Majid Al Futtaim, the prominent pioneer in shopping malls, communities, retail, and leisure across the Middle East, Africa, and Central Asia, has announced a significant increase in its financial performance for the year 2023. The retail major reported a 12% rise in net profit to Dh2.7 billion, showcasing its resilience and growth in a challenging economic landscape.
The company’s consolidated revenue saw a modest increase of one per cent to Dh34.5 billion, while Ebitda (Earnings Before Interest, Taxes, Depreciation, and Amortization) surged by 12% to Dh4.6 billion. These positive results underscore Majid Al Futtaim’s ability to generate robust cash flows and maintain a healthy balance sheet amidst evolving market dynamics.
Ahmed Galal Ismail, CEO of Majid Al Futtaim, emphasized the organization’s commitment to value-accretive, profitable growth. He attributed the strong financial performance to various factors, including the success of the properties business, robust growth in entertainment and lifestyle segments, and the promising outcomes of Majid Al Futtaim’s retail digital transformation.
Despite facing regional macroeconomic challenges such as currency devaluation in certain markets and geopolitical events shaping consumer behaviors, Majid Al Futtaim remains confident in navigating the path forward while delivering value to stakeholders in 2024 and beyond.
Key Highlights:
- Properties Business: Majid Al Futtaim’s properties segment witnessed impressive growth, with revenue soaring by 20% year-on-year to Dh6.9 billion. The success was attributed to record-breaking footfall and higher occupancy rates in UAE-based malls, along with solid performance from the Tilal Al Ghaf development.
- Retail Segment: While the retail segment reported a 4% decline in revenue on a restated basis to Dh24.7 billion, it saw significant growth in the Retail Digital business, with revenue increasing by 17% to Dh2.6 billion. Despite currency devaluations in certain markets and geopolitical tensions, the segment demonstrated resilience and adaptability.
- Entertainment and Lifestyle: The entertainment segment recorded a 7% increase in revenue to Dh1.8 billion, driven by the recovery of the cinemas business. Meanwhile, the lifestyle segment achieved a milestone by crossing the Dh1 billion revenue mark for the first time, with revenue increasing by 29% year-on-year.
Sustainable Impact:
Majid Al Futtaim continues to prioritize sustainability, launching a new phase of its Dare Today, Change Tomorrow sustainability strategy in 2023. The company is committed to achieving Net Positive status in carbon and water by 2040 and has made significant progress in reducing single-use plastic consumption and promoting sustainable practices.
Financial Position:
Despite increased net debt of Dh15 billion primarily due to investments in working capital, Majid Al Futtaim maintains a strong financial and liquidity position. The company retains its ‘BBB’ credit rating with a stable outlook from Standard & Poor’s and Fitch Ratings, reflecting its robust financial standing.
In summary, Majid Al Futtaim’s impressive financial performance in 2023 highlights its resilience, adaptability, and commitment to sustainable growth, positioning the company as a leader in the retail and leisure industry across the region.
