Dubai-based Majid Al Futtaim Group, one of the largest diversified business houses in the region with interests in shopping malls, communities, retail and leisure sectors, announced a 15 percent increase in revenue to AED18 billion ($4.9 billion) and an 18 percent increase in EBITDA to AED1.9 billion ($517.7 million) compared to the first half of 2021.
After an utterly forgettable 2020, when it incurred a net loss of AED2.71 billion, Majid Al Futtaim Group bounced back strongly in 2021, with net profit increasing to AED2.46 billion. The trend has continued in the first half of 2022.
The total assets of the group was valued at around AED62.9 billion, and net borrowings stood at AED 11.2 billion, indicating to a strong balance sheet.
The sustained post-pandemic rebound in consumer confidence has led to increased footfall in shopping mall, hotel occupancy rates, and admission to its cinemas and leisure and entertainment venues.
Following a steady economic recovery in retail and leisure sectors, the Group expects its “prudent financial discipline and strong governance” will help it overcome any immediate impact.
Alain Bejjani, Chief Executive Officer of Majid Al Futtaim Holding, said this was also due to the company’s solid operational performance, driven by diversification efforts and a continued focus on cost efficiencies and scale.
“A strong, customer-focused strategy supported by unrivalled data and analytics capabilities has enabled Majid Al Futtaim to deliver sustained growth through H1 2022,” said Bejjani.
“Our efforts have been further amplified by MENA’s steady progress in moving beyond post-pandemic recovery as we collectively turn our efforts toward economic expansion and regional prosperity.
“The growth delivered in the first half of the year is encouraging. While our region is not immune to building global inflation and supply chain pressures, Majid Al Futtaim remains optimistic towards the broader economic outlook.
“Our prudent financial discipline and strong governance ensures our resilience in the face of any immediate impact while ensuring we are well-positioned to remain focused on sustainable value creation.”
Strong growth of retail business
Restored consumer purchasing power and higher tourism rates – a result of the easing of COVID-19 restrictions – has led to a big impact on its flagship retail business.
Majid Al Futtaim – Retail recorded a 9 percent increase in revenue, standing at AED14.4 billion for H1 2022.
The growth in retail was driven by the AED268 million increases in revenue for like for like sites, and growth in digital sales of AED453 million.
The group opened 18 new stores across its geographies. In line with the global transformation to digital retail services, it invested in the development of express commerce, which led to a 73 percent increase in digital sales. It also opened the UAE’s first BIO store in January this year, featuring the retailer’s first ever café and an in-store hydroponic farm.
Property revenue rises 51 percent
Revenue of its property division rose 51 percent to AED2.4 billion, while EBITDA was up 27 percent to AED1.4 billion.
Shopping mall tenant sales increased by 21 percent as footfall increased 20 percent to 100 million visitors compared to the previous year. The hotel portfolio’s revenue grew to AED333 million driven by a lower base of 2021 due to capacity restrictions. RevPAR (Revenue Per Available Room) and average occupancy rates climbed 142 percent and 43 percent, respectively.
New community launches in Tilal Al Ghaf has been well-received by the market. The Alaya Beach project and Elysian Mansions, consisting of ultra-exclusive mansions and grand villas, were released in February and May, respectively, and recorded sales of over AED2.4 billion, with 181 units sold.
Majid Al Futtaim Properties continues to make progress on its pipeline development projects, including the redevelopment of Mall of the Emirates and Mall of Saudi.
The group’s leisure, entertainment, and cinemas (LEC) registered a 56 percent increase in revenue to AED784 million and a rise in EBITDA to AED33 million, largely due to the lifting of operating capacity restrictions. Cinema admissions increased by 60 percent to 8.8 million.
For the 11th consecutive year, the company’s credit rating has been maintained at ‘BBB’ with a stable outlook by both S&P’s and Fitch Ratings.
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