Majid Al Futtaim reports 15% increase in revenue in H1 2022

Majid Al Futtaim has announced its audit reviewed operational and financial results for H1 2022. Following a steady economic recovery in retail and leisure sectors, the Group reported a revenue of AED 18 billion, an increase of 15% compared to H1 2021. EBITDA rose 18% to AED 1.9 billion, a result of the company’s solid operational performance, driven by diversification efforts and a continued focus on cost efficiencies and scale. The Group continues to maintain a strong balance sheet with total assets valued at around AED 62.9 billion. Net borrowings stood at AED 11.2 billion.

“A strong, customer-focused strategy supported by unrivalled data and analytics capabilities has enabled Majid Al Futtaim to deliver sustained growth through H1 2022. Our efforts have been further amplified by MENA’s steady progress in moving beyond post-pandemic recovery as we collectively turn our efforts toward economic expansion and regional prosperity,” said Alain Bejjani, Chief Executive Officer of Majid Al Futtaim – Holding.

The growth delivered in the first half of the year is encouraging. While our region is not immune to building global inflation and supply chain pressures, Majid Al Futtaim remains optimistic towards the broader economic outlook. Our prudent financial discipline and strong governance ensures our resilience in the face of any immediate impact while ensuring we are well-positioned to remain focused on sustainable value creation.”

The Group continues to benefit from a sustained post-pandemic rebound in consumer confidence, as evidenced in increased shopping mall footfall, hotel occupancy rates, and admission to its cinemas and leisure and entertainment venues.

Retailing trends, such as the consumer demand for digital and omnichannel experiences, have continued to gather pace. The Group continues to be well-placed to capitalise on digital opportunities in order to invest, innovate and elevate its offering to meet evolving consumer wants and needs.

Majid Al Futtaim continues to take the necessary steps to mitigate any immediate inflationary impact stemming from supply chain strain while focusing on its long-term strategy of sustainable value creation.

Operating Company Performance

Majid Al Futtaim – Retail recorded a 9% increase in revenue, standing at AED 14.4 billion for 2022, while EBITDA fell 9% to AED 567 million.

The growth in retail is driven by the AED 268 million increases in revenue for LFL sites, and growth in digital sales of AED 453 million. H1 2022 revenue increase in comparison to H1 2021 is due to restored consumer purchasing power and higher tourism rates – a further result of loosened COVID-19 restrictions.

Continuing to expand its international footprint, Majid Al Futtaim also opened 18 new stores across its geographies. In line with the global transformation to digital retail services, the Group invested in the development of express commerce, seeing a 73% increase in digital sales. In addition, Majid Al Futtaim Retail opened the UAE’s first BIO store in January, featuring the retailer’s first ever café and an in-store hydroponic farm.

Majid Al Futtaim – Leisure, Entertainment and Cinemas (LEC) registered a 56% increase in revenue to AED 784 million and a rise in EBITDA to AED 33 million, largely due to the lifted operating capacity restrictions. Cinemas’ admissions increasing by 60% to 8.8 million. The strong results are a result of better performance in Q1 revenues, and better than expected performance of new content releases.

Majid Al Futtaim – Lifestyle registered a 42% rise in revenues to AED 360 million and EBITDA of AED 3 million, mainly driven by Lululemon’s international expansion and growth in sales for CB2, Abercrombie & Fitch, LEGO, AllSaints, and Crate & Barrel.

Future Investment

In its pursuit of being economically resilient during the second half of 2022, Majid Al Futtaim will continue to support sustainable economic development while adhering to a prudent financial management strategy. Majid Al Futtaim is wholly committed to the markets in which it operates, working to deliver exceptional experience not just for its customers but tenants, employees and its key stakeholders. The business will also look at investing on corporate initiatives including digital transformation, data and analytics, customer experience and loyalty programmes. Majid Al Futtaim – Retail will reinforce its leadership position in core markets and will continue to invest and scale up its omnichannel presence, enhance its network of stores and grow its food and health businesses to meet consumers’ evolving needs.