Jaguar Land Rover posts heavy loss after cyber-attack

Jaguar Land Rover has reported a heavy loss for the three months to the end of September, a period during which it was badly affected by the impact of a serious cyber-attack.

The carmaker posted a £485m loss – before tax and exceptional items – compared with a profit of £398m for the same period a year ago.

The cyber-attack, which took place at the end of August, forced JLR to shut down its computer networks, leaving it unable to operate its highly-automated production lines throughout September and into early October.

Car sales to consumers were also affected initially, although JLR was later able to develop workarounds, and parts supply to service outlets was badly disrupted.

The company says production has now returned to normal levels.

JLR also reported additional “cyber related costs” of £196m, on top of the headline loss. These are understood to include the expense of bringing in outside consultants and other support in response to the hacking attack.

According to the carmaker, its revenues for the quarter fell 24%, from £6.5bn last year to £4.9bn.

This was heavily affected by the production stoppage. However, US tariffs on cars exported from both the UK and Slovakia also had an impact, as did the phasing out of a number of Jaguar models ahead of the brands planned re-launch as an all-electric marque.

The crisis at JLR helped drive UK car production in September to its lowest level for the month since 1952, according to the Society of Motor Manufacturers and Traders.

Its impact was also felt well beyond JLR itself. According to the Office for National Statistics, the drop in production of some 27,000 vehicles knocked 0.17% off economic output in September.

The company sits at the top of a large and complex supply chain involving thousands of businesses worldwide, including hundreds in the UK, many of whom are heavily reliant on orders from the carmaker.

The stoppage meant a large number of them, including small and medium sized businesses, were also forced to shut some or all of their operations – prompting warnings of potential bankruptcies.

The government agreed to provide guarantees for JLR to obtain loans worth up to £1.5bn in order to help its supply chain. However, the company says it has yet to draw on this funding.

Separately, the carmaker itself set up a financing scheme funded by a separate loan, allowing suppliers to obtain early payment for new orders, in order to ease their cashflow.

JLR’s chief executive Adrian Mardell described the cyber-attack and subsequent shutdown as an “incredibly difficult period” but said operations were continuing to “recover at pace”.

He added the company was now “back to doing what we do best – producing luxury British cars”.

The company’s chief financial officer Richard Molyneux said operations were “pretty much back running as normal” with all plants up and running and at, or approaching, capacity.

He added it was “interesting to hear” the impact the cyber-attack had had on growth.

“It reinforces that JLR is a really important part of the UK economy”, he said.