UK-retailer Tesco reports worst ever loss dragged by property write-down
"The market is still challenging and we are not expecting any let up in the months ahead," new Chief Executive Dave Lewis said.
Tesco posted an annual loss of 6.4 billion pounds ($9.5 billion) on Wednesday, the worst in its 96-year history, after shoppers deserted Britain's biggest retailer, forcing it to write down the value of its stores.
Hurt by an accounting scandal and sliding sales due to pressure from discounters and a brutal price war, the supermarket wrote down the value of its stores by 4.7 billion pounds.
The statutory loss, which also includes restructuring charges and stock writedowns, is one of the biggest in British corporate history.
"The market is still challenging and we are not expecting any let up in the months ahead," new Chief Executive Dave Lewis said.
Tesco's trading profit was 1.4 billion pounds, in line with company guidance but less than half of the 3.3 billion pounds made the year before and a third straight year of decline.
The firm also revealed it had net debt of 8.5 billion pounds and a net pension deficit of 3.9 billion pounds. It has agreed to pay 270 million pounds per year into the scheme.
Tesco's property writedown follows similar moves by rivals Sainsbury's and Morrisons and reflects the deterioration in UK grocery market conditions in recent years. It is on top of about 4 billion pounds of charges Tesco hastaken over the last three years.
The group said trading conditions had also remained tough overseas where trading profit in Asia and Europe fell 15.3 percent and 31.1 percent respectively.