Europe, Finance, Generators and Electrical Components

Norsk Hydro says financial impact of cyber attack is already US$35 million

Norsk Hydro reports that, as of today, it has “made further progress toward returning operations back [to] normal” in the wake of the March 19 cyber attack. The company says four out of five business areas – including energy — are running production at normal capacity, but with manual workarounds. In the most affected business area, Extruded Solutions, production is now gradually ramping up in all business units.

“Since yesterday, we have been able to start production again in Building Systems. It is still unclear how long it will take before we are fully back to normal, but we will gradually ramp up deliveries to Building Systems customers over the coming days,” says Executive Vice President of Extruded Solutions Egil Hogna.

As of Wednesday morning, Building Systems units were on average producing at around 20% capacity, while the total production output in Extruded Solutions was around 70% to 80%.

According to Chief Financial Officer Eivind Kallevik, Norsk Hydro’s global IT organization is working continuously to resolve the situation together with top external expertise. “The most important thing for us now, is that we restart operations in a safe and secure manner, gradually progressing towards normal business. We are doing our utmost to limit any further impact on our customers, suppliers and other partners” says Kallevik.

Norsk Hydro says production is running as normal in its energy business area.

The company says it is one of the top three largest operators of power production in Norway, with more than 100 years of experience in hydropower. Norsk Hydro operates more than 20 hydropower facilities throughout Norway with total annual production of 10 TWh, for its aluminum production. The company built its first hydroelectric power plant, at Svelgfoss, to provide energy for its first potassium nitrate plant.

Yesterday, Norsk Hydro said it estimated the preliminary financial impact for the first full week after the cyber attack is about NOK 300 million to NOK 350 million (US$34.8 million to $40.6 million), with the majority stemming from lost margins and volumes in the Extruded Solutions business area.

The company reports it has a “solid cyber risk insurance policy with recognized insurers, with global insurer AIG as lead.”