Majid al-Futtaim reports first-half revenue growth

03 August 2016

The 11 per cent rise in revenues come amid company’s entry into new African and Asian markets

Majid al-Futtaim Group, the Dubai-headquartered conglomerate with a portfolio including shopping malls, retail and hospitality ventures, has recorded an11 per cent increase in its first-quarter group revenues.

The company, which continues to expand in the Middle East and Africa, and Central Asian regions, said revenues reached AED15.2bn ($4.1bn) for six-month period ending 30 June, which compares with AED13.7bn reported for the corresponding period in 2015.

Majid al-Futaim, which owns and operates 19 shopping malls, 12 hotels and three mixed-use communities said it maintains a strong balance sheet with total assets valued at AED52bn and net debt of about AED10bn.

“Our financial results during the first half once again show the resilience of our business model despite softening economic conditions,’’ the group chief executive Alain Bejjani said in a statement. “Going forward, we will press ahead with our expansion plans,’’ he added.

On operating company level, Majid al-Futtaim Properties recorded an 11 per cent increase in revenues to AED2.2bn while the occupancy across shopping malls stayed unchanged at 98 per cent. The company in April opened the Aspen Chalets at the Kempinski Mall of the Emirates and, in June, construction work commenced on the Aloft Dubai City Centre Deira, which is expected to be completed in 2018, according to the statement.

Overall revenues rose for Majid al-Futtaim Retail increased by 9 per cent year-on-year to AED12.3bn for the first six months of 2016 as the company entered new markets. Its new international offerings included the opening of its first Carrefour hypermarkets in Kenya and Kazakhstan, as well as additional store openings in existing markets.

Majid al-Futtaim Ventures, which operates portfolio of cinemas, leisure and entertainment, fashion, healthcare and consumer finance portfolio saw a 43 increase in revenues to AED870m.

In June, the company announced plans to invest AED30bn in the next 10 years in the UAE, which will take its total investments in the domestic market to AED48bn. The investments include both new projects and the expansion of existing assets, which will create more than 170,000 direct and indirect job opportunities in the country, Bejjani said at the time.

It plans to develop 10 new shopping malls under the City Centre brand, including a new mall in Dubai. The development is part of a 740,000-square-metre mixed-use residential, retail, hospitality, commercial and leisure community.

A mega mall in Sharjah and expanding mall offering to Abu Dhabi, starting with the development of a community mall in Masdar City, are also part of the expansion agenda.

The company has previously said it will increase its footprint in Saudi Arabia, Egypt and Oman, which includes new shopping mall developments in Riyadh, Cairo, and Muscat, as well as hotels and mixed-use communities.

The company, which has a credit rating of BBB, the highest among private firms in the UAE, has also put funding options in place for two of its flagship mall projects in Saudi Arabia. Majid al-Futtaim is investing SR14bn ($3.7bn) to develop two new shopping malls in Riyadh, it said in June.

In July 2016, it raised USD $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, it said in the statement.

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