(Adds comments on app performance, share jump, details)
AMSTERDAM, Feb 22 (Reuters) - Mobile telecommunications
company Veon said on Thursday fourth-quarter core
profit fell nearly 4 percent to $753 million, mainly due to the
devaluation of the Uzbek som, but a strong cash flow and
underlying sales growth boosted its shares.
Underlying earnings before interest, taxation, depreciation
and amortisation, excluding exceptional costs, decreased 6.9
percent, led by falls in Russia, Algeria and Bangladesh and
increased corporate costs, Veon said in a statement. Fourth
quarter sales fell 1.4 percent to $2.3 billion.
For the full year, Veon reported 1.9 percent organic revenue
growth and 7.5 percent higher EBITDA. Its free cash flow rose 31
percent year-on-year to $1.1 billion, significantly ahead of
guidance, it said. Shares jumped 6.8 percent to 3.16 euros
Amsterdam-based VEON has staked its future on a messaging
app of the same name, designed to compete with the likes of
Facebook Inc's WhatsApp and Rakuten Inc's Viber
by offering online services.
It plans to offer free services to its roughly 240 million
global customers via its mobile network without users incurring
additional data charges. It first launched the new platform
through its Italian joint venture with CK Hutchison
called Wind Tre.
Wind Tre’s revenue fell 11 percent to 1.6 billion euros in
the fourth quarter, driven by an 8.1 percent decline in mobile
service revenue, as competition saw its customer base fall 5.8
percent to 29.5 million, it said.
The company's flagship mobile app, which has been launched
in Italy, Russia, Ukraine, Georgia and Pakistan since November
2016, has been downloaded more than 8 million times, said head
of corporate communications, Mark MacGann.
Veon did not provide user numbers, but MacGann said the
product roll out "is on track". It has targeted reaching all
customers in 12 countries this year.
Veon, formerly known as Vimpelcom, said its 2018 performance
would continue to be hit by the Uzbek currency liberalization,
the sale of a telecommunications tower in Pakistan and the
unwinding of its Euroset joint venture in Russia.
"We expect flat-to-low single-digit organic growth for both
group revenue and EBITDA," it said.
($1 = 0.8140 euros)
(Reporting by Anthony Deutsch; editing by Muralikumar
Anantharaman and Jason Neely and Jon Boyle)
First Published: 2018-02-22 09:09:03
Updated 2018-02-22 12:17:29
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