The cost of the incident is now estimated to be $60m. Ouch!…:
Aluminum producer Norsk Hydro, the victim of a cyber attack in March that paralyzed its IT systems, posted an 82% drop in first-quarter core profit on Wednesday and said a rise in global uncertainty could impact its markets.
The Norwegian company’s underlying operating result fell to 559 million Norwegian crowns ($64.3 million) from 3.15 billion crowns a year ago, while analysts in a Reuters poll on average had expected a profit of 123 million crowns.
The earnings report, originally scheduled for release on April 30, had been postponed by five weeks as Hydro struggled to restore systems for reporting, billing and invoicing after hackers penetrated its servers.
Newly appointed Chief Executive Officer Hilde Merete Aasheim recently announced initiatives to boost profitability and a review of one of the company’s units following 15 months of production outages.
While global aluminum demand is still expected to slightly outstrip production this year, declining prices and rising political uncertainty added more concerns for the industry, Hydro said on Wednesday.
In addition to the March hacking, which led Hydro to halt some production and switch several units to manual operation, the company was forced last year to curtail output from a key Brazilian plant following a spill.
Hydro recently said it had won permission from a court to resume normal output in Brazil, a move that will increase the supply of raw materials to its smelters and thus further aid its recovery.
“Due to current market uncertainty and industry-wide profitability challenge, we will lift our improvement ambitions, perform a strategic review of Rolled Products and ensure stricter financial discipline and higher earnings,” the CEO said, adding that Hydro planned to boost its cash generation.
Rolled Products is a division of Hydro that produces large aluminum sheets used in the automotive, construction and packaging industries, among others.
The cost of the hacking amounted to between 300 million crowns and 350 million crowns in the first quarter and will add a further 200 million crowns to 250 million crowns of cost in the second quarter, Hydro said.
The company’s IT recovery plan was progressing as scheduled, and will include a strengthening of its cyber security, it added.
Shares of Oslo-based Hydro are down 20% year-to-date.