VF Ukraine

Vodafone Ukraine (VFU), Ukraine’s second largest mobile operator, reported 1Q23 revenues of $140m (flat q-o-q and -23% y-o-y), EBITDA of $78m (-2.1% q-o-q and -24% y-o-y) and net income of $28m (-40% q-o-q but +57% y-o-y). The EBITDA margin declined by 1.2pp q-o-q to 55.8%, with the net margin falling by 13.4pp q-o-q to 20.3% (yet +10% y-o-y).

S&P Global Ratings affirmed its rating on Vodafone Ukraine (VFU), Ukraine’s second largest mobile operator, at CCC+, with a stable outlook. S&P thus rated VFU one notch above the sovereign, arguing that the company passes a hypothetical sovereign default stress test, benefiting from sufficient cash reserves to service its debt obligations in the next 12 months. The stable rating outlook reflected S&P’s view that VFU will likely maintain its ability to exchange local currency for foreign currency and carry out cross-border debt service payments even if the sovereign were to restructure its F/X debt. S&P assessed VFU’s liquidity as adequate based on positive cash flow, a large share of F/X cash (55% USD and 12% EUR as of end-2022, or $183m total), and no debt maturities until 2025.