Kaan Terzioglu: Well, I will also ask Joop to chip in on this one, but for 2025 bonds, we believe that we are on track for normal maturity of those bonds. Any comments you would like to add?
Joop Brakenhoff: I think what is important that VEON got a credit rating back and is now putting in place all the building blocks to address those maturities as we near those maturities which to voice it out are more than a year wasted.
Kaan Terzioglu: Thank you.
Faisal Ghori: There’s another question. Can we just comment about in greater detail about which subsidiaries are you able to upstream?
Kaan Terzioglu: We do not have it currently except for Ukraine, which is under martial law, any subsidy with limitations of upstreaming.
Faisal Ghori: Could you comment more about your engagement in Ukraine?
Kaan Terzioglu: Sure. Ukraine is actually — our team in Ukraine is doing a heroic job in terms of keeping our network up and running. As I mentioned to you, not only that we are deploying new sites, we are multiple times deploying the same sites again and again to keep the network connected. In the meantime, we do have a very functional open dialogue with the Ukrainian authorities to make sure that this service levels and support for the country continues.
Faisal Ghori: Another question from the chat is, can you comment regarding your views on kind of FX and FX risk going forward?
Kaan Terzioglu: Look, if I look to last four years, we had the era of COVID and later war. And, if I look back also in the last two years, one of the biggest, I think, impact that emerging markets have experienced was increase of the interest rates from almost 0 to 5.25%. This is a financial equivalent of a nuclear bomb in emerging markets. I’m very happy to see that with regard to this type of a turbulence, despite the fact that we had significant devaluations, our US dollar reported numbers were only down 2%, actually 1.5%. I do expect that in the next era, the stabilization on the interest rates and potentially moderation of the interest expenses. And this is probably be an era of more stability in the emerging markets economies.
Faisal Ghori: The next question also comes from Stella Cridge. Can you comment about your kind of auditor situation and kind of its resolution?
Kaan Terzioglu: Yeah. Joop, I’ll pass it to you.
Joop Brakenhoff: Thanks, Kaan. After the sale of the Russia operations in October 2023, it was clear that the market really opened for ourselves. We’ve seen that analysts are supporting us, we’ve seen the rating agencies stepped in again, and also our discussions with the auditors started again. As a result, we have engaged with the auditor for 2023, but of course late in the process. And therefore also our filing will be late, but the auditor has started, so it’s positive news.
Faisal Ghori: The next question comes from Michele Fiumara from Helikon. Can you provide guidance on HQ costs in 2024 and beyond?
Kaan Terzioglu: Hi, Michele, thanks for the question. Actually in 2023, we made a massive reorganization at the HQ, which allowed us to save almost 55% of our run rate. Now we have reduced it to the level of $75 million a year. And I do expect that optimization of our cost, of course, will continue as we normalize our operations. But HQ has contributed a lot to this year’s margin expansion and we have completed this successful transformation last year.
Faisal Ghori: The next question is also from Stella Cridge from Barclays. What are the sovereign bonds that you refer to in the presentation? What country do they relate to? Is $150 million nominal value or market value?
Kaan Terzioglu: We do keep some of our cash balances in Ukraine in US denominated sovereign funds. And I think we are referring to that amount.
Faisal Ghori: Can you comment regarding JazzCash in Pakistan in terms of revenue and asset size to the company?
Kaan Terzioglu: Of course, JazzCash is a private entity within our operation. But if I look to its run rate growth, we have almost $100 million of revenue run rate. It is EBITDA positive, cashflow positive, and growing almost at 82% year-on-year with a very healthy unit economic cost. I believe this is going to be one of the driving factors of our business growth in Pakistan. If I look to overall Pakistan operations, almost 15% of our revenues today are generated through non-telecom assets and a massive portion of that comes from JazzCash and Mobilink banking financial services.
Faisal Ghori: The next question is from Rahul Shah. Now that you have a bond rating, will you be looking to extend your debt maturity profile?
Kaan Terzioglu: We are looking for expanding our debt maturity profile, but my number one priority of achieving this is actually through the tower sales in local markets with long-term lease contracts other than anything else. That will allow us to basically de-leverage the company at the headquarters, get rid of hard currency debt, and turn it into local currency long-term lease commitments.
Faisal Ghori: The next question is also from Michele. Any relevant license payments do you expect in 2024 and beyond?
Kaan Terzioglu: There is no renewals coming up except for a renewal in Kyrgyzstan which is immaterial in total picture.
