Ingka, the owner of the majority of IKEA stores, announced a more than fivefold decline in yearly net profit on Friday due to increased interest rates and its pullout from Russia.

The company's net profit for the fiscal year that ended in August 2022 dropped to $299 million, down from 1.6 billion euros in 2021.

The reduction was caused mostly by increased interest rates, which impacted its financial sector assets. In order to combat rising inflation, central banks around the world have raised interest rates.

"The net income was also impacted by the effects of scaling down operations in Russia," the company said as quoted by AFP.

It is worth noting that Inter Ikea, the holding company of the furniture giant, also disclosed a substantial decline in profits due to inflation and the departure from Russia.

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