Majid Al Futtaim reports ‘robust’ H1 performance despite 10% revenue decline

Mall and community developer revealed that its financial standing showed ‘resilience’, with net profits reaching $180.2m, as it overcomes worst of the pandemic

Dubai-based Majid Al Futtaim has reported revenue of AED15.6 billion ($4.3bn) in the first six months (H1) of 2021, a 10 percent drop from the same period last year, as the company continues to navigate through the challenges caused by the coronavirus pandemic.

The shopping mall, communities, retail and leisure company, which has operations in the Middle East, Africa and Asia, also recorded net profit after tax of AED662m ($180.2m); and earnings before interest, taxes, depreciation and amortisation (EBITDA) of AED1.6bn ($436m), representing an increase of 2 percent.

“Despite the prolonged impact of the Covid-19 pandemic, Majid Al Futtaim has delivered a robust performance over the first half of the year, driven by prudent financial management and a diversified portfolio,” said Alain Bejjani, chief executive officer of Majid Al Futtaim – Holding.

“While we continue to feel impact from the continued disruption, our strong financial position has enabled us to remain resilient to that pressure and agile in how we respond to the stressors within our operating environment. This has enabled us to continue executing on delivery of our regional growth strategy.”

Bejjani also cited encouraging signs of recovery across the company’s operating markets, as consumers gain confidence in resuming their pre-pandemic activities.

“In addition to the increased activity across our physical assets, the acceleration of pre-pandemic trends – particularly as they pertain to digital capabilities – continues to gather pace. We remain committed to investing in all areas of our business to ensure we are well-positioned to best serve our customers’ evolving wants and needs,” he added.

Majid Al Futtaim – Properties registered a 6 percent increase in revenue, standing at AED1.6bn ($435.5m), following the opening of City Centre Al Zahia earlier in March, the largest mall in the Northern Emirates.

Hotel revenue remained flat versus last year at AED147m ($40m), with average occupancy increasing by 16 percent to 53 percent, offset by a 2 percent decline in revenue per available room (RevPAR). Meanwhile, the reduction in international visitors was offset by an increase in staycations.

Majid Al Futtaim – Retail registered a 12 percent decline in revenue to AED13.2bn ($3.6bn), attributed to the challenging economic environment.

However, online orders were up 50 percent, online sales were up 25 percent, and the value of transactions through SHARE, Majid Al Futtaim’s loyalty programme, experienced an increase of 27 percent.

Majid Al Futtaim – Leisure, Entertainment and Cinemas also registered a 25 percent increase in revenue to AED502m ($136.7m), despite operating at limited capacities and with curfews in certain countries. Cinemas’ revenue improved by 22 percent to AED420m ($114.3m), as the company continues its expansion into Saudi Arabia, growing the number of screens in the country by 17 to a total of 141 by the end of June.

New investments for Majid Al Futtaim, include Mall of Saudi, set to break ground in the final quarter of this year, and Majid Al Futtaim – Leisure, Entertainment and Cinemas’ expansion in Saudi Arabia, with a further 13 screens expected to open across the kingdom during the remainder of the year.

Majid Al Futtaim – Retail will also continue its expansion across Egypt, Saudi Arabia, Kenya, Uganda, and Uzbekistan, aiming to invest and scale up its e-commerce capabilities to meet the continued growing online demand across the region.

Arabian Business. August 23, 2021