Tesco has estimated a hit of up to £925m from the costs of dealing with the coronavirus pandemic and warned it could not give profit guidance for the current financial year.
The supermarket giant said that if trading returned to normal by August, it was likely the extra expenses for its retail operations - mainly staff and logistics costs - would be offset by higher sales and relief from a business tax introduced by the UK government to help companies through the crisis.
But it warned Tesco Bank would likely dip to a loss in the 2020-21 year, hurt by a reduction in income from all its activities, including credit cards, loans and travel money.
Tesco chief executive Dave Lewis said the company was justified in accepting £585m of business rates relief from UK taxpayers, while still paying investors a final dividend totalling £635m.
"What the government has done is recognise there were going to be incredible additional costs to keep feeding the nation," he told reporters.
He said the dividend was to reward shareholders, both large and small, who rely on the income, for Tesco's performance in the year ended February 29, which pre-dated the crisis.
"Whilst we appreciate that this may not be the case for a number of sectors or industries where there may not be any choice but to suspend dividends and preserve cash we are in a strong position to pay out we believe that it is right to do so," he said.
With some other retail businesses, such as department store group Debenhams, in dire straits, analysts were reassured there were no doomsday concerns playing out at Tesco, with the Covid-19 crisis having a neutral impact on retail, but a one-year hit in banking profits.
Supermarkets saw a surge in demand as shoppers stocked up on essential goods such as toilet roll and pasta ahead of a near lockdown to contain the spread of the virus.
The Irish grocery market experienced its busiest ever period over the 12 weeks to March 22 - increasing year-on-year sales by 10.1%, figures from Kantar showed earlier this week. Grocery sales reached €2.8 billion in the past 12 weeks.
Industry data last week also showed that UK grocery sales leapt more than a fifth to a record £10.8 billion in the four weeks to March 22.
However, the crisis has come with higher costs, such as the implementation of social distancing measures that restrict the number of shoppers in store at any one time, expanding online delivery operations, staff bonuses and hiring more employees.
Tesco's wholesale business Booker has also been hit by the closure of hotels, pubs, restaurants and cafes, as has demand for clothes and general merchandise.
Dave Lewis said the panic buying that emptied store shelves and strained supply chains at the start of the crisis had subsided, and that he did not expect Easter trading to see the same peak as previous years.
Tesco estimated extra costs related to the health crisis could be between £650-925m.
It said that in the last two weeks alone it had recruited more than 45,000 workers in Britain to help cover staff sickness and cope with additional demand.
Lewis told reporters the company currently had around 55,000 employees absent from work. According to its website, Tesco employs around 320,000 people in Britain.
The company, which has about 3,800 stores in the UK and Ireland, said operating profit before one-off items rose 14% to £2.96 billion in its 2019-20 financial year, broadly in line with analysts' expectations. Group sales fell 0.7% to £56.5 billion.
Despite the pandemic, Lewis said Tesco still expected to complete the £8.2 billion sale of its business in Thailand and Malaysia to Charoen Pokphand Group in the second half of the year.
And Lewis still plans to leave Tesco on October 1 after six years in the job, handing over to Irishman Ken Murphy, a former executive of Walgreens Boots Alliance.