Note: The following information is a trading statement based on unaudited management accounts for Half Year ended June 2014.
Overall group revenue up 14% year-on-year to AED 12.8 billion for H1 2014
EBITDA up 13 % year-on-year to AED 1.8 billion for H1 2014
Successful opening of the Mall of the Emirates Fashion District
Vox Cinemas launched 17 new screens at City Centre Muscat and City Centre Qurum, Oman
Added 12 new Carrefour stores, taking the total to 121 outlets
Issued its first 10 year USD $500 million bond
City Centre Bahrain
Dubai: Majid Al Futtaim today reported its preliminary and unaudited operational and financial results for the first half of the year 2014, confirming strong performance across its businesses.
“The first half of 2014 displayed another period of robust growth for us and even more importantly it happened on the back of a strong 2013,” said Iyad Malas, Chief Executive Officer – Majid Al Futtaim Holding LLC.
The company’s revenues were up 14 per cent compared to the first half of last year. Also, its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) from recurring operations increased by 13 per cent to Dh 1.8 billion.
Majid Al Futtaim’s performance in the first half of the year is credited to the growth across its three business segments, Retail, Properties and Ventures.
Business Units’ Performance
Properties, MENA’s leading diversified real estate and property services company, saw its revenue increase by a strong 10% to AED 1.9 billion and EBITDA rise by around 12% to AED 1.2 billion. The company’s malls saw footfall of 83 million through the period, an increase of 6 % from 2013 first half levels, while revenue per available room at the company’s 11 hotels increased by 15 % from prior levels, with year-to-date occupancy rates of over 80%.
Retail, the business unit that owns and operates the Carrefour franchise, saw sales up about 15% year-on-year, to AED 10.5 billion in H1 2014. The business’s EBITDA rose by 21% to AED 553 million. In the first half of 2014, Majid Al Futtaim Retail opened 12 new Carrefour stores, expanding its portfolio to 121 outlets in 12 countries across the Middle East, Central Asia and North Africa.
Ventures is a diverse group of companies that complement the core business via a leading presence in cinemas, leisure and entertainment, as well as businesses in financial services, fashion and healthcare. In the first half of 2014, Ventures achieved strong operational growth with revenue increasing by 21% to AED 506 million. EBITDA for the year was at AED 63 million, an increase of around 13% driven by the investments made for future growth.
Expansion plans
Several large scale projects are currently under construction in both existing and new markets.
Majid Al Futtaim’s ongoing investment plan in Dubai is well under way, with the successful opening of the Mall of the Emirates’ Fashion District and commencement of Phase 2 which will see the mall expand by a gross leasable area of 25,000m2 to include the introduction of a new major VOX Cinemas experience, fresh retail anchor stores as well as boutiques and a diversity of dining choices. Additionally, Majid Al Futtaim introduced ‘My City Centre’, a new brand of neighborhood retail concepts, with the first opening in Nasseriya, Sharjah. The company also announced a new shopping mall in Dubai at International Media Production Zone and commenced construction on Hilton Garden Inn, Majid Al Futtaim 10th hotel in Dubai.
Mr. Malas commented, “We continue to make significant progress with growth in the retail and leisure markets across the region. In the first half of 2014, we received official endorsement from Egypt’s Government for our multi-billion Egyptian pound investment plan, we progressed on lucrative land banking opportunities in Saudi Arabia, and the first anniversary of Beirut City Centre was held under the patronage of President Michel Sleiman. While Dubai remains the core of our business, these cornerstones in Majid Al Futtaim’s investment strategy in Egypt, Saudi Arabia and Lebanon underlines our confidence in these countries to become investment hubs capable of accommodating major commercial and touristic projects. We are continuing our organic expansion plans focusing on our commitment to create great moments for everyone everyday, with careful attention to quality, with responsibility to community and last but not least, prudent financial and risk management approach, which is typical of Majid Al Futtaim.”
Financing
Majid Al Futtaim issued its first 10 year USD$500 million bond in May 2014. This was the first 10 year issuance out of Dubai since 2010; and the longest tenure achieved by a Dubai corporate issuer. The issuance capitalised on the investor education and company’s credibility built over the last couple of years and was a successful intraday execution.
Commenting on the deal, Shrimati Damal, Head of Treasury, Majid Al Futtaim Holding said, “In line with our previously stated goals, this issuance was directed at lengthening the average life of the company’s debt and enabling further portfolio optimization. It has allowed us to build a credit curve for the company, creating a market reference for future financing. Hence it was a significant milestone for the company”.
The company continues to be positioned strongly on liquidity with more than 2 years of gross financing needs covered through its cash and available committed lines. Both Fitch Ratings and Standard & Poor’s reaffirmed the company’s rating at BBB with stable outlook during the year.
Majid Al Futtaim has been the recipient of several awards recently including, “Most Innovative Bond” by EMEA Finance and “Middle East Deal of the Year” for the Perpetual Notes issued in October 2013, and “Most Innovative Treasury” by Global Capital in 2014.
About Majid Al Futtaim:
Founded in 1992, Majid Al Futtaim is the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa (MENA).
A remarkable business success story, Majid Al Futtaim started from one man’s vision to transform the face of shopping, entertainment and leisure, and to create great moments for everyone, every day. It has since grown into one of the United Arab Emirates’ most respected and successful businesses spanning 12 international markets, employing over 26,000 people, and achieving the highest credit rating (BBB) among privately-held corporates in the Middle East.
Majid Al Futtaim owns and operates 17 shopping malls, 11 hotels and three mixed-use communities in MENA, with further developments underway in the region. This includes Mall of the Emirates, City Centre malls, and also 4 community malls which are in joint venture with the Government of Sharjah. It holds exclusive rights to the Carrefour franchise in 19 markets across MENA and Central Asia, operating a portfolio of over 50 hypermarkets and over 60 supermarkets in 14 countries.
Majid Al Futtaim operates 109 VOX Cinemas screens and 16 Magic Planets across the region in addition to iconic leisure and entertainment facilities such as Ski Dubai and iFly Dubai among others. Majid Al Futtaim is parent to the consumer finance company issuing ‘Najm’ credit cards, a fashion retail business representing international brands such as Abercrombie & Fitch, Juicy Couture and Halston Heritage and a healthcare business. In addition, it also has a joint venture operation with Dalkia and has recently expanded into food & beverage in partnership with Gourmet Gulf.