MAF Holding sees profits jump on Dubai retail boost

Majid Al Futtaim Holding, the operator of malls and hotels in some of the Middle East’s most politically unstable countries, said full-year earnings increased 18 percent on growth in its home market of Dubai.

Revenue rose 10 percent to AED18.7bn ($5.1bn), the closely-held company said in an emailed statement on Monday. Earnings before interest, taxes depreciation and amortization, advanced 18 percent to more than AED2.7bn, the company said.

“Diversification across business segments and geographies has been a key driver in ensuring strong operating performance,” chief executive officer Iyad Malas said in the statement. “Strong performance in Dubai helped to offset any softness resulting from regional turmoil.”

Majid Al Futtaim, operator of Carrefour stores in the Middle East, said revenue from hotels and shopping center rents increased 21 percent as more than 130 million people visited the company’s malls last year, the CEO said.

The owner of stores in Iran, Egypt, Syria and Lebanon is planning to press ahead with expansion plans even as parts of the region see continued political turmoil and violence.

Majid Al Futtaim plans to open stores in Shiraz and Isfahan in Iran and says it has seen an increase in demand in the capital, Tehran. Full-year sales increased at its store in Aleppo, Syria, even as President Bashar Al-Assad’s government battles with demonstrators opposing his rule. Suppliers are drying up as sanctions against Syria take effect, Malas said.

The company has ample cash and is doesn’t need to issue bonds this year to refinance maturing debt and fund expansion, the CEO said. The company is set up to raise funds from both the conventional and Islamic markets.

“We are under no pressure definitely in the course of 2012 and well into 2013, including all the capex and the repayment that’s coming due during that period,” Malas told said at a press conference today. “If there is a window in the next few weeks for either a conventional or sukuk program we will go for it. If that window is not available for whatever reason, given what is happening in the global markets, then we will do it.”

Majid Al Futtaim had the “best performance of its business operations since the group was founded in 1992” it said in the statement.