MAF makes expansion plans as earnings rise by 8 per cent

Majid Al Futtaim (MAF), the conglomerate behind Mall of the Emirates, is forging ahead with expansion plans after registering an 8 per cent increase in earnings last year thanks to broad-based growth.

Earnings before interest, taxes, depreciation, and amortization (Ebitda) rose to Dh4.1 billion, while revenue grew 9 per cent to Dh29.9bn, the group said in a statement yesterday.

MAF, which operates 20 malls, attributed revenue growth to the opening of new hypermarkets, supermarkets and family entertainment centres across the company’s geographic reach.

The company will carry forward plans to expand in markets including the UAE, Egypt, Oman and Saudi Arabia and will also bolster its operations in Africa and Central Asia.

“Our company continues to deliver excellent results, demonstrating the strength of both our business model and our ability to capitalise on new opportunities while navigating market challenges,” said Alain Bejjani, the chief executive. “This gives us great confidence that we can continue our growth trajectory in 2017, a year that will see us intensify the integration of our offline and online worlds in line with increasing demand for seamless omnichannel experiences.”

Mall operators are facing heat from the rise of e-commerce, with websites such as Souq.com growing in size and the emergence of new online competitors. The strong US dollar, to which the dirham is pegged, is also making shopping expensive for visitors to the UAE.

The conglomerate said in 2015 it planned to double in size within five years as it boosts investments across the Arabian Gulf countries and Egypt.

MAF announced last June Dh30bn of investments in the UAE, which is likely to be in place by the time Dubai’s Expo 2020 takes place.

The group revealed plans to open 10 new City Centre malls, six hotels, 28 cinemas, 40 Carrefour supermarkets and a 740,000 square metres master- planned community over the next 10 years, which will generate about 170,000 direct and indirect jobs.

MAF, which built the indoor ski slope in Mall of the Emirates, is launching a similar slope in Saudi Arabia as part of a 14bn Saudi riyal (Dh13.71bn) investment in the kingdom.

In Oman, MAF announced in May a further Dh5bn investment over the next four years.

MAF is also bullish about Egypt, having announced in 2015 its plan to increase investment in the North African country to 22.5bn Egyptian pounds (Dh4.34bn) from 18bn pounds.

MAF, which has exclusive rights to the Carrefour supermarket franchise in 38 markets across the Middle East, Africa and Central Asia, last year opened 10 supermarkets and 10 hypermarkets, including the company’s first hypermarket in Africa, in Kenya.

The conglomerate welcomed 172 million customers, a 2 per cent increase from 2015, while occupancy at its shopping malls was at 98 per cent. Revenue per available room at its hotels fell by 8 per cent last year compared with 2015.

Ebitda at its properties division, its biggest money earner, rose by 8 per cent to Dh2.8bn from a year earlier, contributing 68 per cent to total earnings. At its retail division, Ebitda increased by 5 per cent to Dh1.2bn, thanks to higher investments in new markets. Ebitda at its ventures division rose by 25 per cent to Dh232 million.

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