Dubai-based mall developer Majid Al Futtaim reported its preliminary and unaudited operational and financial results for the full year 2015, showing consistent performance as the company prepares to implement further expansion across the region.
The company saw revenue grow by 8% to AED27.3 billion (FY 2014: AED 25 billion) while group EBITDA increased by 6%, reaching AED3.8 billion (FY 2014: AED3.6 billion). Performance was largely driven by continued investment in core businesses across Dubai and increased development activity in Egypt and Oman. The company continues to maintain a strong balance sheet with total assets valued at more than AED51 billion and a net debt of around AED9 billion.
“Majid Al Futtaim’s 2015 financial performance has demonstrated the strength and resilience of our business against a backdrop of a regional economic slowdown. We’ve achieved this by continually listening to our customers and evolving our offerings in line with their changing needs. During the past year, we enhanced our offering in Dubai, successfully completing a number of retail and leisure projects, including the 387,360 sqft expansion at Mall of the Emirates. The new expansion introduced a more luxurious VOX Cinemas experience, popular international retail brands, including Apple and Abercrombie & Fitch, and a range of new restaurants and cafés,” says Alain Bejjani, CEO of Majid Al Futtaim – Holding.
“We will continue to leverage our local experience and operational excellence across the region, in line with plans to create more great moments for more customers in more countries. With several large-scale developments currently in the pipeline in Saudi Arabia, Egypt and Africa, we are well positioned to fully leverage the significant growth potential of the Middle East and North/East Africa region.”
Operating company performance
Majid Al Futtaim Properties expanded its portfolio in 2015, reporting an increase in revenue of 7% to AED4 billion, while EBITDA rose by 9% to AED2.6 billion, contributing about 65% of the group’s EBITDA. Occupancy across all shopping malls remained strong at 98%. With completed expansions at Mall of the Emirates and City Centre Muscat and the opening of City Centre Me’aisem, the company welcomed 171 million customers throughout 2015, a 3% increase, as compared to full year 2014.
Although Majid Al Futtaim’s hotels experienced a decline in revenue per available room (RevPAR) of about 7%, it outperformed the broader hospitality market, which dropped by almost 10%. In 2015, the company completed the refurbishment of Kempinski – Mall of the Emirates and the opening of Hilton Garden Inn Dubai, Mall of the Emirates.
Majid Al Futtaim Retail business launched nine new Carrefour hypermarkets, 11 supermarkets and five convenience stores in 2015, strengthening its presence to more than 150 outlets in 13 countries across the Middle East, North Africa and Central Asia. Overall revenues increased by 7% year-on-year to AED22 billion. EBITDA rose by 2% to AED1.2 billion, driven primarily by entry into new markets, additional store openings in existing markets and improving competitiveness in the food department.
Majid Al Futtaim Ventures’ diverse portfolio of cinemas, leisure and entertainment, fashion, healthcare, consumer finance, food & beverage and facility & energy management reported strong financial performance, with overall revenues increasing by 34% to AED1.4 billion (AED 2.0 billion including joint ventures). With the launch of 58 new screens, VOX Cinemas was the fastest growing cinema chain in the region and saw a 40% increase in ticket admissions. The development of five new family entertainment centres (Magic Planet) saw the number of outlets rise to 22 across the region.
Further the company introduced six new leading global fashion brands to its portfolio, including Abercrombie & Fitch, lululemon athlethica, Monsoon, Accessorize, AllSaints and Peacocks, while opening four additional Lego Certified stores in the UAE and Kuwait. EBITDA increased by 22% to AED186 million, compared to the previous year.
Majid Al Futtaim’s expansion programmes are progressing as planned. Although the UAE remains the core focus for the company, it is on track to solidify its presence in Egypt, Saudi Arabia and Oman, and establish a stronger foothold in Africa and Eurasia through its Carrefour business.
The company announced plans to develop a second My City Centre, a 53,800 sqft mall in Al Barsha that is expected to be completed in Q3 2016.
In 2015, the company re-affirmed its five-year investment plan in Egypt, which is expected to create more than 144,000 direct and indirect employment opportunities and reflects the company’s commitment to expansion in the country. The plan includes the development of Mall of Egypt, which is set to open in Q3 2016 and will feature Ski Egypt and the country’s first VOX Cinemas. The investment plan also includes the development of City Centre Almaza, the third City Centre in Egypt, which is due to open in 2019.
Majid Al Futtaim is also expanding its presence with shopping mall concepts in Saudi Arabia.
In line with its long-term commitment to the wider region, the developer has established plans to expand in Africa. It will initially focus on development in Eastern and Southern African nations, with Kenya set to be the first destination for Carrefour in 2016.