VEON Ltd. Q2 FY2025 earnings call

Financial Performance

• Revenues up 5.9% year-on-year in U.S. dollars. EBITDA in U.S. dollar terms grew by 13.2% year-on-year. First half U.S. dollar revenues grew by 7.3% year-on-year, and U.S. dollar EBITDA grew 13.4% year-on-year. Local currency revenues grew 11.2% in Q2, EBITDA grew 19.6%.

Digital Services

• Direct digital revenues grew by 57% year-on-year in dollar terms and now contribute 16.5% of total group revenues. Uklon was consolidated effective April 2025. Accelerating integration of agentic AI-powered features across platforms.

Asset-Light Strategy

• Closed strategic infrastructure pooling partnership with Engro in Pakistan. Kyivstar to launch direct-to-cell satellite communications in Q4. Completed $100 million share buyback program. Repaid bond maturities and issued $200 million private bond. Progress on Kyivstar's NASDAQ listing.

Transactions

• Upcoming Kyivstar listing in NASDAQ through business combination and sale of Kyrgyzstan operations expected to result in a noncash charge in the range of $150 million to $200 million likely recognized in Q3.

Telecom and infrastructure segment: Like-for-like revenues grew 2% in U.S. dollars and 7.4% in local currency terms. Direct digital revenues reached $180 million in the second quarter, growing 56.6% year-on-year in U.S. dollars and 62.4% in local currency, now representing 16.5% of total revenue. Uklon contributed $21.7 million in revenue and $9.3 million in EBITDA for the quarter. Multiplay customers generated 54.4% of total revenues in the second quarter, and this number grew 26.8% year-on-year in local currency terms.

2025 Outlook

• Revises local currency growth for total revenue between 13% to 15% year-on-year and EBITDA growth between 14% to 16%.
• Capital intensity excluding Ukraine in the 17% to 19% range, based on a blended weighted average inflation rate of 8.2%.

Risks

• Accounting effects from transactions like Kyivstar listing and Kyrgyzstan ops sale may result in noncash charges. Macroeconomic and geopolitical volatility could impact performance.

Q: Unidentified Analyst asked about Uklon's growth and expansion plans.

A: Anand Ramachandran and Muhterem Kaan Terzioglu discussed Uklon's current performance and potential for growth through combining capabilities with super apps.

Q: Christopher Hoare asked about Kazakhstan's EBITDA and shareholder remuneration strategy.

A: Muhterem Kaan Terzioglu and Burak Ozer explained the tax impact on Kazakhstan and the plan to discuss shareholder remuneration in Q3.

Q: Theodore O'Neill asked about organic vs. inorganic growth in digital services.

A: Muhterem Kaan Terzioglu stated that digital growth is partly organic with Uklon contributing inorganically, and there are potential acquisitions in the pipeline.