Majid Al Futtaim has announced a net profit of Dhs1.6 billion for the first half of 2024, despite facing a challenging macroeconomic environment characterized by regional geopolitical conflicts and foreign exchange devaluations. The group’s assets saw a 2% year-on-year growth, underscoring its resilience and adaptability.
Financial Performance Overview
The group’s revenue for the first half of the year declined by 6% to AED16.7 billion, while EBITDA fell by 2% to Dhs2.1 billion. When adjusted for constant currency rates, the group’s revenue decreased by only 3%, with EBITDA and net profit showing a modest increase of 1%.
Ahmed Galal Ismail, CEO of Majid Al Futtaim – Holding, commented on the results: “Our 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.”
Key Drivers of Performance
- Majid Al Futtaim Properties: The property division delivered a record performance, with a 9% increase in revenue to AED3.7 billion and an 11% rise in EBITDA. This success was largely driven by the strong performance of UAE-based shopping malls and robust sales from residential projects such as the newly launched Ghaf Woods in Dubai, which sold out its first phase within a week.
- Retail Segment: The retail business faced a decline, with an 11% drop in revenue to AED11.6 billion, influenced by weaker consumer sentiment and currency devaluation in key markets like Egypt and Kenya. However, the retail digital business demonstrated significant growth, with revenue up by 16% and EBITDA surging by 109% year-on-year.
- Entertainment and Cinema: The group’s cinemas portfolio saw a 3% increase in admissions year-on-year, contributing to a strong EBITDA growth of 103% for the period. The expansion included the opening of three new screens in Saudi Arabia, featuring the launch of the multiplex at Jeddah Park by VOX Cinemas.
- Hospitality: Revenue per available room (RevPAR) increased by 18% year-on-year, reflecting Dubai’s growing appeal as a tourism hub, with the city welcoming over 9 million overnight visitors in the first half of 2024. However, average occupancy rates dipped by 2%, and the group sold several non-core assets from its hospitality portfolio in March.
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Strategic Initiatives and Outlook
Majid Al Futtaim has focused on transforming its retail digital business, which has advanced its omnichannel capabilities. The appointment of new leadership in the second quarter is expected to further strengthen the retail segment through a turnaround plan aimed at market leadership and enhanced customer-centricity.
The group has maintained a strong credit profile, with both Standard & Poor’s and Fitch Ratings affirming its BBB rating for the 12th consecutive year. Additionally, Majid Al Futtaim sustained a low-risk ESG rating from Sustainalytics, highlighting its commitment to sustainability and responsible business practices.
Majid Al Futtaim’s diversified portfolio and strategic focus on high-performing sectors like properties and digital retail have enabled it to navigate a complex economic landscape while continuing to deliver solid financial results.
