|24 February, 2020

UAE's Majid Al Futtaim posts modest annual growth, sees better 2020

Earnings before interest, tax, depreciation and amortizatio for the year ended December 31, 2019 rose to $1.25bln

A woman walks near the fashion dome at the shopping center Mall of the Emirates in Dubai, January 11, 2012. Image used for illustrative purpose.

A woman walks near the fashion dome at the shopping center Mall of the Emirates in Dubai, January 11, 2012. Image used for illustrative purpose.

REUTERS/Jumana El Heloueh

DUBAI - Dubai-based retail developer Majid Al Futtaim said on Monday its annual EBITDA and revenue edged a tick higher, sharply slowing from the pace of growth seen in 2018, amid challenging conditions in its key Middle East markets.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the year ended Dec. 31, 2019 rose to 4.6 billion dirhams ($1.25 billion), a 1% rise from the prior year.

Revenue also climbed 1% to 35.2 billion dirhams, compared with an 8% growth in the year-ago period.

The retail sector in Dubai - one of the world's leading shopping capitals - has taken a hit from lower property rates and oil prices. 

The retail developer's operational cash flow stood at 63 billion dirhams.

Majid Al Futtaim, an unlisted holding company that owns and operates shopping centres and hotels in the Middle East and North Africa, also has the franchise rights for French retailer Carrefour SA in 37 markets.

The company said its biggest business segment - retail - also posted a 1% rise in revenue and a 2% jump in EBITDA, despite "a reduction in discretionary spend due to weaker consumer sentiment."

However, the company anticipates improved market conditions for 2020.

"I think 2020 is off to a good start ... There is very good growth across the board, in the UAE, Saudi Arabia, and Egypt - our three key markets," Chief Executive Officer Alain Bejjani told Reuters, adding that the coronavirus outbreak has not affected the company's performance so far.

The virus has spread from China to 28 other countries and territories. 

About 6% of visitors to Dubai, a tourism and business hub, come from China.

Reuters reported last year that Majid Al Futtaim was expanding its business in Egypt and Saudi Arabia, and opening stores in Uganda and Uzbekistan. 

"We are looking at more markets in CIS (Commonwealth of Independent States) and East Africa, in addition to our commitment to core markets," Bejjani said.

($1 = 3.6728 UAE dirham)

(Reporting by Nafisa Eltahir, Editing by Sherry Jacob-Phillips) ((Nafisa.Eltahir@thomsonreuters.com; +971 56 226 1754;))

More From Business