McDonald's profit fell 18% in 2022 due to losses from leaving Russia

McDonald's has closed one of its most difficult years with a drop in profits of 18%, up to 6,177.4 million dollars (about 5,700 million euros at current exchange rates).

The company has been improving its accounts and has managed to increase its profits by 16% in the fourth quarter, but in the year as a whole it has not been able to overcome the exchange rate impact and the extraordinary ones derived from the departure from Russia and from a tax inspection in France .

Revenues were affected by the strength of the dollar.

In constant currency, they grew by 6%, but that growth comes to nothing when they transfer their sales in countries with weaker currencies to dollars.

The company billed 23,183 million dollars, slightly below the 23,223 million the previous year, as reported to the Securities and Exchange Commission (SEC).

If what is analyzed are the sales that the group defines as comparable, they grew by 10.9% in the year (5.9% in the United States) due to the rise in menu prices and the increase in customers seeking cheap alternatives to eat out in a context of sharp price increases.

The departure of Russia as a result of the war in Ukraine, with the sale of the business to its local partner, weighed on income, but where it had the most impact was on profits.

The company of the golden arches scored a charge of 1,281 million dollars before taxes.

McDonald's has also noted an expense of 537 million for a tax inspection in France (the non-provisioned part of the fine imposed on it in June) and a capital gain of 271 million for the sale to Mastercard of its Dynamic Yield business.

According to the company, earnings per share would have grown 9% without these two effects and 15% if the foreign exchange impact is also neutralized.

“Our Accelerating the Arches strategy is driving growth and building brand strength, delivering exceptional performance into full year 2022 with like-for-like sales growth of more than 10% and number of sales growth. 5% comparable customers globally," McDonald's Chairman and CEO Chris Kempczinski said in a statement.

“While we expect near-term inflationary pressures to continue into 2023, we remain fully confident in Accelerating the Arches, which now includes a greater emphasis on new restaurant openings.

We are proud of our good results, but we are not satisfied.

That is the hallmark of McDonald's”, he added.