Saturday, 21 October 2017

Veon names new CFO, warns of earnings hit in Uzbekistan

By Mary Lennighan, Total Telecom
Friday 15 September 17

Telco group says revenues, EBITDA will be hurt by Uzbekistan currency devaluation, alters guidance; announces arrival of Trond Westlie

Veon on Friday revealed that it will welcome a new CFO later this year in Trond Westlie, a former Telenor finance chief, and warned that Uzbekistan's recent decision to devalue its currency will have a negative impact on its revenues and earnings in the country to the tune of hundreds of millions of dollars…

Veon on Friday revealed that it will welcome a new CFO later this year in Trond Westlie, a former Telenor finance chief, and warned that Uzbekistan's recent decision to devalue its currency will have a negative impact on its revenues and earnings in the country to the tune of hundreds of millions of dollars.

Westlie will take up his new position on 9 November, after the telco's Q3 results announcement, Veon, formerly known as VimpelCom, said.

He brings significant experience with him. Westlie most recently served as CFO of Danish transport and logistics conglomerate AP Moller-Maersk, a position he held between 2010 and 2016. He was also group CFO at Telenor from 2005 to 2009 and has previously sat on the Veon board and chaired its audit committee.

The new CFO "will contribute significantly to the company's transformation, in particular around our digital and cashflow growth initiatives," said Veon CEO Jean-Yves Charlier.

Westlie replaces Andrew Davies, who is leaving the company after four years.

"He has made a major contribution to ensuring Veon is where it is today – a revitalised business that is generating strong free cash flow with a stable and appropriate capital structure, an endeavour which enabled the board to announce a new dividend policy earlier this year," Charlier said.

Veon also noted that Davies played a leading role in the merger of its Wind unit with 3 in Italy late last year, and in the February 2016 settlement with Dutch and U.S. authorities investigating corruption in Uzbekistan.

In a related announcement, Veon noted that Uzbekistan recently devalued its currency by around 92%, a move that will naturally affect its operations there.

It warned that it expects annualised decreases in revenues of US$300 million-$350 million and underlying EBITDA of $175 million-$225 million

Based on 2016 numbers, when Veon posted revenues of $9 billion and underlying EBITDA of $3.6 billion, the declines represent an impact of 3.5% and 5.5% respectively, the telco said.

Veon said its 2017 guidance of low single-digit organic revenue growth, but has changed its expectations for EBITDA margin and free cash flow. It now forecasts flat to low single-digit organic EBITDA margin growth, having previously aimed for low single-digit growth, and underlying equity free cash flow – excluding spectrum fees – of $850 million-$950 million, down from its previous $900 million-$1 billion target.

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