Majid Al Futtaim, a leading shopping mall and leisure pioneer across the Middle East, Africa and Asia, has posted a revenue of Dh35.2 billion ($9.58 billion) during 2019, marking a year-on-year increase of one per cent.

Solid operational performance, driven by diversification efforts and a continued focus on cost efficiencies and scale, resulted in a 1 per cent increase in EBITDA to Dh4.6 billion.

The company’s disciplined financial management translated to excellent operational cash flow amounting to 122 per cent of EBITDA, while its balance sheet remained strong with borrowing unchanged and total assets valued at Dh 63 billion.

Majid Al Futtaim witnessed strong growth in key areas of its business in 2019. The company’s long-term commitment to Egypt and Saudi Arabia has been rewarded as economic and social reforms have created new opportunities for VOX Cinemas and Carrefour to expand across both countries. Majid Al Futtaim’s performance was further bolstered by its continued focus on operational excellence and its agile approach to challenging market conditions and digital disruption.  

Alain Bejjani, chief executive officer of Majid Al Futtaim - Holding, said: “Majid Al Futtaim’s financial performance is driven by a sustainable business model that continues to deliver growth for the company. In 2019, we advanced our diversification efforts by entering new countries and expanding our footprint in priority markets, while maintaining strong financial discipline across our portfolio. We reached more customers in new and existing markets, both online and offline, and this has been key to our continued success.

“In line with our core values and responsibility towards the environment, sustainability remains a top priority for Majid Al Futtaim. Securing a low risk ESG rating, issuing the world’s first benchmark corporate Green Sukuk, and committing to phase out single use plastic from our operations were milestone moments in our sustainability journey.”

Majid Al Futtaim – Properties:

Compared to 2018 figures, Majid Al Futtaim – Properties’ EBITDA was unchanged at Dh3 billion, while revenue decreased by 1 per cent to Dh4.6 billion. This was mainly due to the impact of challenging market conditions on revenue per available room (RevPAR) in the hotels business, despite outperforming the market in Dubai and a 3 per cent increase in room occupancy across the Majid Al Futtaim portfolio.

Majid Al Futtaim – Retail:

Despite a reduction in discretionary spend and basket size due to weaker consumer sentiment, Majid Al Futtaim – Retail recorded a revenue growth of 1 per cent, standing at Dh28.1 billion for 2019, while EBITDA increased by 2 per cent to Dh1.4 billion. The continued focus on operational excellence resulted in a margin uplift, while the company’s operational cash flow was 132 per cent of EBITDA.

The Carrefour business continued to expand with 12 hypermarkets and 30 supermarkets added to the portfolio in 2019, with a significant focus on Egypt. The total number of stores now exceeds 300 across the region, including the first store in Uganda which is providing customers with access to international-standard retail experiences.

Majid Al Futtaim - Ventures:

Majid Al Futtai – Ventures recorded a 17 per cent increase in revenue during 2019, rising to Dh2.8billion. EBITDA increased by 30 per cent to Dh416 million with growth driven mainly from new sites in Saudi Arabia, Kuwait and Egypt.

VOX Cinemas, in its 20th year, increased its total number of screens to 499 across the region. In Saudi Arabia, the business further strengthened its market share, opening 78 new screens and bringing the total number opened in the Kingdom to 82. Majid Al Futtaim – Ventures also introduced Dreamscape, an immersive virtual reality experience at Mall of the Emirates. It is the first Dreamscape store to open outside of the United States.

Future Investment

Majid Al Futtaim plans further expansion in markets with high growth potential as well as its home market, the UAE. The company’s shopping malls will increase to 28 assets in 2020 with the opening of two new malls in Sharjah; City Centre Al Zahia which will be the largest mall in the Northern Emirates, and Matajer Al Musalla which opened in Q1.

In 2020, Carrefour will open its first store in Uzbekistan, with plans for further expansion to new markets in Central Asia and Africa. The company will also continue to increase the number of stores in its key markets and scale up its ecommerce capacity to meet growing online demand, through innovative fulfilment solutions in the UAE and Saudi Arabia, in particular.

VOX Cinemas will continue its expansion drive in Saudi Arabia in line with its plan to open 600 screens in the country by 2023. In 2020, the company plans to open 87 new screens with a focus on bringing cinema to customers in cities such as Tabouk, Hail and Jubail for the first time, while adding to the current portfolio in Riyadh, Jeddah and Dammam.

Financing

Majid Al Futtaim’s financial and liquidity position remains strong covering its net financing needs for more than the next four years, through its cash and available committed lines. During the year, the company refinanced existing debt through two Green Sukuk issuances totalling $1.2 billion, with the initial issue being the world’s first benchmark size corporate Green Sukuk.

The proceeds will be used to finance Majid Al Futtaim’s existing and future green projects, including green buildings, renewable energy, sustainable water management, and energy efficiency. – TradeArabia News Service