FedEx Corp. expects to see a substantial financial impact after a Dutch subsidiary was hit hard by a massive global cyberattack last month.
The parcel delivery giant indicated in a filing with U.S. Securities and Exchange Commission that the virus known as "Petya" resulted in decreased volumes — and revenue losses — at TNT Express, and that the company would also incur additional incremental costs.
"Given the recent timing and magnitude ... we are still evaluating the financial impact of the attack, but it is likely that it will be material," the company said in a statement. "We do not have cyber or other insurance in place that covers this attack."
FedEx said that the remainder of its systems were not affected, but TNT, which the company acquired last spring, operates in the Ukraine and was exposed to the virus through its use of a tax software product in that country.
Although the company did not suffer a data breach or data loss, the encryption of its data affected its communications and operations. Customers are still experiencing service and invoicing delays some three weeks later, and the company continues to restore select operations, finance, back-office and secondary business systems.
"We cannot yet estimate how long it will take to restore the systems that were impacted, and it is reasonably possible that TNT will be unable to fully restore all of the affected systems and recover all of the critical business data that was encrypted by the virus," the company conceded.
FedEx affirmed its goal to bolster operating income "by $1.2 billion to $1.5 billion" from 2017 to fiscal year 2020.
