Dubai: The Dubai headquartered retail and entertainment giant Majid Al Futtaim Group recorded revenue and profit drop in the first six months of 2024 brought on by 'macroeconomic headwinds from geopolitical instability and currency devaluations' in some of its operating markets.
Majid Al Futtaim, whose portfolio includes Mall of the Emirates and the luxury villa community Tilal Al Ghaf, had a 6 per cent decline on the revenue side to Dh16.7 billion; a 2 per cent decline in consolidated EBITDA to Dh2.1 billion; and a 6 per cent drop in net profit after tax to Dh1.6 billion.
When factoring in constant FX rates, the group revenue was 3 per cent lower, while EBITDA and net profit were up by 1 per cent in the same period. The group's asset base was valued at around Dh70 billion, a 2 per cent increase year-on-year as of end June.
“Majid Al Futtaim’s first-half year results continue to underscore the strength of our diversified portfolio, protecting overall profitability despite the challenges within some of our current operating environments," said Ahmed Galal Ismail, CEO of the holding company.
Another positive was that net borrowings were brought down to Dh14.6 billion, with 'most of its debt maturing 2027 onwards'.
Retail operations
Majid Al Futtaim Retail saw an 11 per cent year-on-year drop in revenues to Dh11.6 billion - and a 47 per cent year-on-year decline in EBITDA to Dh278 million. This was brought about by the 'declining basket size resulting from dampened consumer sentiment following geopolitical conflict in the region and the impact of currency devaluation in Egypt and Kenya'. (At constant FX rates, revenue would have declined by 8 per cent.)
Malls provide the booster
Its shopping malls' portfolio were 8 per cent higher in revenue growth and had 96 per cent occupancy.
The group owned hotels came up with an increase in revenue per available room (RevPAR) of 18 per cent, reflecting 'Dubai’s increasing appeal as a tourism hub as the city welcomed over 9 million overnight visitors in the first-half of 2024'.
The average occupancy, however, was down by 2 per cent. And in March, the Dubai based Group sold some of the non-core assets from its hospitality portfolio.
How did property contribute?
The property division overall had a strong 9 per cent growth in revenues to Dh3.7 billion 'primarily driven by Tilal al Ghaf development in Dubai as well as an increase in revenues from the group’s malls in the UAE. The EBITDA increased by 11 per cent to Dh1.9 billion. (At constant FX rates, revenue would have grown by 10 per cent and EBITDA by 13 per cent.)
What next for Majid Al Futtaim?
“The ongoing transformation of our retail digital business has enabled solid progress in advancing our omnichannel aspirations," said the CEO. "The appointment of new leadership in the second quarter is set to further strengthen Retail's performance through a turnaround plan focusing on market leadership through unrelenting customer-centricity.
“More broadly, for the remainder of the year the group's interests will continue to focus on strengthening its core, investing prudently to drive value creation for all stakeholders,” said Ismail.
