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Majid Al Futtaim, a leading shopping centre, community, retail and leisure pioneer, saw its first-half (H1) EBITDA (earnings before interest, tax, depreciation and amortisation) increase 18% to AED 1.9 billion (US$ 520 million). The group’s revenue rose 15 percent to AED18 billion during the period.
Revenue growth was attributable to a steady recovery in retail and leisure, while EBITDA rose was attributable to the company’s solid operating performance, supported by diversification efforts and continued focus on cost efficiency and scale.
The group continues to maintain a strong balance sheet with a total asset value of approximately AED62.9 billion. Net borrowing was AED11.2 billion.
customer-centric strategy
Alain Bejjani, Chief Executive Officer of Majid Al Futtaim – Holding said: “A strong, customer-centric strategy underpinned by unparalleled data and analytics capabilities enables Majid Al Futtaim to achieve sustained growth in the first half of 2022. Our efforts further Expanded The MENA region has made steady progress beyond the post-pandemic recovery as we collectively pivot our efforts towards economic expansion and regional prosperity.
“The growth achieved in the first half of the year is encouraging. While our region is not immune to global inflation and supply chain pressures, Majid Al Futtaim remains optimistic about the broader economic outlook. Our prudent financial discipline and strong Governance ensures our resilience in the face of any immediate impact, while ensuring we are well-positioned to remain focused on sustainable value creation.”
The group continues to benefit from the continued rebound in consumer confidence post-pandemic, reflected in increased shopping centre foot traffic, hotel occupancy and attendance at cinemas and leisure and entertainment venues.
grab the chance
Retail trends, such as consumer demand for digital and omnichannel experiences, continue to gather pace. The group continues to be well-positioned to capitalize on digital opportunities to invest, innovate and enhance its offerings to meet changing consumer demands.
Majid Al Futtaim continues to take the necessary steps to mitigate any immediate inflationary impact of supply chain tensions, while focusing on a long-term strategy for sustainable value creation.
Operating company performance
Shopping center tenant sales increased by 21% year-on-year, and foot traffic increased by 20% year-on-year to 100 million. Meanwhile, revenue from the hotel portfolio grew to AED333 million in 2021 from a lower base due to capacity constraints. RevPAR (revenue per available room) and average occupancy climbed 142% and 43%, respectively.
The new community launched at Tilal Al Ghaf is still well received by the market. Released in February and May respectively, the Araya Beach project and Elysian Mansions, comprising ultra-luxury mansions and luxury villas, recorded sales of more than AED2.4 billion, with 181 units sold as of June 30.
Majid Al Futtaim – Retail revenue rose 9% to AED14.4 billion in 2022, while EBITDA fell 9% to AED567 million.
Well done LFL website
Growth in retail was boosted by LFL’s website revenue growth of AED268 million and digital sales up by AED453 million. Compared with the first half of 2021, the higher revenue in the first half of 2022 was due to the recovery of consumer purchasing power and higher tourism rates – a further result of the easing of Covid-19 restrictions.
Majid Al Futtaim continues to expand its international presence, opening 18 new stores across its regions. In line with the digital transformation of global retail, the Group invested in the development of express delivery business, and digital sales increased by 73%. Additionally, Majid Al Futtaim Retail opened the UAE’s first BIO store in January, which includes the retailer’s first cafe and an in-store hydroponic farm.
LEC revenue up 56%
Majid Al Futtaim – Leisure, Entertainment and Cinema (LEC) revenue rose 56% to AED784 million and EBITDA rose to AED33 million, mainly due to the removal of operational capacity constraints.
Movie theater admissions rose 60 percent to 8.8 million. The strong results were the result of better revenue performance in the first quarter and better-than-expected performance of new content releases.
Majid Al Futtaim – Lifestyle grew revenue by 42% to AED360 million and EBITDA to AED3 million, mainly due to Lululemon’s international expansion as well as CB2, Abercrombie & Fitch, LEGO, AllSaints and Crate & Barrel sales growth.
future investment
To maintain economic resilience in the second half of 2022, Majid Al Futtaim will continue to support sustainable economic development while adhering to a prudent financial management strategy. Majid Al Futtaim is fully committed to the markets in which it operates and is committed to delivering an exceptional experience for its clients, tenants, employees and its key stakeholders. The business will also consider investing in enterprise initiatives, including digital transformation, data and analytics, customer experience and loyalty programs.
Majid Futtaim Properties continues to make progress on its pipeline developments, including the redevelopment of the Mall of the Emirates and the Saudi Mall.
Majid Al Futtaim – Retail will solidify its leadership in its core markets and will continue to invest and expand its omni-channel business, strengthen its store network and grow its food and wellness business to meet the changing needs of consumers.
financing
Majid Al Futtaim’s solid balance sheet enables it to maintain a strong financial and liquidity position as market conditions recover steadily. The company’s debt maturity profile remains light, with no major debt maturities until May 2024.
Despite challenging macroeconomic conditions and financial market volatility, the group tendered its $500 million outstanding hybrid notes in June 2022, with a first redemption date of September 2022, with a new $500 million green hybrid note Instead, the first redemption date is September 2027. This is the group’s first green hybrid transaction and Mena’s first green corporate hybrid transaction.
For the 11th consecutive year, the company’s credit rating was maintained at “BBB” by Standard & Poor’s and Fitch with a stable outlook. The ratings reaffirm the company’s credit strength, business model resilience, asset quality, strong corporate governance and prudent financial management. — arab trade news agency
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