Majid Al Futtaim reports 12% rise in revenue in 2022, visitors to malls rise by 16%

Majid Al Futtaim has announced its audited operational and financial results for 2022.

The company’s consolidated revenue increased by 12 per cent to Dhs36.3bn.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew by 4 per cent to Dhs4.1bn, driven by the group’s operational performance, investments in digital transformation, data analytics and loyalty programmes.

Majid Al Futtaim benefitted from an increase in shopping malls footfall, higher hotel occupancy and admissions at cinemas, leisure and entertainment venues.

However, the group reported a 2 per cent decrease in net profit to Dhs2.4bn and continues to maintain a strong balance sheet, with assets valued at approximately Dhs66bn, up 9 per cent year-on-year, and net borrowings of Dhs14.2bn, it said in a statement.

ESG milestones

Majid Al Futtaim said it’s on track to meet its commitment to achieve a positive water and energy footprint by 2040 and eliminate single-use plastic in all its operations by 2025.

In addition, Majid Al Futtaim’s flagship shopping centres, Mall of the Emirates and Mall of Oman, received LEED Platinum certification, adding to the company’s green certified properties which now span 4 million square meters.

In September 2022, Majid Al Futtaim signed its second Sustainability-Linked Loan (SLL), structured as a $1.25bn revolving credit facility (RCF) tied to the Group’s environmental, social and governance (ESG) related targets, further reinforcing its commitment to achieving its ESG ambitions.

In addition, Majid Al Futtaim maintained the ‘Green Star’ status from the Global Real Estate Sustainability Benchmark  for implementing outstanding sustainability practices, strengthened by the progress made against its 2040 net positive commitment and greenhouse gas emissions validated this year by the Science-Based Targets initiative.

The group also maintained its low risk ESG rating by Sustainalytics.

Majid Al Futtaim companies’ highlights

Properties:  The company’s revenue increased by 43 per cent to Dhs5.8bn, while EBITDA grew 16 per cent to Dhs3bn. This was driven by robust performance across the hotels and communities’ businesses and the full year impact of City Centre Al Zahia in Sharjah and Mall of Oman in Muscat, which opened in 2021.

Shopping mall footfall increased 16 per cent to 212 million visitors, whilst tenant sales grew 11 per cent.

Meanwhile, Majid Al Futtaim Hotels portfolio revenue increased 48 per cent to Dhs671m. RevPAR (revenue per available room) and average occupancy increased by 50 per cent and 14 per cent, respectively.

In addition, real estate development Tilal Al Ghaf, recorded gross sales value of Dhs4.4bn during the year, whilst recognising revenue of Dhs1.8bn as construction progressed.

Majid Al Futtaim’s flagship lifestyle destination, @TilalAlGhaf, has secured the prestigious ‘BREEAM Excellent’ certification for its sustainable design, marking a significant achievement in our commitment to ESG, health, and net-zero goals. https://t.co/XtxG1fSqCi (1/5) pic.twitter.com/ZQA3XhafaF

— Majid Al Futtaim (@MajidAlFuttaim) February 28, 2023

Retail: The retail division reported a 7 per cent increase in revenue to Dhs28bn in 2022. Retail EBITDA declined 14 per cent to Dhs1.2bn.

The operating company has expanded its presence in the region, opening seven hypermarkets and 28 supermarkets across nine countries and bringing the total number of stores to more than 450.

Majid Al Futtaim Retail’s long-term investment in enhancing its omnichannel offering contributed to revenue growth from digital sales by 51 per cent year-over-year.

Entertainment: Thee company revenue increased 23 per cent to Dhs1.6bn while EBITDA grew 68 per cent to Dhs126m, primarily due to improved performance following the relaxation of occupancy restrictions and the release of strong movie content.

The signing of distribution rights with Warner Bros. Pictures, which was followed by securing distribution rights for Universal in 14 countries in the MENA region starting February 2023, is expected to fuel further growth for Majid Al Futtaim Entertainment.

Lifestyle: The company reported a revenue of Dhs801m, up 38 per cent year-on-year driven by a strong performance across its brands. The operating company realised EBITDA growth of 317 per cent to Dhs25m.

Overall, the group plans further expansion in high growth potential markets such as Saudi Arabia and Egypt, as well as in its home market, the UAE, amid a resurgence in consumer confidence.

Majid Al Futtaim financing

Majid Al Futtaim continues to maintain a strong financial and liquidity position. Following several refinancing actions taken through the year, the group’s debt maturity profile remains balanced, with a mix of capital markets and bank financing.

Against the backdrop of challenging macroeconomic conditions and volatile financial markets, in June 2022, the group tendered its outstanding hybrid notes of $500m with a first call date in September 2022 and replaced them with new green hybrid notes of $50m with a first call date in September 2027. This was the group’s first hybrid transaction in green format and the first green hybrid bond issued by a company in the MENA region.

The company’s credit rating has been maintained at ‘BBB’ with a stable outlook by both Standard & Poor’s and Fitch Ratings.

Ahmed Galal Ismail, CEO, Majid Al Futtaim – Holding, said: “Overall, Majid Al Futtaim delivered balanced growth through 2022. Positive contributions from across our portfolio, bolstered by the inherent strength of the UAE economy, have enabled the Group to achieve double digital revenue growth despite the ongoing macroeconomic challenges. The potential impact of these headwinds has been further lessened by the outstanding performance of our Properties portfolio, which has contributed 74 per cent of total EBITDA.

“We continue to uphold the values that constitute the Majid Al Futtaim institution, underpinned by solid financial standing and a robust balance sheet. We remain fully committed to delivering value-accretive profitable growth for our shareholders and contributing to the sustainable growth and prosperity of the MENA region.”

In other news, Majid Al Futtaim recently launched Mall of the Metaverse. The announcement was made along the sidelines of the World Government Summit.

Read: UAE’s Majid Al Futtaim launches Mall of the Metaverse

The mall is in the initial phase of development as the group looks “closely” at customers’ needs and expectations.

After multiple stages of testing, Dubai’s first virtual mall will open to visitors “who are seeking increased digital experiences across retail, entertainment and leisure offerings.” a statement said.

Inside the mall, customers’ avatars will find Carrefour, VOX Cinemas, THAT Concept Store, Ghawali and Samsung Store, “with many more brands and exciting features in the pipeline”.