British retailer Tesco has reported the worst results in its history with a record statutory pre-tax loss of $9.5 billion for the year to the end of February.
That compares with annual pre-tax profit of $3.35 billion a year earlier.
It is the biggest loss suffered by a UK retailer and one of the largest in the country’s corporate history.
Around $7 billion of the losses were the result of the fall in property value of its UK stores, 43 of which it said would close earlier this month.
Tesco CEO Dave Lewis admitted it had been “a very difficult year for Tesco”.
He added: “The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.
“We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far.”
Dave Lewis added that he expected conditions in the coming financial year to remain challenging.
However, investors reacted positively to the results.
Tesco’s share price rose by more than 1% in early trading on the London Stock Exchange.
The results cap a tumultuous year for the supermarket giant which is still being investigated by the Serious Fraud Office (SFO) after it overstated its half-year profit forecast in August by $389 million.
Annual group trading profit, which counts sales through the supermarket’s tills was also down 60% at $2 billion, compared with $4.9 billion a year earlier.
Tesco company said the performance of its European stores disappointed as a result of “strong competition from discount retailers” which held back its sales performance, particularly in Ireland which saw a like-for-like sales fall 6.3% in the year.
In Asia, Tesco said trading profit was $836 million, once currency fluctuations were stripped out, 15.3% lower than a year earlier a result of sales falling in South Korea, Thailand, and Malaysia.
Tesco said it had also agreed a plan with the trustees of its pension scheme to pay $400 million a year to help mend its $5.75 billion pension deficit.
The company has started a consultation with staff to replace the current defined benefit pension scheme with a cheaper defined contribution scheme.