McDonald’s suffered a loss of US$127 million. This was the impact of the Russian invasion of Ukraine.
McDonald’s has closed its restaurants in both countries. That’s what causes the loss to occur.
Even though McDonald’s closes it continues to pay its 62,000 employees in Russia, so does Ukraine. “In both countries, we continue to pay employees and provide additional support,” explained McDonald’s CEO Chris Kempczinski.
The staff costs, plus payments for rent and supplies, cost the company US$27 million. The remaining US$ 100 million or equivalent to Rp 1.44 trillion came from unsold food and other items that had to be put away.
“Results include … US$ 100 million (Rp 1.44 trillion) in costs for inventories in the company’s supply chain that are likely to be disposed of as restaurants are temporarily closed,” the company said in a statement.
Kempczinski said the company will offer updates in Russia and Ukraine at the end of the second quarter.
There are 847 McDonald’s restaurants in Russia that have closed. While 108 are in Ukraine. The two countries account for 9% of the company’s revenue in 2021.
The shutdown hit McDonald’s net profit, which fell 28% in the three months from January to March.