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The UAE’s Majid Al Futtaim (MAF) Group, a shopping malls and retail organisation, has reported a marginal increase in its net profit to AED2.7 billion ($735 million) in 2023, up from AED2.4 billion in 2022, with revenue impacted by a decline in the retail business due to geopolitical headwinds.
The group recorded a consolidated revenue increase of 1% to AED34.5 billion, buoyed by a 29% increase in its Lifestyle vertical, which it said crossed AED1 billion for the first time.
MAF Group’s EBITDA increased by 12% to AED4.6 billion, while total assets increased to AED69.7 billion, up from AED66.1 billion in 2022.
MAF Properties was one of the key performers for the company, with revenue growing by 20% year-on-year to AED6.9 billion and EBITDA increasing by 21% to AED3.6 billion, the company said, attributing the growth to increased footfall and higher occupancy rates, along with growth in its Tilal Al Ghaf development.
The group said its shopping malls business witnessed tenant sales of AED30 billion, an increase in overall occupancy to 96% and an 8% rise in footfall, to 232 million visitors.
Revenue for its entertainment vertical grew by 7% to AED1.8 billion, with the group stating the cinemas business was recovering from delays and adjustments to its content pipeline. This reflected positively on EBITDA, which increased by 53% to AED193 million in 2023.
The group’s retail arm though saw revenues decline by 4% on a restated basis to AED24.7 billion, impacted primarily by currency devaluations in Egypt, Pakistan, Kenya, and Lebanon, it stated.
EBITDA for the retail vertical also declined by 15% to AED1.1 billion year on year. However, at a constant currency rate, MAF added its revenue grew by 4% and EBITDA fell 4%.
The group’s retail digital business saw “significant growth”, with revenue increasing 17% to AED2.6 billion, contributing nearly 10% of MAF Retail’s revenues in 2023, it said.
The group said its net debt increased to AED15 billion, primarily due to investments in working capital. Additionally, MAF retained its 'BBB' credit rating with a stable outlook from Standard & Poor’s and Fitch Ratings.
Commenting on the 2024 outlook, Ahmed Galal Ismail, Chief Executive Officer, Majid Al Futtaim, said: “While we are not immune to the impact of the regional macroeconomic challenges, including currency devaluation in Egypt, Lebanon, Pakistan and Kenya, and the deeply concerning geopolitical events that are shaping market dynamics and consumer behaviours, we are confident in our ability to navigate the path ahead while delivering value to our stakeholders in 2024 and beyond.”
(Writing by Bindu Rai, editing by Brinda Darasha)
