[BreachExchange] Norsk Hydro’s Core Profit Plunges 82% After March Cyber Attack, Brazilian Spill

[Destry Winant]

https://www.insurancejournal.com/news/international/2019/06/05/528434.htm

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.