Dubai Retailer MAF Posts 10% Rise In 2012 Revenue - Gulf Business
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Dubai Retailer MAF Posts 10% Rise In 2012 Revenue

Dubai Retailer MAF Posts 10% Rise In 2012 Revenue

The company, which is expanding rapidly, aims bid for Egypt supermarket chain Metro in the first quarter of 2013.


Dubai’s Majid Al Futtaim (MAF) expects to bid for the supermarket arm of Egypt’s Mansour Group in the first quarter, MAF’s chief executive said, after it posted a 10 per cent rise in annual revenue.

Mansour Group, also the largest distributor of General Motors cars in Egypt, aims to sell supermarket chain Metro and discount grocery store Kheir Zaman. Sources told Reuters in December that the deal was valued at $200 million to $300 million.

“We’re still in the due diligence phase, which we expect to be for another month or so,” Iyad Malas, chief executive of Majid Al Futtaim Holding, told Reuters. “At which time, we would hopefully make an offer that would be subject to negotiations and then would either conclude a transaction or not.”

The discussions signal growing appetite by Gulf-based firms to expand their presence in the most populous Arab state at a time when valuations are low due to political strife in Egypt.

Metro is the country’s largest supermarket chain with more than 40 outlets in 10 cities. Kheir Zaman has over 2,000 employees and 30 stores throughout the country.

Unlisted MAF, which reported a 10 per cent rise in annual revenue to Dhs21.6 billion ($5.9 billion) on Tuesday, entered Egypt in 2000 and it owns two shopping malls, plus 14 hypermarkets and supermarkets.

“We continue to believe that Egypt has a large consumer base that is attractive,” said Malas, adding the country provided five to nine per cent of the company’s revenue in 2012.

In Cairo, MAF will start building its Mall of Egypt project in the first quarter and also plans to expand its Maadi City Centre mall and develop land it owns near the city’s airport.

The family-owned group is the sole franchisee of French hypermarket chain Carrefour in the Middle East and owns 11 shopping malls and 11 hotels in the Middle East and North Africa.


MAF separated its Iran operations from the group in late 2012, with ownership passing directly to MAF’s family shareholders.

“We’ve been fully compliant in terms of sanctions. However, we felt there was always a risk, given our issuance and access to the bond market, there could be some investors who were nervous about having Iran in MAF Holding,” said Malas.

MAF issued a $400 million Sukuk, or Islamic bond, in February 2012, plus a $500 million conventional bond in July.

Iran provided about four per cent of group revenue last year following the devaluation of the rial.

The United Arab Emirates accounted for about half of MAF’s revenue in 2012 and the company is in talks to acquire a UAE fast food chain, Malas said, declining to give further details.

“We are speaking to someone already,” he said.

Saudi Arabia, Qatar and Bahrain also each provided five to nine per cent of MAF’s revenue last year, with the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) up seven per cent to Dhs3 billion.

Revenue from its property division, which includes its malls and hotels, rose 15 per cent of Dhs3.2 billion in 2012, with EBITDA at Dhs2 billion, the company said in a statement.

MAF’s lower-margin retail arm had revenue of Dhs17.8 billion in 2012, up eight per cent, and EBITDA of Dhs937 million.


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