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Technologies
15/09/2017
VEON says devaluation of Uzbek soum to hit its revues
VEON says devaluation of Uzbek soum to hit its revues
Tashkent, Uzbekistan (UzDaily.com) --
VEON Ltd. stated the recent announcements from the government of Uzbekistan, liberalizing the currency exchange rules and resetting the official exchange rate at 8,100 Uzbek soums per U.S. dollar, a devaluation of approximately 92%.
Under these liberalized exchange rules, VEON may in the longer term be able to more effectively repatriate cash from Uzbekistan. The cash balances held by Unitel, VEON’s Uzbek subsidiary, are now valued at approximately USD 350 million.
The new official exchange rate will directly impact the reported results for the VEON group for two reasons. Firstly, the Uzbek soums results of Unitel will now be translated into U.S. dollars at a higher exchange rate.
Secondly, Unitel and all other telecommunications operators will experience an erosion of EBITDA resulting from the fixing of tariffs from U.S. dollars to Uzbek soums at the prior official exchange rate. As a result, VEON expects annualized decreases in revenues of US$300-350 million and in underlying EBITDA of US$175-225 million.
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