What happened

Shares of VEON (VEON 0.35%) fell today, down by 8% at the close, after the company reported second-quarter earnings. The financial results were impacted by the COVID-19 pandemic, even as consumers relied more on the its telecommunications services.

So what

Revenue in the second quarter declined 16% to $1.9 billion, which resulted in a net profit of $175 million, or $0.09 per share. On a local currency basis, revenue only fell by 7%. VEON said that its operations were adversely affected by store closures and the loss of roaming and migrant customer service revenues, as well as lower equipment sales.

Red stock chart going down with red numbers in the background

Image source: Getty Images.

"The second quarter of 2020 saw the full impact of the COVID-19 pandemic on activity across our operating markets," co-CEOs Kaan Terzioglu and Sergi Herrero said in a statement. "National and local lockdowns deepened the reliance of our customers on connectivity services as the challenges of physical isolation intensified."

Now what

The European telecommunications provider is working to reduce costs in order to mitigate the impact of declining sales. VEON also recently refinanced some debt in order to reduce its average cost of debt to approximately 6.4%.

VEON is reintroducing financial guidance for 2020, a few months after suspending its outlook in May. Revenue for the year is expected to decline by "a low to mid-single-digit" percentage on a local currency basis. The outlook assumes that lockdown measures will continue to gradually lift across the markets where the company operates. VEON also expects to face challenging conditions in Russia in the third quarter.