Majid Al Futtaim to pursue projects on earnings optimism

Majid Al Futtaim (MAF), the conglomerate behind Mall of the Emirates, plans to forge ahead with expansion projects after reporting a 7 per cent increase in its first half earnings.

The conglomerate, which operates 19 shopping malls, said last year it planned to double in size within five years as it boosts investments across the Arabian Gulf countries and Egypt. “Going forward, we will press ahead with our expansion plans, while developing our business in existing and new markets when the right opportunities are identified and with a continued commitment to our prudent financial and risk management approach,” said the chief executive Alain Bejjani in a statement on Wednesday.

Earnings before interest, taxes, depreciation and amortization (ebitda) rose 7 per cent to Dh1.9 billion in the first half of this year, compared with Dh1.8bn in a year-earlier period, the company said. First-half revenue rose 11 per cent to Dh15.2bn from Dh13.7bn a year earlier. The company didn’t publish profit figures.

“Our financial results during the first half once again show the resilience of our business model despite softening economic conditions,” said Mr Bejjani.

The conglomerate announced in June Dh30bn of investments in the UAE, which is likely to be in place by the time Dubai’s Expo 2020 takes place.

The group revealed plans to open 10 new City Centre malls, six hotels, 28 cinemas, 40 Carrefour supermarkets and a 740,000-square metre master planned community over the next 10 years, in a move that will generate about 170,000 direct and indirect jobs.

MAF, which built the indoor ski slope in Mall of the Emirates, is launching a similar slope in Saudi Arabia as part of 14bn Saudi riyal (Dh13.70bn) investment in the kingdom.

In Oman, MAF announced in May, a further Dh5bn investment over the next four years.

MAF is also bullish about Egypt, having announced last year its plan to increase investment in the North African country to 22.5bn Egyptian pounds (Dh9.30bn) from 18bn pounds.

MAF, which has exclusive rights to the Carrefour supermarket franchise in 38 markets across the Middle East, Africa and Central Asia, entered sub-Saharan Africa this year with a Carrefour in Kenya.

In June, Dubai was ranked by the consultancy JLL as the fourth-most attractive market in the world for retailers, behind London, Hong Kong and Paris. Abu Dhabi was ranked 11th globally.

JLL said that Dubai already has one of the highest per-capita levels of retail space in the world, as it has developed a reputation as a shopping tourism destination

First-half ebitda of MAF’s properties division, its biggest earner, rose 12 per cent to Dh1.4bn, while revenue grew 11 per cent to Dh2.2bn.

Occupancy across its malls held steady at 98 per cent.

Meanwhile, occupancy at its hotels reached 77 per cent, but revenue per available room (revPAR) – a key industry indicator – dropped 11 per cent in the first half from a year-earlier period.

Ebitda of the company’s retail division, which covers 15 countries, posted a 2 per cent increase to Dh582m in the first half, while revenue rose 9 per cent to Dh12.3bn.

Ebitda of the company’s ventures division was Dh56m in the first half. MAF didn’t provide a comparative figure for the same period last year. First half revenue increased 43 per cent to Dh870m.

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