Majid Al Futtaim’s preliminary and unaudited operational and financial results for the first half of 2015 reflect sustainable growth in revenue, up 7% compared to the corresponding period last year. EBITDA remains stable at AED 1.8 billion, reflecting higher promotional activities, costs associated with new market entries, product mix impact and a softer market in the hospitality industry.
Operating company performance
Majid Al Futtaim Properties: Majid Al Futtaim Properties reported revenue of AED 2 billion with EBITDA at AED 1.2 billion, stable versus the previous year. The occupancy across the shopping malls portfolio remained strong at 97%. The company’s malls welcomed 85 million visitors through the period, with a 2% growth in footfall versus 2014 first half levels, impacted mainly by the redevelopment currently underway to expand the company’s flagship property – Mall of the Emirates. Year-to-date occupancy rates were 77% for comparable hotels, but the revenue per available room decreased by 11% from prior levels reflecting softening market conditions during the first half of the year.
Majid Al Futtaim Retail: Carrefour saw sales up around 7% year-on-year, to AED 11.2 billion in H1 2015. The business’s EBITDA rose by over 3% to AED 563 million, impacted by one-time costs associated with new market entries and additional store openings in existing markets. In the first half of 2015, Majid Al Futtaim Retail opened 15 new Carrefour stores, expanding its portfolio to 143 outlets in 13 countries across the Middle East, Central Asia and North Africa.
Majid Al Futtaim Ventures: In the first half of 2015, the diverse group of businesses achieved strong operational growth with revenue increasing by 21% to AED 609 million. The companies complement the core business, with a leading presence in cinemas, leisure and entertainment as well as financial services, fashion and healthcare. EBITDA for the year-to-date was at AED 56 million.
“This is a transformational year, two decades since the launch of City Centre Deira, and we are positioning the business for accelerated development and sustainable growth. During the first half of 2015 the company announced its future strategy to drive its ambitious expansion and growth plans. On the back of a strong 2014 we are progressing well,” shares Alain Bejjani, CEO of Majid Al Futtaim Holding.
“Building on our core competencies, we are also focused on ensuring robust internal systems are in place to enable us to cement and advance our leadership position in all of our markets, and export our operational excellence to new geographies,” he adds. “We are making investments in our human capital development with our new proprietary internal educational enterprise – The Majid Al Futtaim Leadership Institute, as well as continuing to lead the region on corporate governance and sustainability.”
Further Majid Al Futtaim’s ongoing investments in Dubai continue with AED 267 million worth of investment for phase one of the new City Centre Me’aisem. This will be the company’s sixth City Centre in the UAE, located in the International Media Production Zone (IMPZ) and is expected to open in September 2015. The seventh – City Centre Shindagha – is also planned to open by the end of the year. Plans have also been announced for a second My City Centre, a 53,820-sqft mall that will serve communities in Al Barsha that is scheduled for completion in Q3 2016.
The second phase of the much-anticipated 269,100 expansion at Mall of the Emirates is on track for completion in Q4 2015 and will include a new major Vox Cinema experience, fresh retail anchor stores as well as boutiques and a variety of dining choices.
Majid Al Futtaim also launched Al Zahia, Sharjah’s first-ever gated mixed-use community for Sharjah Holding, a strategic partnership between Majid Al Futtaim and the Government of Sharjah.
“Several large-scale projects are currently under construction in both existing and new markets. Significant opportunities lie ahead as our brands continue to provide innovative experiences to customers. Dubai remains the core of our business and we are expanding our presence in Egypt, Saudi Arabia and Oman, in addition to looking to establish a foothold in Africa and Eurasia,” Bejjani reveals.
In March Majid Al Futtaim announced an increase in total investments in Egypt from EGP18 billion to EGP22.5 billion (AED 8.4 billion to AED 10.5 billion) as part of its existing five-year plan. The plan includes multiple investments throughout the country across all of its businesses, including the Ski Egypt development at the Mall of Egypt – a first for the continent of Africa – as well as the introduction of Vox Cinemas to the Egyptian market. In addition, there has been further progress on lucrative land banking opportunities in Saudi Arabia.
Following the successful completion of phase one, Majid Al Futtaim also commenced phase two of its OMR 27 million (AED 254 million) redevelopment of City Centre Muscat.
The company’s varied portfolio of leading international retail brands continues to grow as well with the announcement of plans to bring lululemon athletica and Peacocks to consumers across the MENA region. Additional global brand names will be announced later this year. Majid Al Futtaim Retail continues to expand its presence across the region with plans to open an additional 18 Carrefour stores before year end.
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