Majid Al Futtaim Reports Strong Financial Growth Ahead of Planned Regional Expansion
Note: The following information is a trading statement based on unaudited management accounts for Half Year ended 30 June 2016.
Overall group revenue up 11% year-on-year to AED 15.2 billion for H1 2016
EBITDA up 7% year-on-year at AED 1.9 billion
Commenced construction of the 103,000 sqm City Centre Almaza, Cairo
Commenced construction of Aloft Hotel, City Centre Deira
Expanded the Carrefour network, with eleven new stores including our first hypermarket in Kazakhstan
Entry into Sub-Saharan Africa with the opening of the first Carrefour hypermarket in Kenya
Opened first outdoor VOX Cinemas concept and refurbished VOX Cinemas at City Centre Deira
City Centre Me’aisem awarded Green Commercial Building of the Year by Emirates GBC Awards Programme
Launched Tomouhi, the company’s new Graduate Management Development Programme
BBB credit rating reaffirmed by Standard & Poor’s and Fitch
Dubai, 3 August 2016: Majid Al Futtaim, the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa (MENA), has today released its preliminary unaudited financial results for the first six months of 2016. The company saw revenue grow by 11% to AED 15.2 billion (H1 2015: AED 13.7 billion) while EBITDA increased by 7%, reaching AED 1.9 billion (H1 2015: AED 1.8 billion). The company continues to maintain a strong balance sheet with total assets valued at AED 52 billion and a net debt of around AED 10 billion.
Alain Bejjani, Chief Executive Officer of Majid Al Futtaim Holding, said: “We have delivered another sustained period of growth during the first half of 2016 by continuing to raise the bar when it comes to customer experience, while expanding our geographical footprint. For the first time, we have entered into sub-Saharan Africa and Kazakhstan through Carrefour and have expanded our leisure, entertainment and fashion businesses across markets.
Our financial results during the first half once again show the resilience of our business model despite softening economic conditions. 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. This approach will not only position our company for further growth in the future, but will ensure we continue to support economic development across the MENA region.”
Operating Company Performance
Majid Al Futtaim Properties: Majid Al Futtaim Properties reported an increase in revenue of 11% to AED 2.2 billion for the first half of 2016, while EBITDA rose by 12% to AED 1.4 billion. Occupancy across all shopping malls remained strong at 98%. Majid Al Futtaim’s comparable hotels recorded occupancy rates of 77% and experienced a decline in revenue per available room (RevPAR) of about 11% versus the first half of 2015, despite outperforming the broader hospitality market which dropped by about 13% for the same period. In April 2016, the Aspen Chalets at the Kempinski Mall of the Emirates were opened to the public and in June construction work commenced on the Aloft Dubai City Centre Deira, which is expected to be completed in 2018.
Majid Al Futtaim Retail: Majid Al Futtaim Retail launched eleven new stores, strengthening its presence to more than 160 outlets in 15 countries across the Middle East, Africa and Central Asia. Overall revenues increased by 9% year-on-year to AED 12.3 billion, while EBITDA rose by 2% to AED 582 million. This was driven primarily by entry into new markets, including the opening of its first Carrefour hypermarkets in Kenya and Kazakhstan, as well as additional store openings in existing markets.
Majid Al Futtaim Ventures: The company’s diverse portfolio of cinemas, leisure and entertainment, fashion, healthcare, consumer finance, food and beverage, and facility and energy management businesses reported strong financial performance, with overall revenues increasing by 43% to AED 870 million. EBITDA for the year-to-date was at AED 56 million. Cinemas opened nine new screens, expanded VOX THEATRE by Rhodes and opened its first outdoor cinema concept. In leisure and entertainment, one new Magic Planet and one new Lego store were opened.
"In response to the opportunities that we have identified across the region, we continue to progress with a series of new developments which will enhance our offering and deliver even more great moments for everyone, every day. We plan to open our second My City Centre neighbourhood retail concept in Al Barsha, Dubai and Mall of Egypt, the company’s flagship project in Egypt, in the second half of the year. In addition, Majid Al Futtaim Retail plans to expand our Carrefour franchise presence across our geographical footprint with the opening of 15 additional stores by the end of 2016,” added Bejjani.
Majid Al Futtaim is also progressing with its recently announced long term investment plans in the UAE, Saudi Arabia Egypt and Oman. These include new shopping mall developments in Dubai, Abu Dhabi, Riyadh, Cairo, and Muscat, as well as hotels and mixed-use communities.
The company continues to maintain a very strong financial and liquidity position covering its net financing needs of the next two years through its cash and available committed lines.
In July 2016, the company raised USD 300 Million with a tap issue on its existing 2024 bonds, extending the average life of the company’s debt portfolio and further improving its balanced debt maturity profile.
Standard & Poor’s and Fitch have reaffirmed the company’s credit rating at BBB with a stable outlook during the year, reiterating its credit strengths such as quality of assets, strong corporate governance and prudent financial management.