STOCKHOLM – Swedish furniture giant Ikea saw a fivefold increase in net profit for its financial year ended August 2023, boosted by rising sales, Ingka Group, which owns most Ikea franchises, said on Nov 29.

Ingka’s net profit was €1.5 billion (S$2.2 billion) for the year, up from €300 million in 2022, when earnings were hit by its pull-out from the Russian market over the war in Ukraine.

Ingka called it a “good performance”, despite the fact that “economic instability, geopolitical volatility and the continued after-effects of the pandemic made for challenging moments in 2023”.

Operating profit was stable, while Ingka’s sales rose by 5.4 per cent to €44.3 billion.

Ingka accounts for more than 90 per cent of Ikea’s sales, which totalled €47.6 billion in 2023.

The retailer announced in October that it had begun lowering its prices on thousands of items in September to stem two years of falling sales volumes attributed to soaring inflation.

Ingka said on Nov 29 that it would pay out €311 million in performance-based bonuses to its employees and €103 million to its complementary pension fund for employees with more than five years of seniority.

The company said it was committed to further reducing the staff turnover rate, which rose during the Covid-19 pandemic.

“We had a 21.4 per cent staff turnover rate before, and now we’re down to approximately 18 per cent,” said head of human resources Ulrika Biesert. AFP