By Sarah Townsend
Strong growth for property, retail, ventures on back of entry to sub-Saharan Africa and Kazakhstan
Shopping mall operator Majid Al Futtaim has reported an 11 percent increase in group revenues for the first six months of 2016, from AED13.7 billion ($3.72 billion) in the first half of 2015 to AED15.2 billion ($4.13 billion) as of June 30.
Earnings before interest, tax, depreciation and amortization (EBITDA) rose by 7 percent, reaching AED1.9 billion from AED1.8 billion in the first half of 2015.
The Dubai-based group also reported total assets valued at AED52 billion ($14.15 billion) and net debt of around AED 10 billion ($2.72 billion) in its preliminary unaudited results for the first half of 2016.
It said it maintained a “very strong financial and liquidity position covering its net financing needs of the next two years through cash and available committed lines”.
Last month, Majid Al Futtaim raised $300 million through a tap issue on its existing 2024 bonds, extending the average life of the company’s debt portfolio. The group was assigned a ‘BBB’ credit rating by Standard & Poor’s and Fitch this year.
In the group’s company breakdown for H2 2016, Majid Al Futtaim Properties reported an 11 percent revenue rise to AED2.2 billion ($598 million) from the previous year, and a 12 percent increase in EBITDA to AED1.4 billion ($381 million). Occupancy across all shopping malls in the Middle East, Africa and Central Asia remained strong at 98 percent, the company said, while comparable hotels recorded occupancy rates of 77 percent and an 11 percent decline in revenue per available room (RevPAR) in the first half of 2015.
The company noted that, despite the decline, Majid Al Futtaim hotels still outperformed the broader hospitality market which dropped by around 13 percent regionally over the same period.
It added that construction had started on the 103,000 square metre City Centre Almaza mall in Cairo during the period, as well as the Aloft Hotel at City Centre Deira.
Majid Al Futtaim Retail reported overall revenues rose by 9 percent year-on-year to AED12.3 billion ($3.34 billion), while EBITDA rose by 2 percent to AED582 million ($158 million).
The growth was driven primarily by entry into new markets, including the opening of its first Carrefour hypermarkets in Kenya and Kazakhstan. In total, the company launched 11 new stores, building its presence to more than 160 outlets in 15 countries across the Middle East, Africa and Central Asia, it said.
Meanwhile, Majid Al Futtaim Ventures reported strong financial performance with overall revenues rising 43 percent to AED870 million ($236 million) year-on-year and EBITDA of AED56 million (no comparative figure was disclosed).
Majid Al Futtaim Ventures is the company’s fast-growing portfolio of cinemas, leisure and entertainment, fashion, healthcare, consumer finance, food and beverage, and facilities and energy management businesses.
The cinemas business opened nine new screens over the period, including an expanded VOX THEATRE by chef Gary Rhodes in Dubai and its first outdoor cinema concept.
In the leisure and entertainment sector, the company said one new Magic Planet and one new Lego store were opened.
Alain Bejjani, CEO of Majid Al Futtaim Holding, said: “We have delivered another sustained period of growth during the first half of 2016 by continuing to raise the bar on customer experience while expanding our geographical footprint.
“For the first time, we have entered into sub-Saharan Africa and Kazakhstan through Carrefour and expanded our leisure, entertainment and fashion businesses across markets.
“Our financial results during the first half show the resilience of our business model despite softening economic conditions.”
He added: “Going forward, we will press ahead with our expansion plans, while developing our business in existing and new markets when the right opportunities are identified and with a continued commitment to our prudent financial and risk management approach.”