Majid Al Futtaim, a leading shopping malls, communities, retail, and leisure pioneer across the Middle East, Africa, and Central Asia, on Tuesday reported a 6% decline year-on-year in consolidated revenue to AED16.7 billion ($4.55 billion) in the first half of this year.

 

The company saw a 2% decline year-on-year in consolidated EBITDA to AED2.1 billion and a 6% decline in net profit after tax to AED1.6 billion, according to its operational and financial results for the period ending June 30, 2024. 

 

Despite macroeconomic headwinds from geopolitical instability and currency devaluations in the region, the group delivered a stable performance, supported by its diversified portfolio and strong balance sheet, the company said. 

 

At constant FX rates, the Group revenue declined by 3%, while EBITDA and net profit increased by 1% in the same period. The group continues to maintain a healthy balance sheet with assets valued at approximately AED70 billion, a 2% increase year-on-year. 

 

Ahmed Galal Ismail, Chief Executive Officer, Majid Al Futtaim – Holding, said: “Majid Al Futtaim’s first half year results continue to underscore the strength of our diversified portfolio, protecting overall profitability despite the challenges within some of our current operating environments. 

 

“Majid Al Futtaim Properties delivered a record performance, driven by the success of UAE-based shopping malls and strong consumer confidence in Majid Al Futtaim’s Tilal Al Ghaf and newly launched Ghaf Woods residential developments. Our Lifestyle company continued to see positive demand across its portfolio, while the Entertainment company showed encouraging progress in its cinema admissions, reflecting the steady return of quality content. 

 

“The ongoing transformation of our Retail digital business has enabled solid progress in advancing our omnichannel aspirations. The appointment of new leadership in the second quarter is set to further strengthen Retail's performance through a turnaround plan focusing on market leadership through unrelenting customer-centricity. 

 

 “More broadly, for the remainder of the year the group ‘s interests will continue to focus on strengthening its core, investing prudently to drive value creation for all stakeholders, and bringing great moments to our customers, communities and colleagues alike.”

 

Majid Al Futtaim Properties’ revenue up 9% 

Majid Al Futtaim Properties registered 9% year-on-year growth in revenues to reach AED3.7 billion primarily driven by Tilal al Ghaf residential real estate development as well as an increase in revenues from the group’s UAE shopping malls. EBITDA increased by 11% to AED1.9 billion. At constant FX rates, revenue would have grown by 10% and EBITDA by 13%.

 

Shopping malls registered 8% year-on-year revenue growth and recorded 96% occupancy. Hotels reported an increase in revenue per available room (RevPAR) of 18% year-on-year mirroring Dubai’s increasing appeal as a tourism hub as the city welcomed over 9 million overnight visitors in the first half of 2024, while average occupancy was down by 2%. In March 2024, the Group sold a number of non-core assets from its hospitality portfolio.

 

Furthermore, the group continued to drive sales across its residential community portfolio, booking AED5.9 billion in gross sales in the first half of the year. In June, Majid Al Futtaim launched a new residential development in Dubai, Ghaf Woods, a first-of-its-kind integrated forest-living community, which saw its first phase of 1,000 units in Dubai sell out, demonstrating strong market interest and demand.

 

Cinemas see 3% growth

The group’s Cinemas portfolio registered 3% year-on-year increase in admissions contributing towards a strong EBITDA growth of 103% for the period. The portfolio's growth was further complemented by the welcome addition of 13 new screens in KSA during the first half of 2024, including the launch of the multiplex at Jeddah Park by VOX Cinemas, offering a best-in-class movie-going experience with cutting-edge technology and experience. The Lifestyle business reported an increase in revenue by 23% to AED584 million and added eight new stores in the first half, with a total of 78 stores across the region. While SHARE, the group’s loyalty programme grew its membership by 8.2%, reaching 4 million members. 

 

Retail revenues down

Majid Al Futtaim Retail registered an 11% year-on-year decline in revenue to AED11.6 billion and a 47% year-on-year decline in EBITDA to AED278 million. This is attributable to declining basket size resulting from dampened consumer sentiment following geopolitical conflict in the region and the impact of currency devaluation in Egypt and Kenya.  With constant FX rates, revenue would have declined by 8%. 

 

Majid Al Futtaim Retail’s discount grocery retail brand in Egypt, Supeco, continued to grow with four store openings in H1 and another 11 planned for the remainder of 2024. The success of the brand highlight’s Majid Al Futtaim’s commitment to meeting the changing demands of local markets.   

 

Retail Digital, the company’s rapidly growing online vertical, achieved strong growth, with revenue up by 16% to AED 1.3 billion and EBITDA growing 109% year-on-year, turning positive for the first time. This strong performance, driven by operational efficiencies, underscores the Group's commitment to ‘experience-led’ digital transformation. 

 

Progress on sustainable impact

Majid Al Futtaim has continued to lead the way in responsible growth across the region, achieving significant milestones in the first half of 2024. 

 

Tilal Al Ghaf District, a mixed-use development within Tilal Al Ghaf, earned the coveted BREEAM ‘Excellent’ certification, highlighting its superior sustainability credentials. Additionally, City Centre Al Zahia was honoured with the Sharjah CSR Excellence Award for its wide-ranging community initiatives, including events that promote health, inclusivity, and social responsibility.

 

The group has also maintained its low risk ESG rating by Sustainalytics.

 

The group is making steady progress with Emiratisation with the percentage of UAE nationals crossing 11% for the first time in our history. Majid Al Futtaim is the only company in the UAE to win a NAFIS award two years in a row. Finally, we were recognised by LinkedIn as the highest-ranking privately-owned UAE business for career growth.

 

Financing

Majid Al Futtaim continues to maintain a strong financial and liquidity position backed by a well-balanced capital structure encompassing capital markets and bank financing. Net borrowings decreased to AED14.6 billion, with most of its debt maturing 2027 onwards. 

 

The group has upheld its BBB credit rating with a stable outlook from Standard & Poor’s and Fitch Ratings.  – TradeArabia News Service