One of the region’s biggest mall developers has cashed in on a retail revival as shoppers shook off political unrest in parts of the Middle East.
Majid Al Futtaim (Maf), which operates Carrefour hypermarkets across the Middle East, said sales jumped 15 per cent to more than Dh10 billion (US$2.72bn)in the first half, compared with the same period last year.
It opened six new Carrefour hypermarkets in the first half of the year, bringing the total to 49 hypermarkets and 38 supermarkets.
Profit from recurring operations increased by 17 per cent to Dh1.5bn in the first half, compared with the same period a year earlier.
“We have seen turnarounds in markets previously impacted by the Arab Spring,” said Iyad Malas, Maf’s chief executive. Tenant sales grew by about 44 per cent in Egypt and about 23 per cent in Bahrain in the first half of the year.
Income from the company’s six malls in the UAE and two in Oman increased 13 per cent, Mr Malas said.
The developer behind the City Centre brand wants to open as many as 10 malls in five years, with a potential investment of several billion dirhams. It opened its 11th mall, Fujairah City Centre, this year and has developments underway in Beirut and Cairo.
“Our shopping mall strategy remains focused on strengthening our regional shopping mall presence, with developments in both Lebanon and Egypt moving forward and strategic opportunities in … Saudi Arabia, Abu Dhabi and Azerbaijan under review,” said Mr Malas.
“We are continuing expansion of the Carrefour franchise, with plans to open two additional hypermarkets in the remainder of 2012, including our first store in Georgia this month.”
Mafhas a total retail area of more than 800,000 square metres across the region. In the UAE, retailers have reported strong spending this year as consumer confidence increases.
Majid Al Futtaim Properties, the company’s shopping mall arm, increased revenues by 16 per cent to Dh1.5bn in the first half compared with the same period last year and profits before interest and tax rose by 12 per cent to Dh970m, making up about 64 per cent of the group earnings.
Majid Al Futtaim Retail, the Carrefour hypermarket operator, saw its revenue increase by 15 per cent to Dh8.9bn and profit before interest and tax rise by 23 per cent to Dh467m.
Meanwhile, Majid Al Futtaim Ventures, which looks after the group’s fashion franchises, activities such as Ski Dubai and its finance arm, saw revenues grow by 11 per cent to Dh388m and profits before interest and tax rise by about 44 per cent to Dh83m.
Total assets of the whole Majid Al Futtaim group were Dh37bn at the end of the first half and net debt was Dh7.3bn.
MAF issued a $400m sukuk in February and a $500m bond in July. It has a total bond programme worth $2bn in place.
“We expect the performance of the group’s Dubai-based assets to compensate for weaker performances in Egypt and Bahrain this year and this seems to be the case. Strong cash-flow generation for the group as a whole should enable it to continue implementing its growth strategy without weakening its financial leverage metrics,” said the Standard & Poor’s credit analyst Tommy Trask.
“The maiden bond and sukuk issued in 2012 are trading well above par, so investors should be pleased with their investments and open to future issuance from the group. And we continue to categorise the group’s business risk profile as ‘satisfactory’.”
twitter: Follow and share our breaking business news. Follow us
iPad users can read the digital edition of business section as it was printed via our e-reader app. Click here
The specs
Price, base / as tested Dh1,470,000 (est)
Engine 6.9-litre twin-turbo W12
Gearbox eight-speed automatic
Power 626bhp @ 6,000rpm
Torque: 900Nm @ 1,350rpm
Fuel economy, combined 14.0L / 100km
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Closing the loophole on sugary drinks
As The National reported last year, non-fizzy sugared drinks were not covered when the original tax was introduced in 2017. Sports drinks sold in supermarkets were found to contain, on average, 20 grams of sugar per 500ml bottle.
The non-fizzy drink AriZona Iced Tea contains 65 grams of sugar – about 16 teaspoons – per 680ml can. The average can costs about Dh6, which would rise to Dh9.
Drinks such as Starbucks Bottled Mocha Frappuccino contain 31g of sugar in 270ml, while Nescafe Mocha in a can contains 15.6g of sugar in a 240ml can.
Flavoured water, long-life fruit juice concentrates, pre-packaged sweetened coffee drinks fall under the ‘sweetened drink’ category
Not taxed:
Freshly squeezed fruit juices, ground coffee beans, tea leaves and pre-prepared flavoured milkshakes do not come under the ‘sweetened drink’ band.
TO%20CATCH%20A%20KILLER
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EDamian%20Szifron%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Shailene%20Woodley%2C%20Ben%20Mendelsohn%2C%20Ralph%20Ineson%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%202%2F5%3C%2Fp%3E%0A
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
