Latitude Group has cut its profit guidance for the half year and full year and has scrapped its interim dividend, after lost income and higher credit losses in the aftermath of a cyberattack on the company in March.
The company said an anticipated increase in credit provisions to 4.20 per cent would result in a cash net profit after tax (NPAT) in the range of $5 million to $10 million for the half year.
“While Latitude was able to continue processing transactions as it responded to the March cyberattack, new account originations and collections were closed or severely restricted for a period of approximately five weeks,” Latitude said in a statement.
“Latitude had anticipated some normalisation in loss ratios across its portfolio, however the cyberattack has materially worsened this trend due to lost collections activity.”
For the full year, it said cash NPAT would be “adversely impacted” by the reduced first half earnings, the flow-on impact of a lower receivables base, and temporary impact on collections.
Cash NPAT is now likely to be in the range of $15 million to $25 million. In addition, following an extensive review, Latitude said it would also make a provision for costs associated with the cyber incident.
The company said the board anticipated it would recognise about $53 million after tax in 1H23, which included both costs incurred and a provision of $46 million after tax.
On a statutory basis, the company said it expected to post a first half loss after tax from continuing operations in the range of $95 million to $105 million, with the full year statutory result also expected to be a loss.
Due to the forecast statutory after-tax loss, it said it was also unlikely that Latitude would declare a dividend for the six months to June 30.
