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Key points:
- Eagers Automotive, an Australian automotive retailer, has experienced a cyber security incident that is impacting its ability to finalize transactions for certain new vehicles.
- The operational impact of the cyber incident varies across regions and business units in Australia and New Zealand.
- The financial impact for fiscal 2023 primarily relates to the deferral in the recognition of these transactions, but it is not expected to be material.
- Eagers Automotive remains confident that it will deliver record underlying operating profit before tax for the 2023 financial year.
Australia’s Eagers Automotive has faced operational hurdles after a cyber security incident impacted some of its IT systems. The incident has resulted in difficulties finalizing transactions for certain new vehicles that have been sold and are ready for delivery. The extent of the operational impact varies across different regions and business units in Australia and New Zealand. The financial impact primarily relates to the deferral in the recognition of these transactions across the last five days of December. However, Eagers Automotive does not expect the impact to be material.
Eagers Automotive has stated that the deferred transactions are expected to be recognized in the 2024 financial year once they have been appropriately finalized within their systems. Despite the cyber incident and its operational challenges, the company remains confident that it will deliver a record underlying operating profit before tax for the 2023 financial year.
This incident highlights the increasing threat of cyber security breaches in corporate Australia. The country has experienced a significant rise in cyber security incidents over the past year, prompting the government to implement reforms to strengthen cyber security rules. In February, Australia established an agency to oversee government investment and coordinate responses to hacker attacks.
As cyber threats continue to evolve and become more sophisticated, organizations must prioritize cyber security measures to protect their IT systems and operations. The Eagers Automotive incident serves as a reminder that even well-established companies can be vulnerable to cyber attacks. Businesses should invest in robust cyber security frameworks and regularly update their systems to mitigate the risk of breaches.
Overall, Eagers Automotive is working to address the operational challenges caused by the cyber security incident and aims to minimize the impact on its financial performance. The company’s confidence in delivering a record operating profit indicates its commitment to recovering from the incident and continuing to grow its business in the automotive industry.
