STOCKHOLM: Inter Ikea Group, the company that operates the brand and franchise business of the Swedish furniture giant, reported a drop in annual profits on Wednesday, weighed down by higher material and transport costs. The company's net profit for its full year accounting period - running from September 2020 to August 2021 - fell 17 percent to 1.4 billion euros ($1.6 billion).
Operating profit was also down 17 percent, at 1.7 billion euros, mainly driven by higher costs related to the Covid-19 pandemic, the company said.
"The biggest cause was the steep increase in transport and raw material prices in the second half of the financial year," Inter Ikea said in a statement.
Container transport prices are at record levels following the outbreak of the pandemic, which has disrupted maritime logistics. At the same time, the brand's best-sellers, such as its Pax wardrobes and Billy bookcases, have been particularly affected by the ongoing freight and supply turmoil. Ikea warned in October that supply issues would plague its business well into 2022.
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