Majid Al Futtaim posts 7% drop in revenue

Majid Al Futtaim, a leading retail, real estate and leisure operator in the region, reported on Tuesday a 19 per cent plunge to Dh3.8 billion in earnings before interest, tax, depreciation and amortization in 2020.

The company reported an annual revenue of Dh32.6 billion, representing a decline of seven per cent while its assets decreased six per cent to approximately Dh59.1 billion.

Alain Bejjani, CEO of Majid Al Futtaim, said despite the extraordinary events of 2020, the company’s full year performance demonstrated the resilience of “our people and business model, diverse portfolio, operational agility, proactive investments and prudent financial risk management.”

“The Covid-19 pandemic has not only been a financial crisis, but an even bigger crisis of trust,” Bejjani said in a statement.

During the second half of 2020, restrictions began to ease and there was a gradual recovery across various industries, as consumers gained confidence in public health measures implemented across markets in which the company operates.

“From the onset of the pandemic, Majid Al Futtaim adopted a stakeholder-first strategy. Amid government-mandated closures and lockdowns, Majid Al Futtaim decided to forego rent at its 27 shopping malls across five markets to ease the financial burden on its tenants, while stores were temporarily closed,” the company said.

Properties division registered a decline of 24 per cent in revenue and 21 per cent in Ebitda, standing at Dh3.5 billion and Dh2.3 billion, respectively. “The shopping malls business saw a decline in revenue due to temporary asset closures across the region, the proactive decision to forego tenant rent payments during closure periods and rent relief mechanisms to support tenants. During the second half of the year, the business experienced a gradual recovery in footfall as the economy started to reopen,” said the statement.

The company’s hotels experienced a 60 per cent drop in occupancy rates due to asset closures for a prolonged period, and reduced demand as a result of border closures, travel restrictions and lower capacity.

In 2020, the Carrefour business recorded a revenue decrease of 1.0 per cent standing at Dh28 billion, while its Ebitda grew by 14 per cent to Dh1.6 billion.

Retail’s online sales increased by 188 per cent across all markets, contributing 3.0 per cent of its total revenue in 2020. Majid Al Futtaim – Ventures experienced a 49 per cent decrease in revenue and a 122 per cent plunge in Ebitda in 2020, standing at Dh1.4 billion and -Dh92 million, respectively.

The group’s financial and liquidity position remains strong, with cash and available committed facilities covering its net financing needs for at least the next three years, said the statement. The debt maturity profile is light over the next couple of years, with no material debt maturity until 2023, and net debt position had reduced to Dh12.4 billion through rigorous focus on cash flow across the business, said the statement.

— issacjohn@khaleejtimes.com