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Alain Bejjani

Majid Al Futtaim 2018 revenue up 8pc to $9.4bn

DUBAI, January 30, 2019

Majid Al Futtaim, a leading shopping mall and leisure pioneer, said that during 2018 group revenue grew by eight per cent reaching Dh34.6 billion ($9.41 billion), while ebitda increased by nine per cent year-on-year to Dh4.6 billion.

The company continued to maintain a strong balance sheet with total assets valued at Dh60.4 billion and a net debt of around Dh12.6 billion, it added.

Majid Al Futtaim’s sustained financial growth was driven by the expansion and diversification efforts across various geographies and by adopting a culture of operational excellence that promotes cost optimisation and efficiency.

Alain Bejjani, chief executive officer of Majid Al Futtaim Holding, said: “2018 has been a year of growth for our company, despite the macroeconomic challenges that affected consumer sentiment. Our strategy to diversify our offering and geographical presence, as well as our commitment to customer centricity and technology investments has yielded great results.”

Operating company performance

Majid Al Futtaim Properties: Majid Al Futtaim Properties registered one per cent revenue growth to end the year at Dh4.6 billion. EBITDA increased by two per cent to Dh3.0 billion, contributing almost 65 per cent of overall group EBITDA. Revenue from shopping malls increased by three per cent and the growth was attributed to lease renewals at higher rates and the impact of opening Mall of Egypt.

Majid Al Futtaim’s shopping malls welcomed 192 million customers during the year, a four per cent increase, as compared to 2017. Total shopping mall occupancy stood at 95 per cent.

Majid Al Futtaim Properties celebrated the opening of My City Centre Al Dhait in Ras Al Khaimah, UAE, its first investment into the Emirate’s fast-growing community, and My City Centre Sur, Majid Al Futtaim’s first community mall in Oman. In addition, the company’s hotel portfolio grew to 13 hotels with the launch of Aloft City Centre Deira in Dubai bringing residents and visitors a one-of-a-kind movie-themed suites experience.

Majid Al Futtaim hotels experienced a decline in revenue per available room (RevPAR) due to current market conditions and reported average occupancy of 75 per cent.

On the sustainability front, the company continues to make headway towards its net positive commitment in carbon and water by 2040. In 2018, Majid Al Futtaim commissioned three additional solar power plants in Mall of the Emirates, City Centre Sur and City Centre Al Dhait. Currently, five of Majid Al Futtaim shopping malls generate more than 2.900 GWh renewable energy from solar power, saving over 1,700 tonnes of CO2 emissions a year - the equivalent of taking 371 cars off the road for one year, saving up to Dh1.4 million on energy costs per year.

Majid Al Futtaim Retail: Majid Al Futtaim Retail generated strong revenue growth and finished the year at Dh28.0 billion, an 8 per cent increase compared to 2017, driven by the addition of new stores. EBITDA increased by 16 per cent to Dh1.4 billion, largely attributable to cost optimisation initiatives and higher sales in Egypt, Saudi Arabia, Kuwait and Kenya.

The Carrefour brand continues to cement its position as the largest grocery retailer in the region, increasing its market share by opening 33 new Carrefour hypermarkets and supermarkets during 2018, including the brand’s seventh store in Kenya. Majid Al Futtaim Retail also launched Carrefour’s largest distribution centre in the region, located in Dubai.

In 2018, Majid Al Futtaim Retail made significant strides on its digital agenda. Carrefour enhanced its digital presence by offering an extensive range of groceries online, in addition to Carrefour Now which offers an express 1-hour delivery service. Carrefour also introduced a number of innovative concepts and services across its network to ensure an effortless customer journey, including Scan and Go and Valet Trolley.

Majid Al Futtaim Ventures: Majid Al Futtaim Ventures’ revenue increased by15 per cent in 2018 to Dh2.4 billion (Dh3.2 billion including joint ventures and associates). The diverse portfolio of cinemas, leisure and entertainment, fashion, consumer finance, food and beverage and facility and energy management reported an increase in EBITDA of 24 per cent to Dh319 million, driven by cinemas and growth from new sites.

VOX Cinemas continued its successful expansion across the region with 52 new screens added to reach 353, including in Egypt, Bahrain and Kuwait where the business strengthened its core presence. In April 2018, VOX Cinemas opened its first multiplex theatre in Riyadh Park shopping mall in Saudi Arabia, following the reintroduction of cinemas in the kingdom.

Ongoing investments

The company continues to make progress with its development projects and will be bringing three key shopping malls to market in Oman, UAE and Egypt this year, with the launch of City Centre Suhar, My City Centre Masdar and City Centre Almaza, respectively.

Majid Al Futtaim Retail continues with the expansion of its network, both physically and digitally, leveraging on its strategic partnerships in the last mile delivery space to enhance the customer experience.

In January 2019 Majid Al Futtaim Ventures opened its first theatre in Jeddah and second in the kingdom, with plans to open its third location next month in Riyadh Al Qasr Mall. These openings pave the way for the company to fulfil its ambitious plan to open 600 screens in the kingdom by 2023. – TradeArabia News Service




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