Kyivstar completes preliminary assessment of the financial impact of the cyberattack

Via Veon

Jan 19, 2024

Amsterdam and Kyiv – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services (“the Company”), announces its preliminary assessment of the financial impact of the cybersecurity incident that affected the network and services of its Ukrainian subsidiary Kyivstar in December 2023. 

The incident, which was caused by a widespread external cyberattack, resulted in a temporary disruption of Kyivstar's network and services, interrupting the provision of voice and data connectivity on mobile and fixed networks, international roaming, and SMS services, amongst others, for Kyivstar customers in Ukraine and abroad. Working relentlessly, and in collaboration with the Ukrainian law enforcement agencies, the Security Service of Ukraine and government agencies, Kyivstar restored services in multiple stages starting with voice and data connectivity. After stabilizing the network, Kyivstar immediately launched offers to thank its customers for their loyalty, including one month of free services on certain types of contracts. 

VEON and Kyivstar also engaged in a financial impact assessment, the preliminary results of which have become available. 

Largely because of the limited period during which the critical services were down, VEON expects no material financial impact on its consolidated results for the year ended 31 December 2023 due to these service disruptions, or due to costs associated with additional IT capabilities required for restoring services, replacing lost equipment, or compensating external consultants and partners in 2023. 

However, the Company does anticipate that there will be an impact on its consolidated revenue results for the year ending 31 December 2024 associated with the revenue loss arising from the customer loyalty measures taken by Kyivstar in order to compensate for the inconvenience caused during the disruptions. The revenue impact of these offers is currently estimated to be approximately 3.6 billion UAH (approximately 95 million USD). 

Kyivstar plans to continue its remediation and compensation efforts in the coming months. The costs or loss of revenue of any other such remediation measures is uncertain and cannot be reasonably estimated at this time. 

VEON and Kyivstar would once again like to thank their customers for the support and loyalty demonstrated during and in the aftermath of the cyberattack; and to their industry partners and Ukrainian authorities for their support in the recovery of the services. 

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