VEON achieves EBITDA margin of 40.4 percent in Q3

VEON Q3 revenueVEON posted revenue of $2.456 billion (+4 percent), EBITDA of $1.042 billion (+16.4 percent) with EBITDA margin of 40.4 percent, profit of $125 million (–72 percent) and Capex of $398 million (+4.1 percent) in Q3 2017.

VEON, which has more than 235 million customers, said the increase of 16.4 percent in EBITDA was due to net exceptional income of $49 million resulting from a $106 million one-off adjustment to a vendor agreement, partially offset by $57 million performance transformation costs and other legal costs.

The 4 percent growth in revenue was driven by strong revenue growth in Russia, Pakistan, Ukraine and Uzbekistan, with continued pressure in Algeria and Bangladesh.

VEON has generated Q3 revenue of $1,229 million from Russia, $391 million from Pakistan, $238 million from Algeria, $144 million from Bangladesh, $166 million from Ukraine and $130 million from Uzbekistan.

“VEON reported another solid performance in the third quarter with further growth in revenue and EBITDA, driven in particular by strong results in Russia, Pakistan and Ukraine, and also delivered on a number of our strategic imperatives,” said VEON CEO Jean-Yves Charlier.

VEON said mobile data revenue achieved organic growth of 26.6 percent, with mobile customers increasing 2.3 percent to 211 million, driven by Russia, Pakistan, Bangladesh and Ukraine. VEO said FMC (Fixed-mobile convergence) customers reached more than one million customers in Q3 2017.


VEON said Capex excluding licenses increased 4 percent to $398 million in Q3 2017 due to improved Capex planning, compared to back end loaded Capex in FY 2016 and improved coverage and network availability in Bangladesh. The last 12 months ratio of Capex to revenue was 18.4 percent in Q3 2017, with the Q3 2017 stand-alone ratio at 16.2 percent, stable year-on-year.

VEON continued 3G expansion in Pakistan and 3G and 4G/LTE network expansion in Algeria. VEON said its 3G business in Bangladesh is facing spectrum related issues as compared to market leader Grameenphone.


Banglalink service revenue fell 5.6 percent to BDT 11.3 billion — mainly due to the gap in 3G network coverage compared to the market leader and due to network availability issues caused by the extreme weather conditions.

Data revenue growth of Banglalink was driven by data usage growth of 106.4 percent along with 17.1 percent growth in active data users. ARPU decreased as a result of the pricing pressure in the market. Banglalink’s EBITDA decreased 19.4 percent to BDT 4.6 billion, which was mainly caused by the revenue erosion together with higher customer acquisition costs and technical expenses to improve network availability.

Capex of Banglalink excluding licenses increased 31.9 percent to BDT 2.3 billion, with a LTM Capex to revenue ratio of 20.1 percent. Banglalink is making investment in data networks to improve its 3G network coverage and availability. The 3G network covered 69 percent of the population at the end of Q3 2017.


VEON said revenue growth of 6.9 percent was supported by growth in mobile data revenue which grew 38.9 percent after the 3G network expansion.