Majid Al Futtaim reports strong growth one year after rebrand

Key Highlights
 
NOTE: The following information is a trading statement based on unaudited management accounts. Audited numbers will be included in the announcement of the full-year 2014 results.
 

• Overall group revenue up11% year-on-year to AED 25 billion
• EBITDA up 10% year-on-year to AED 3.6 billion
• Strong balance sheet with assets over AED 45 billion
• Mall of Egypt construction on schedule to be completed in 2016
• 10th hotel announced in Dubai 
• VOX Cinemas opened three new cinemas adding 37 new screens in the region
• Opened first Abercrombie & Fitch, Hollister and LEGO® stores in the Middle East
• Opened 19 new Carrefour stores, creating about 1,700 jobs
• Successful opening of the Mall of the Emirates Fashion District and first ‘My City Centre’
• Issued its first 10 year USD 500 million bond

 
Dubai, 27 January 2015: Majid Al Futtaim, the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa, today reported strong financial performance and continued growth, one year on from its transformational rebrand, as the company prepares for further regional expansion.
 
Financial Summary: FY 2014 vs. FY 2013
 
Majid Al Futtaim’s preliminary and unaudited operational and financial results for the year ended 31st December 2014 confirm another steady year of growth, with total revenues growing by 11% to AED 25 billion. EBITDA from recurring operations grew by 10% year-on-year to reach AED 3.6 billion.
 
With an ambition to double the size of the business over the next five years, Majid Al Futtaim plans further investment to deliver world-class malls in the region. Additional hypermarkets and supermarkets, as well as family entertainment centres, are also planned. This expansion, combined with Majid Al Futtaim’s commitment to create positive economic impact in the countries in which it operates, will deliver thousands of new jobs in the region and create exciting destinations to support tourism growth.
 
The company continues to maintain a strong balance sheet with total assets valued at more than AED 45 billion and a net debt of around AED 8 billion. Both Fitch Ratings and Standard & Poor’s reaffirmed the company’s investment-grade rating of BBB, with a stable outlook during the year.
 
Iyad Malas, chief executive officer at Majid Al Futtaim – Holding, said, “Driven by our vision to create ‘great moments for everyone, every day’, the company’s ongoing modernisation, financial strength, and operational expansion has delivered strong financial performance and positive long-term impact to the region’s emerging markets.”
 
He continued, “Our rebrand united our companies under one umbrella corporate brand identity and vision, to provide synergy and stronger brand equity in all of our markets. This was an important exercise that has helped us position ourselves as pioneers in retail, shopping, leisure and entertainment and to achieve our ambition of doubling the size of the business in the next five years.”
 
Commenting on the company’s future expansion, Malas said, “We will continue expanding our geographical footprint across the Middle East and North Africa, bringing innovative new experiences to new populations, with a strong focus on Egypt and Saudi Arabia. This is in addition to strengthening our assets and competitive position in our home market of the UAE.”
 
Business Unit Performance
 
Properties, which develops, owns and manages the company’s shopping malls, hotels and mixed-use communities, increased footfall during the past year at its 13 consolidated shopping malls by 6% to 167 million consumers. Revenue increased by 8% to AED 4 billion and EBITDA rose by 7% to AED 2.4 billion, contributing around 66% of the group’s overall EBITDA. During the year, it opened Mall of the Emirates’ Fashion District and commenced expansion of the mall’s gross leasable area by 25,000m2. 2014 also saw the launch of the ‘My City Centre’ brand for neighbourhood shopping centres with the first opening of the new My City Centre Nasseriya in Sharjah. Revenue per available room (RevPar) at the company’s 11 hotels grew 4% during the year (11% on a like for like basis) with average occupancy rates of 73% for the year. During the year it opened the newly renovated Pullman City Centre Residences at City Centre Deira.
Properties’ projects under construction and overall development pipeline are progressing strongly; the first phase of a new shopping mall at Dubai International Media Production Zone is due to open in 2015, and the Mall of Egypt in Cairo and Hilton Garden Inn, the company’s 10th hotel in Dubai, are expected to open in 2016.
 
Retail holds exclusive rights to the Carrefour franchise in 38 markets across the Middle East, Africa and Central Asia, and currently operates in 12 countries. It continued to offer convenience to consumers by opening 19 new Carrefour stores and creating around 1,700 jobs in 2014. Revenue increased by 11% to AED 21 billion and EBITDA rose by 16% to AED 1.1 billion, contributing around 32% of the group’s EBITDA.
 
Ventures is a diverse group of fast growing companies that complement the core business through their offerings in cinemas, leisure and entertainment, financial services, fashion and healthcare and JVs in facilities management and F&B. In 2014, Ventures achieved strong operational growth with revenue increasing by 21% to AED 1 billion and EBITDA for the year increasing by 26% to AED 160 million. The business successfully opened three new VOX Cinemas in Oman and Abu Dhabi (37 screens in total), one new Magic Planet, five F&B outlets, six new fashion stores (including Abercrombie & Fitch and Hollister) and the first LEGO® Certified Store in the region. It also acquired a stake in BEAM Wallet, a mobile payments technology company. At Mall of Egypt, Ventures plans to introduce Ski Egypt, a state of the art indoor ski slope in addition to opening a 21-screen VOX Cinema, the largest multiplex in the country.
 
Financing
 
Majid Al Futtaim issued its first 10 year USD 500 million bond in May 2014, extending the average life of the company’s debt portfolio. This was the first 10 year issuance out of Dubai since 2010, and the longest tenure achieved by a Dubai corporate issuer. In addition, the company further optimised its debt portfolio on the back of its solid financial performance and strong liquidity conditions in the banking market. Liquidity position continues to be strong, with more than two years of gross financing needs covered through its cash and available committed lines. In 2014, Majid Al Futtaim also received the “Most Innovative Treasury” award from Global Capital.