Majid Al Futtaim H1 revenues hit Dh15.6b

City Centre Al Zahia is the largest mall in the Northern Emirates
City Centre Al Zahia is the largest mall in the Northern Emirates

Issac John

Published: Mon 23 Aug 2021, 5:16 PM

Last updated: Mon 23 Aug 2021, 5:17 PM

Majid Al Futtaim, a leading Dubai-based conglomerate, announced on Monday a first-half 2021 net profit after tax of Dh662 million as its revenue plummeted 10 per cent to Dh15.6 billion.

The malls, retail and leisure operator said in a statement that the group had remained resilient and focused on adapting to customer needs despite the pandemic’s continued impact on its operating environment. It reported a two per cent rise in Ebitda (earnings before interest, tax, depreciation and amortization) of Dh1.6 billion.

In the first half, the group opened City Centre Al Zahia, the largest mall in the Northern Emirates. It recorded a gross sales value of Dh2.8 billion following the launch of two new project phases within the Tilal Al Ghaf community development in Dubai

The first half also saw a 25 per cent increase in Carrefour online sales and 50 per cent growth in number of orders versus the same period last year, said the statement.

Alain Bejjani, chief executive officer of Majid Al Futtaim - Holding, said that despite the prolonged impact of the pandemic, the group has delivered a robust performance “driven by prudent financial management and a diversified portfolio.”

“While we continue to feel impact from the continued disruption, our strong financial position has enabled us to remain resilient to that pressure and agile in how we respond to the stressors within our operating environment. This has enabled us to continue executing on delivery of our regional growth strategy,” said Bejjani.

He said over the first half of the year, the group has seen encouraging signs of recovery across its markets, as consumers gained confidence in resuming their pre-pandemic activities. “In addition to the increased activity across our physical assets, the acceleration of pre-pandemic trends – particularly as they pertain to digital capabilities – continues to gather pace. We remain committed to investing in all areas of our business to ensure we are well-positioned to best serve our customers’ evolving wants and needs.”

Bejjani said Majid Al Futtaim’s investment in sustainable growth opportunities continues unabated. In the face of behavioural changes brought about by last year’s pandemic, it remains on track to deliver on both its commitment to become net positive in water and energy by 2040 as well as its pledge to phase out single-use plastic across its operations by 2025.

Majid Al Futtaim – Properties registered a 6.0 per cent increase in revenue and a 6.0 per cent increase in Ebitda in the first six months of 2021, at Dh1.6 billion and Dh1.1 billion respectively.

The property division also continued to make progress with its pipeline of development projects. Mall of Oman is scheduled to open in September 2021. In doing so, it becomes Majid Al Futtaim’s fifth and largest shopping and entertainment destination in Oman, with 140,000sqm of retail space.

Hotel revenue stayed flat versus last year at Dh147 million, with average occupancy increasing by 16 per cent to 53 per cent, offset by a 2.0 per cent decline in RevPAR (Revenue Per Available Room). Meanwhile, the reduction in international visitors was offset by an increase in staycations.

The retail division registered a 12 per cent decline in revenue and a 12 per cent decline in Ebitda to Dh13.2 billion and Dh623 million respectively, mainly due to the challenging economic environment. “New variants and the measures taken by governments to curb infection rates continued to constrain operations and opening hours in certain geographies impacting Majid Al Futtaim retail’s results.”

The company opened 22 new Carrefour supermarkets and two hypermarkets across eight countries. Further investments include dark stores and additional logistics and delivery capacity to accommodate online orders. Online orders were up 50 per cent, online sales were up 25 per cent, and the value of transactions through SHARE, Majid Al Futtaim’s loyalty programme, experienced an increase of 27 per cent.

Majid Al Futtaim – Leisure, Entertainment and Cinemas registered a 25 per cent increase in revenue and a 64 per cent improvement in Ebitda despite operating at limited capacities and with curfews in certain countries. The increase in revenue is mainly due to a lower base in the prior period, when most sites remained shuttered as a result of government actions to contain the spread of Covid-19. Cinemas’ revenue improved by 22 per cent to Dh420 million, with admissions increasing by 9.0 per cent to 5.5 million. Cinemas continued its expansion into Saudi Arabia, growing the number of screens in the country by 17 to a total of 141 by the end of June.

More news from Local business