“The pandemic has undoubtedly affected us all,” stated Alain Bejjani, CEO of Majid Al Futtaim – Holding, as the company announced H1 results for the first six months of 2020. Large-scale business disruption, combined with a much more cautious consumer sentiment resulting from the COVID-19 pandemic, saw the group report revenue of AED17.3 billion and EBITDA of AED1.6 billion, representing declines of 3% and 27% respectively. The group’s assets decreased 4% to approximately AED61.8 billion.
The period presented two differentiated quarters, driven by the impact of the global COVID-19 pandemic. Majid Al Futtaim began the year performing above expectations across all its operating units. However, the second half of March saw the COVID-19 pandemic take hold, leading to temporary asset closures, travel and movement restrictions and supply chain challenges affecting companies globally. Despite these macroeconomic conditions, the company witnessed strong growth in its grocery retail business, with a 4% and 18% increase in revenue and EBITDA, respectively.
“The pandemic has undoubtedly affected us all,” Bejjani emphasised. “Over the years, we have built and maintained a sustainable and diversified business ready to withstand the headwinds in our industries. Backed by ongoing prudent financial management, an agile mindset and the unrelenting drive of our people, we were able to respond quickly to course correct, reduce our cost base and enhance our digital capabilities to meet the accelerated demand on multiple digital platforms. These measures enabled us to mitigate some of the impact of COVID-19 on our performance and maintain our ‘BBB’ rating, which bears testament to the resilience of our business model and financial health.”
“While the timeline for a full-scale recovery is still uncertain, we are witnessing a slow reopening of the economy. We will do our part to rebuild consumer trust that is so crucial to revitalising the economy. To achieve this, we must adapt to changing consumer needs and continue to ensure the highest standards of health and safety, while doubling down on our efforts to strengthen the industries and markets in which we operate,” he added.
From the outset of the pandemic, Majid Al Futtaim reinforced its engagement with all stakeholders, including working closely with governments in its operational markets. In the UAE, the company moved swiftly to adapt its business model, implementing global standards of health and safety and retraining more than 1,000 employees from the cinema and leisure business to support Carrefour, in order to cater to the exponential increase in online grocery retail demand. To further strengthen its customer-centric approach, Majid Al Futtaim entered into strategic partnerships to further improve the delivery of Carrefour online orders, including with the Department of Economic Development, Aramex and Dubai Taxi Corporation.
In order to support the local food economy and guarantee a sustainable supply chain, the company collaborated with the Ministry of Climate Change and Environment (MOCCAE) to boost the availability of locally grown produce across Carrefour UAE stores, by opening new distribution channels for more than 6,000 small and medium-sized local farmers and ensuring a sustainable supply of fresh fruit and vegetables across the country. It has also partnered with the UAE Government to launch Carrefour’s third hydroponic farm, which uses 90% less water and less space than traditional farms to deliver approximately 10 kg of fresh herbs and microgreens per day, equivalent to the yield of about one acre of farmland.
Amid lockdowns and government-mandated closures, the company decided to forego rents at its 27 shopping malls across five markets to ease the financial burden on its tenants while stores were temporarily closed. The company further accelerated its digital transformation journey to bolster its online capabilities to offer tenants and small businesses new and innovative platforms to reach their customers with the launch of Marketplace, Trends at Your Doorstep and THAT – its latest fashion app that will open a dedicated concept store at Mall of the Emirates later in 2020.
Going forward, During the second half of 2020, Majid Al Futtaim will continue to support sustainable economic development in its efforts towards economic recovery, while maintaining a disciplined financial management approach. The company will carry on its expansion plans in core markets, with new dates already announced for the opening of Mall of Oman and City Centre Al Zahia in Sharjah. Majid Al Futtaim – Retail will continue to expand its physical presence across existing markets. The company will also open three Carrefour supermarkets in Uzbekistan this year, marking the first entry of an international grocery retailer into the Central Asian country. In addition, Majid Al Futtaim – Ventures will open 55 new VOX Cinemas screens in the second half of 2020.