04 August 2016

Dubai-based mall operator Majid Al Futtaim (MAF) reported double digit growth in its entertainment division, including cinemas and the region's first indoor ski slope, which helped boost the group's overall revenues in the first half of the year.

Majid Al Futtaim Ventures division, which manages cinemas, leisure and entertainment facilities, including Ski Dubai, reported revenue of 870 million dirhams ($228 million), a 43 percent increase compared to the same period in 2015, the firm said in a press statement late on Wednesday.

The growth helped boost overall group revenue in the first six months of 2016 to 15.2 billion dirhams, up 11 percent from a year earlier. Operating profit increased 7 percent to 1.9 billion dirhams, the statement added.

This trend was previously highlighted by Alain Bejjani, chief executive officer of Majid Al Futtaim Holding, when he told Zawya in June the company had seen a shift in consumer focus towards what he called 'retail-tainment', with shoppers spending more cautiously but going to malls for entertainment value and overall experience.

This week's report said occupancy rates in the company's malls have remained strong at 98 percent, helping revenue in its property division rise 11 percent to 2.2 billion dirhams.

The retail division opened 11 new stores in the first half of 2016, meaning it now manages 160 stores in 15 countries. Sales revenue increased 9 percent during the period to 12.3 billion dirhams, while operating profit in the retail division rose 2 percent to 582 million dirhams, helped by the opening of its first Carrefour hypermarkets in Kenya and Kazakhstan.

Across the company's 12 hotels, revenue per available room declined 11 percent during the first six half of 2016. The company's hospitality sector reported a 6.8 percent decline in revenue last year, compared to a year-on-year increase of 4.4 percent in 2014. While a full revenue figure for this segment was not given in this week's report, indications are that the downward trend has continued in 2016.


New openings

MAF recently announced long term investment plans in the United Arab Emirates, Saudi Arabia, Egypt and Oman, including new shopping mall developments in Dubai, Abu Dhabi, Riyadh, Cairo, and Muscat, as well as hotels and mixed-use communities.

"We plan to open our second My City Centre neighbourhood retail concept in Al Barsha, Dubai and Mall of Egypt, the company's flagship project in Egypt, in the second half of the year," Bejjani said in Wednesday's statement. "In addition, Majid Al Futtaim Retail plans to expand our Carrefour franchise presence across our geographical footprint with the opening of 15 additional stores by the end of 2016."

Founded in 1992, MAF owns and operates 19 shopping malls, 12 hotels, 191 cinemas and three mixed-use communities in 15 international markets, employing around 33,000 people.


© Zawya 2016