on FCF evolution, which bears FX risks.
Veon is switching to new IFRS standards in 2019, which should add $450mn (14% 2018 number) to EBITDA and cut $100mn off net income
“The 2018 FCF adjusted was in-line and dividend remained solid (y/y increase in FY DPS). However, lower than expected underlying FCF for 2019 and beyond may suggest a downside to our forecasts, though a lot is already priced in,” BCS said in
a note.