Demant, a hearing aid company, has revealed that it is expected to incur losses of up to $95 million, following a ransomware attack.
In a company announcement, on September 3, the company had experienced a critical incident on their internal IT Infrastructure. Subsequently, Demant said it had shut down all IT systems.
The company did not reveal what really happened, but rather stated that its “IT infrastructure was hit by cyber-crime.” However, reports have emerged that the incident may be due to a ransomware attack.
Demant stated that key business processes throughout the value chain was impacted by the incident, including R&D, distribution and production. Fortunately by shutting down the IT systems, data back-up was overall intact, thus enabling the company to recover in a “structured and efficient way while further improving security in the Group’s IT infrastructure.”
The company stressed that it expects to have the all business-critical systems, applications and servers to be running and recovered within the next two or three weeks.
“We continue ramping up to accommodate the back-log built up since the incident, to rebuild necessary inventories across the supply chain and to reduce turnaround times of repair and custom-made hearing aids. We are still in the recovery and ramp-up phase at our amplifier production site in Denmark and at our cochlear implants production site in France.”
In the announcement, the company stated that is was able to assess the financial impact of the incident, and it was found that the total negative financial impact on the firm ranged from DKK 550-560m ($80-95m). This figure also includes a deduction of DKK 100 ($15m) from insurance coverage.
Furthermore, it is estimated that the company will incur costs of DKK 50m ($7m) due to a direct result of the incident.
“The incident has prevented us from executing our ambitious growth activities in some of the most important months of the year – particularly in the US, which is our biggest market.
“Despite our efforts to operate the business in the best possible way, our immediate focus on supporting existing customers to prevent them from being impacted by the incident has impacted sales and will likely impact our organic growth rate throughout the rest of the year.”
Søren Nielsen, President & CEO of Demant commented: “We are grateful for the patience and loyalty shown, and the Demant organisation will continue to approach the incident with extreme dedication until we are completely recovered and have re-established what was severely disrupted by the incident.”
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