VF Ukraine

Fitch Ratings lowered its Long-Term Foreign Currency Issuer Default Rating (IDR) and senior unsecured rating on Vodafone Ukraine (VFU) by one notch, from CCC to CCC-. The downgrade reflects Fitch expectations that VFU would not have sufficient liquidity in its foreign accounts to service upcoming coupon payments, as it has already been utilized to meet 2023 obligations and the company’s ability to accumulate F/X offshore remains limited amid declining roaming revenues. In turn, using local UAH liquidity for debt service will remain restricted by an NBU ban on cross-border F/X payments, according to Fitch. The agency also highlights high refinancing risk for the outstanding $400m Eurobond maturing in February 2025.

Vodafone Ukraine (VFU), Ukraine’s second largest mobile operator, reported 1H23 revenues of $285m (-17% y-o-y), EBITDA of $162m (-19% y-o-y) and net income of $62m (+170% y-o-y). The EBITDA margin declined by 1.1pp y-o-y to 57.0% while the net margin grew by 15.1pp y-o-y to 21.8%.