Kaspersky Labs Limited, the principal legal entity of the Kaspersky Lab group of companies, recognized the impairment of goodwill (intangible assets of the company, including business prospects, business reputation, etc.) from acquisition of subsidiaries in the US by $ 3 million, up to $ 7 million. this is stated in the company's report on IFRS for 2017, published on August 23.
"As a result of the negative news background in the US, the group revised its forecasts for the local market and reflected a decrease in goodwill," the document says. Other factors that reduce goodwill are high competition in the US market, as well as "geopolitical pressure."
Kaspersky Labs entered the US market in 2011. Now the company has two "daughters" in this country: Kaspersky Lab Inc. and Threatpost Inc (until 2016 was called Kaspersky Government Security Solutions).
During 2017, the US published several publications about the group, which stated that its products could be used to spy on the authorities of the country, the report says. Following this, the US Department of Homeland Security (DHS) banned the use of Kaspersky Labs products in federal agencies. Then, US President Donald Trump signed a law that prohibits all civil and military agencies from using the company's software. "The actions of DHS and the law have caused damage to the reputation of the group in the IT security industry, as well as a decline in sales in the US," the report said.
In response, the company filed two lawsuits in US courts demanding the repeal of the DHS directive and the law. In the claims, Kaspersky Lab announced a drop in sales in the third quarter of 2017 due to the actions of the US government. The company said that in 2016, the United States accounted for about a quarter of all sales in the world. Investments in promotion in this market over 12 years exceeded $ 500 million, of which more than $ 65 million fell in 2016. However, on sales to US government agencies, the company earned only $ 54 thousand in 2016. Both claims were reviewed in 2018, the company's claims were not satisfied.
In June this year the deputies of the European Parliament passed a resolution on cyber defense with a majority vote. The document stressed that "Russia, China and North Korea committed malicious cyber attacks on critical infrastructure in the EU, engaged in cyber espionage and mass surveillance of EU citizens, as well as campaigns to misinform and restrict Internet access (for example, Wannacry, NonPetya)" . The resolution called on European institutions to reconsider the approach to choosing software, as well as IT and communications equipment. Such a measure should exclude the use of potentially dangerous programs and devices, and also introduce a ban on those whose harmfulness was confirmed. As an example of malware, the resolution mentioned Kaspersky Lab's software. In response, the company's founder, Eugene Kaspersky, froze cooperation with European law enforcement agencies, including Europol.
"The revaluation of goodwill means that the company recognizes that it has overpaid for the once acquired asset and now its market value is lower. Perhaps this is due to the fact that the real effect that the business received from the acquisition of the "daughter" was lower than expected, "explained Sergei Libin, senior analyst at Raiffeisenbank, adding that the decrease in goodwill adversely affects the company's net profit. At the same time, Libin made a reservation that this indicator does not affect real cash flows and does not reflect an assessment of the company's business from a financial point of view.
As a result of 2017, Kaspersky Labs sales grew by 6% compared to 2016, to $ 711 million (excluding the impact of the dollar, the growth was 3%). In its report, Kaspersky Labs emphasizes that the main revenue is brought to it by end users, rather than government agencies. The company's EBITDA decreased by 17% to $ 129 million: the indicator was affected by a 22% increase in research and development expenses, to $ 141 million, and a $ 49 million increase in the amount of intra-group debt due to fluctuations in the dollar rate, the document explains. The same factors led to the fact that in 2017 the company received a net loss of $ 16 million against net profit of $ 91 million in 2016. Kaspersky Labs has not been unprofitable since 2006 (when its net loss was $ 8.05 million), follows from the company's documents.
At the same time, in 2017, Kaspersky Labs resumed paying dividends, sending shareholders $ 8.5 million. The last time Kaspersky Labs paid dividends in 2014, then they amounted to $ 10 million.
Who owns Kaspersky Lab?
As of July 2018, 83% of Kaspersky Labs belonged to the founder and CEO of Kaspersky Lab Evgeny Kaspersky, another founder and adviser for corporate governance of the company Alexei De Monderik - 10%, Vadim Bogdanov (also co-founder) - 7%, less than 1 % of shares from the Australian registrar Computershare.