Kyivstar reports growth of revenue and profits

26 November 2023

Currently, Kyivstar is the most profitable business of the Veon Holding owned by Mikhail Fridman and partners.

The revenue of the largest Ukrainian mobile operator for the first nine months of 2023 amounted to UAH 25.7 billion.

According to the trading report of Veon Holding - the parent company of Kyivstar, the main owners of which are the businessman under sanctions in Ukraine Mikhail Fridman and his partners - in the third quarter of 2023 the total number of subscribers of the company has been stable compared to previous reporting periods and amounted to 24.1 million people.

Kyivstar's revenue in the reporting quarter increased by 14% y-o-y and amounted to UAH 8.7 billion. In general, for the first nine months of 2023, Kyivstar's turnover amounted to UAH 25.7 billion, +12% y-o-y.

EBITDA of the company for January-September increased compared to the last year by 12.5% to UAH 15.5 billion (and in the third quarter, EBITDA increased vs. Q3 2022 by 26%).

It is interesting that the profitability of Kyivstar's operations in Ukraine is higher compared to other countries that occupy a relatively large share in the overall business of the Veon group (Pakistan, Kazakhstan, Bangladesh and Uzbekistan).

Kyivstar's EBITDA margin for the first nine months of the current year is 60%, compared to a 55% margin in Kazakhstan and less than 50% in other countries where the Friedman & Co group is represented.

Capex investments in Ukraine during 2023 as of the reporting date amounted to UAH 3.4 billion.

Since Kyivstar cannot pay dividends to its shareholders, we expect a significant increase in the amount of cash on the company's balance sheet. As of December 31, 2022, it amounted to more than UAH 4 billion, by the end of 2023 it may amount to UAH 12-15 billion.

As a reminder despite the full-scale Russian invasion, in 2022, Kyivstar increased its turnover compared to the previous year by 8.2% to UAH 31 billion (in dollar terms, turnover decreased by 8%).

On October 9, the owner of Kyivstar - the company Veon - announced that it closed the sale of its Russia operations – company VilpelCom – to a group of management of this legal entity. The transaction does not provide for any buy-back arrangements, so it means (basing on Veon statement) complete exit of the group from Russian market.