Veon turns in solid numbers during corporate revamp - Mobile World Live

Veon turns in solid numbers during corporate revamp

02 AUG 2018

Operator group Veon claimed to have made progress in setting itself up for future growth, as it took “decisive action” in its emerging markets activities and revamped operations at its headquarters.

The company reported a Q2 loss of $138 million, compared with a prior-year loss of $258 million, on revenue of $2.27 billion, down from $2.42 billion. The decrease in revenue was attributed mainly to currency movements: the figure grew by 3 per cent organically, driven by Russia, Pakistan, Ukraine, and Uzbekistan.

Veon did, however, note continued pressure in Algeria and Bangladesh.

Russia remains Veon’s biggest market by far, accounting for more than half of total revenue. Sales of $1.17 billion were down 1.9 per cent as reported, or up 4.5 per cent organically. The Beeline business performed well despite integration costs for the Euroset retail operation and the competitive environment was stable, although the company “expects the macro-economic and market conditions to remain challenging in Russia”.

Staffing impacts
As part of a review of how it supports operating companies in emerging markets, Veon appointed Kjell Morten Johnsen as group COO, with all operating companies reporting to him.

But the company’s digital efforts are likely to be hit by the departure of group chief commercial and digital officer Christopher Schlaeffer later this year. In its statement, Veon said it “remains committed to its significant investment in digital infrastructure and services, and a search is underway for his successor”.

Digital does appear to have slipped down the Veon agenda: it was hardly mentioned in the results release, with the presentation listing “digital agenda” last on its list of near-term priorities.

The company is also on the hunt for a new CEO, following the departure of Jean-Yves Charlier.

Strategy
In July, Veon entered into a deal to offload its 50 per cent stake in Wind Tre (Italy) to partner CK Hutchison. The company will receive €2.45 billion in cash, part of which will be used to acquire Global Telecom Holding (GTH) assets, with the rest going towards reducing debt and supporting its dividend policy.

Veon said a deal to acquire assets in Pakistan and Bangladesh from GTH fits its plan to simplify its corporate structure and increase its focus on emerging markets.

The company ended the second quarter with 210 million mobile customers, up 0.9 per cent year-on-year, driven by growth in customer numbers in Pakistan, Bangladesh and Ukraine.

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Steve Costello

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