Majid Al Futtaim reports 18% rise in EBITDA to Dhs1.9bn, revenue rises 15% to Dhs18bn

Majid Al Futtaim, has reported its audit reviewed operational and financial results for H1 2022.

Following a steady economic recovery in retail and leisure sectors, the group reported a revenue of Dhs18bn, an increase of 15 per cent compared to H1 2021.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 18 per cent to Dhs1.9bn, a result of the company’s solid operational performance, driven by diversification efforts and a continued focus on cost efficiencies and scale. The group continues to maintain a strong balance sheet with total assets valued at around Dhs62.9bn. Net borrowings stood at Dhs11.2bn.

Alain Bejjani, CEO of Majid Al Futtaim – Holding, said: “A strong, customer-focused strategy supported by unrivalled data and analytics capabilities has enabled Majid Al Futtaim to deliver sustained growth through H1 2022. 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.”

The group has continued to benefit from a sustained post-pandemic rebound in consumer confidence, as evidenced in increased shopping mall footfall, hotel occupancy rates, and admission to its cinemas and leisure and entertainment venues.

Division highlights

 Majid Al Futtaim – Properties: Compared to 2021 figures, Majid Al Futtaim – Properties’ revenue rose 51 per cent to Dhs2.4bn, while EBITDA was up 27 per cent to Dhs1.4bn.

Shopping mall tenant sales increased by 21 per cent, while footfall increased 20 per cent to 100 million visitors compared to the previous year. Meanwhile, the hotel portfolio’s revenue grew to Dhs333m driven by a lower base of 2021 due to capacity restrictions. RevPAR (revenue per available room) and average occupancy rates climbed 142 per cent and 43 per cent, respectively.

New community launches in Tilal Al Ghaf remain well-received by the market. The Alaya Beach project and Elysian Mansions were released in February and May, respectively, and recorded sales of over Dhs2.4bn, with 181 units sold by June 30.

Majid Al Futtaim – Retail: The division recorded a 9 per cent increase in revenue, standing at Dhs14.4bn for 2022, while EBITDA fell 9 per cent to Dhs567m.

The growth in retail is driven by the Dhs268m increases in revenue for LFL (like-for-like sales) sites, and growth in digital sales of Dhs453m. Revenue rose in comparison to H1 2021 is due to restored consumer purchasing power and higher tourism rates, resulting from relaxed Covid-19 restrictions.

Read: UAE consumer spending increased by 22% in H1 2022, reveals Majid Al Futtaim report

Majid Al Futtaim also opened 18 new stores across its geographies. In line with the global transformation to digital retail services, the group invested in the development of express commerce, seeing a 73 per cent increase in digital sales. In addition, Majid Al Futtaim Retail opened the UAE’s first BIO store in January, featuring the retailer’s first ever café and an in-store hydroponic farm.

Majid Al Futtaim – Leisure, Entertainment and Cinemas: The division registered a 56 per cent increase in revenue to Dhs784m and a rise in EBITDA to Dhs33m, largely due to the lifted operating capacity restrictions.

Cinemas’ admissions increasing by 60 per cent to 8.8 million. The strong results are a result of better performance in Q1 revenues, and better than expected performance of new content releases.

Majid Al Futtaim – Lifestyle: Majid Al Futtaim – Lifestyle registered a 42 per cent rise in revenues to Dhs360m and EBITDA of Dhs3m, mainly driven by Lululemon’s international expansion and growth in sales for CB2, Abercrombie & Fitch, LEGO, AllSaints, and Crate & Barrel.

Read: Majid Al Futtaim opens its first official CB2 store in Dubai

Future investment
In its pursuit of being economically resilient during H2 2022, Majid Al Futtaim will continue to support sustainable economic development while adhering to a prudent financial management strategy. The business will also look at investing on corporate initiatives including digital transformation, data and analytics, customer experience and loyalty programmes.

Majid Futtaim Properties continues to make progress on its pipeline development projects, including Mall of the Emirates redevelopment and Mall of Saudi.

Majid Al Futtaim – Retail will continue to invest and scale up its omnichannel presence, enhance its network of stores and grow its food and health businesses to meet consumers’ evolving needs.

Financing
Majid Al Futtaim’s robust balance sheet has allowed it to maintain a strong financial and liquidity position thanks to the steadily recovering market conditions. The company’s debt maturity profile remains light with no material debt maturity until May 2024.

Despite challenging macroeconomic conditions and volatile financial markets, in June the group tendered its $500m outstanding hybrid notes with the first call date falling in September and replaced them with a new $500m ‘Green’ hybrid notes with a first call date falling in September 2027. This was the group’s first hybrid transaction in green format and the first green corporate hybrid from MENA region.