Dubai-based regional retail giant Majid Al Futtaim said today that its six-month revenue grew by 11 per cent to Dh15.2 billion (H1 2015: Dh13.7bn) while its earnings before interest, taxes, depreciation and amortisation (EBITDA) was up by 7 per cent at Dh1.9bn (H1 2015: Dh1.8bn).
While disclosing its preliminary unaudited financial results for the first six months of 2016, the company said it continues to maintain a strong balance sheet with total assets valued at Dh52bn and a net debt of around Dh10bn.
“We have delivered another sustained period of growth during the first half of 2016 by continuing to raise the bar when it comes to customer experience, while expanding our geographical footprint. For the first time, we have entered into sub-Saharan Africa and Kazakhstan through Carrefour and have expanded our leisure, entertainment and fashion businesses across markets,” said Alain Bejjani, CEO of Majid Al Futtaim Holding.
“Our financial results during the first half once again show the resilience of our business model despite softening economic conditions. 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. This approach will not only position our company for further growth in the future, but will ensure we continue to support economic development across the Mena region,” he said.
Majid Al Futtaim Properties
Revenues up 11 per cent y-o-y to Dh2.2bn; EBITDA up by 12 per cent to Dh1.4bn.
The firm said that occupancy across all of its shopping malls remained very strong at 98 per cent.
However, occupancy rates Majid Al Futtaim’s hotels was 77 per cent, with revenue per available room (RevPAR) declining by about 11 per cent versus the first half of 2015. The firm nevertheless said that this was still an outperformance when viewed against the broader hospitality market which dropped by about 13 per cent for the same period.
In April 2016, the Aspen Chalets at the Kempinski Mall of the Emirates were opened to the public and in June construction work commenced on the Aloft Dubai City Centre Deira, which is expected to be completed in 2018, it noted.
Majid Al Futtaim Retail
Revenues up 9 per cent y-o-y to Dh12.3bn; EBITDA up by 2 per cent to Dh582 million.
This, the firm said, was driven primarily by entry into new markets, including the opening of its first Carrefour hypermarkets in Kenya and Kazakhstan, as well as additional store openings in existing markets.
Majid Al Futtaim Retail launched eleven new stores, strengthening its presence to more than 160 outlets in 15 countries across the Middle East, Africa and Central Asia.
Majid Al Futtaim Ventures
Revenues up 43 per cent to Dh870m; EBITDA YTD was at Dh56m.
Cinemas opened nine new screens, expanded Vox Theatre by Rhodes and opened its first outdoor cinema concept. In leisure and entertainment, one new Magic Planet and one new Lego store were opened.
"In response to the opportunities that we have identified across the region, we continue to progress with a series of new developments which will enhance our offering and deliver even more great moments for everyone, every day. We plan to open our second My City Centre neighbourhood retail concept in Al Barsha (Dubai), and Mall of Egypt, the company’s flagship project in Egypt, in the second half of the year.
“In addition, Majid Al Futtaim Retail plans to expand our Carrefour franchise presence across our geographical footprint with the opening of 15 additional stores by the end of 2016,” added Bejjani.
Majid Al Futtaim is also progressing with its recently announced long-term investment plans in the UAE, Saudi Arabia Egypt and Oman. These include new shopping mall developments in Dubai, Abu Dhabi, Riyadh, Cairo, and Muscat, as well as hotels and mixed-use communities.
The company continues to maintain a very strong financial and liquidity position covering its net financing needs of the next two years through its cash and available committed lines.
In July 2016, the company raised $300m with a tap issue on its existing 2024 bonds, extending the average life of the company’s debt portfolio and further improving its balanced debt maturity profile.
Standard & Poor’s and Fitch have reaffirmed the company’s credit rating at BBB with a stable outlook during the year, reiterating its credit strengths such as quality of assets, strong corporate governance and prudent financial management.