Ikea forecasts ‘flat’ profits for 2010

In a rare comment on Swedish furniture giant Ikea's financials Monday, the firm's CEO reported flat profits for 2009 with more of the same forecast for 2010.

“We do not usually reveal our profits, but I can say that the profit earned over the last accounting year was about at the same level as the previous year,” Ikea CEO Mikael Ohlsson told Swedish daily Dagens Industri (DI).

Ohlsson did not provide a figure, but according to a DI estimate, the Swedish furniture giant’s profit was over 50 billion kronor ($6.9 billion dollars) in 2009.

“It looks like it will be about as good this year,” he told the paper.

Ikea is an unlisted, family-owned company and does not release regular earnings reports.

But in a statement published last September, the company said its sales for the period from September 1st 2008 to August 31st 2009 were up by 1.4 percent to 21.5 billion euros ($30.1 billion).

In June 2009, Mikael Ohlsson’s predecessor Anders Dahlvig said Ikea had slashed 5,000 jobs to cope with the drop in demand brought about by the global economic crisis.

“Strong cost controls are an important factor” Ohlsson told DI when asked to explain the stable profits.

He also said the company’s results in Russia, where it faces corruption allegations, were below expectations.

“It admittedly has not gone as well as we hoped for, but its crystal clear we are continuing in Russia,” he said.

Ikea said last week it had fired two top managers over a bribery affair in the country.

“There is in fact no proof that the bribes have been paid,” Ohlsson said, admitting however the affair would damage the brand’s image in Russia in the short run.

Ikea is also facing problems in France, where a labour conflict has affected the company, culminating in a massive strike over pay at 23 of 26 stores on February 13th.

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