The holding company that groups most of the Ikea stores in the world, Ingka Group, announced this Friday a drop in its annual net profit, weighed down by the fall in the value of its financial investments and its withdrawal from Russia.
At the beginning of November, the holding company of the giant of Swedish origin, Inter Ikea, had also announced a sharp drop in its profits due to the impact of inflation and the withdrawal from the Russian market caused by the invasion of Ukraine. In its 2022 fiscal year (September 2021 to August 2022), Ingka saw its net profit divided by five, to €287 million.
This fall is due “mainly to the significant impact of the rise in interest rates on our investments in the financial markets (…) and the effects of cutbacks in activity in Russia,” the group explains in a press release. Operating profit, which does not include this financial loss, rose 8% to €2 billion. The turnover, already published, shows an increase of almost 6%, due in particular to the rise in prices, to 42.0 billion.
“A difficult year”
Ingka represents more than 90% of Ikea’s total turnover, which reached 44.6 billion euros in the 2022 financial year. Last month, the head of Inter Ikea had described the year to AFP as “a difficult year” with a “non-increasing” sales volume. “. For its 2022 financial year, Inter Ikea saw its profits halved, to 710 million euros, due to the global inflationary wave and the impact of Russia’s withdrawal, according to its results published at the beginning of November Ikea, which had suspended its activities in Russia and Belarus in early March after the invasion of Ukraine, then began a complete withdrawal of its activities in the two countries.
More than 10,000 of the 15,000 employees of the world’s largest furniture company have already been laid off in Russia after the closure of 17 stores and three factories, according to Ingka. The group also estimated that it represented 50,000 indirect jobs in Russia and 10,000 in Belarus, through its subcontractors.
Ikea is one of the leading Western groups in Russia and the Russian market accounted for about 4-5% of the group’s total sales before the war in Ukraine. With its complex structure with main holding companies based in the Netherlands and 230,000 strong employees, Ikea is not listed on the stock exchange and is therefore not subject to the publication of its results. Regularly accused of a lack of financial transparency and of resorting to great tax optimization, the group founded in 1943 in Sweden began publishing annual results since 2010.
Source: BFM TV
