Latitude Group forecasts steep drop in earnings on cyber attack impact

(Reuters) – Australia’s Latitude Group on Friday forecast a steep fall in fiscal 2023 earnings due to higher credit losses and provisions for costs associated with a recent cyber attack.

The consumer finance firm expects cash net profit after tax (NPAT) in the range of A$5 million to A$10 million ($3.39 million – $6.78 million) for the half year to June 30, compared with a cash NPAT of A$93 million in the year-earlier period.

It also expects a statutory loss after tax from continuing operations in the range of A$95 million to A$105 million for the half year, compared to a profit of A$30.6 million a year ago.

Latitude Group, a provider of credit cards and personal loans for some of Australia’s biggest retailers, said in March hackers stole nearly 8 million Australian and New Zealand drivers’ licence numbers.

New account originations and collections were closed or severely restricted for nearly five weeks as the group responded to the cyber attack.

“Latitude had anticipated some normalisation in loss ratios across its portfolio, however the cyber-attack has materially worsened this trend due to lost collections activity,” the group said in a statement.

For the full year, cash NPAT is likely to be in the range of A$15 million to A$25 million, with statutory result expected to be a loss.

The company said it is unlikely that it will declare a dividend for the six months.

($1 = 1.4743 Australian dollars)