Majid Al Futtaim Holding, one of Dubai's biggest private sector companies and the Middle East's largest mall operator, reported an increase of 4 per cent in last year's earnings as revenue rose despite global economic headwinds and rising inflation.
Earnings before interest, taxes, depreciation and amortisation (ebitda) for the 12 months to the end of December climbed to Dh4.1 billion ($1.12 billion), the company said in a statement on Monday.
The privately held conglomerate said the “group's solid operational performance” as well as income from its properties business drove revenue 12 per cent higher on an annual basis to Dh36.3 billion.
Net profit for the reporting period declined 2 per cent to Dh2.4 billion.
The company said its balance sheet remained strong, with assets up 9 per cent year-on-year to approximately Dh66 billion.
"Overall, Majid Al Futtaim delivered balanced growth through 2022," said Ahmed Ismail, chief executive of Majid Al Futtaim Holding.
"Positive contributions from across our portfolio, bolstered by the inherent strength of the UAE economy, have enabled the group to achieve double-digital revenue growth despite the ongoing macroeconomic challenges.
“The potential impact of these headwinds has been further lessened by the outstanding performance of our properties portfolio, which has contributed 74 per cent of total ebitda.”
The retail industry, which was severely affected during pandemic lockdowns, bounced back strongly in 2021 and has maintained its growth momentum since.
Consumer spending in the UAE increased 22 per cent in the first half of last year, despite a rise in fuel costs and higher inflation, Majid Al Futtaim said in its State of the UAE Retail Economy report in August.
Spending on retail items grew 16 per cent and on non-retail goods rose 31 per cent in the same period, it said.
The economic rebound of the UAE, the Arab world’s second-largest economy, and its booming travel and tourism sector have bucked weaker global economic trends, supporting the growth momentum in the retail sector.
The UAE economy is estimated to have grown by 7.6 per cent last year, the highest in 11 years, driven by the oil and non-oil sectors, after expanding by 3.8 per cent in 2021, the UAE Central Bank said.
It is projected to grow 3.9 per cent this year, the regulator has forecast.
First Abu Dhabi Bank forecasts hydrocarbon and non-hydrocarbon real gross domestic product growth of 5.4 per cent and 4.7 per cent, respectively, for the UAE economy this year.
Emirates NBD expects the UAE's GDP to grow by 3.9 per cent in the year.
Majid Al Futtaim said the company had “solid financial standing” and it remained “fully committed to delivering value-accretive” profitable growth for its shareholders.
The company’s revenue from its property division surged by 43 per cent to Dh5.8 billion, driven by robust performance across its hotels and communities’ businesses.
The shopping-mall segment was boosted by “the full-year impact” of City Centre Al Zahia in Sharjah and Mall of Oman in Muscat, as overall mall footfall for the group increased 16 per cent to 212 million visitors.
The company’s hotels portfolio revenue increased 48 per cent to Dh671 million, in part boosted by Expo 2020 Dubai. Revenue per available room and average occupancy increased by 50 per cent and 14 per cent, respectively, last year.
Majid Al Futtaim’s retail business reported a 7 per cent increase in revenue to Dh28 billion last year, driven by “renewed consumer confidence, easing of Covid-19 restrictions and rebound in travel and tourism in countries where Majid Al Futtaim operates”, it said.
The group expanded its presence in the region, opening seven hypermarkets and 28 supermarkets across nine countries that pushed the total number of its stores to more than 450.
The company’s entertainment business revenue increased 23 per cent to Dh1.6 billion, while ebitda grew 68 per cent Dh126 million.
The signing of distribution rights with Warner Bros. Pictures, which was followed by securing distribution rights for Universal in 14 countries in the Mena region, is expected to fuel further growth for the business, it said.
Majid Al Futtaim Lifestyle reported revenue of Dh801 million, a 38 per cent year-on-year jump, which the company said was driven by a strong performance across its brands.
Looking ahead, the company plans further expansion in “high growth potential markets such as Saudi Arabia and Egypt, as well as in its home market, the UAE, amid a resurgence in consumer confidence”, it said.
“The group will also continue to invest and expand its omnichannel presence, to ensure the business is future-proof and is delivering on the changing customer needs."
Majid Al Futtaim, which had net borrowings of Dh14.2 billion at the end of last year, said it continues to maintain a strong financial and liquidity position and its debt maturity profile remains “balanced”, with a mix of capital markets and bank financing.
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
UAE currency: the story behind the money in your pockets
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