Outstanding year for Majid Al Futtaim as profit soars

Majid Al Futtaim, which operates Carrefour stores and major retail and hotel developments such as Mall of the Emirates, increased operating profit by 18 per cent to Dh2.7 billion last year.

Carrefour is one of the major retail chains in the UAE operated by Majid Al Futtaim Holding. Sammy Dallal / The National

Profits at Majid Al Futtaim (MAF) Holding soared last year as income from malls and hotels increased 21 per cent after tourists flooded the UAE following the Arab Spring.

MAF, which operates Carrefour stores and major retail and hotel developments such as Mall of the Emirates, increased operating profit by 18 per cent to Dh2.7 billion (US$735 million). Revenues increased 10 per cent to Dh18.7bn.

"2011 was another outstanding year for us," Iyad Malas, the chief executive of MAF Holding, said yesterday. "In particular, strong performance in Dubai helped to offset any softness resulting from regional turmoil."

MAF Properties, the group's largest division, owns and operates hotels, malls and mixed-use developments across much of the Middle East and North Africa (Mena). It is expanding, but the majority of its business is still in the UAE.

Its revenues from hotels and malls increased by 21 per cent to Dh2.8bn and profits by 19 per cent to Dh1.7bn, contributing about 62 per cent of the group's total profits.

MAF Properties owns five malls in the Emirates, including Mirdif City Centre and Deira City Centre, as well as nine hotels.

Dubai's malls and hotels benefited last year from a flood of tourists from around the wider Mena region who would have otherwise visited locations affected by civil and political unrest in other areas. Overall, MAF's 10 malls in the UAE, Egypt, Oman and Bahrain, welcomed 130 million visitors last year. "Diversification across business segments and geographies has been a key driver in ensuring strong operating performance," Mr Malas said.

The group's other divisions also reported strong performances last year, particularly its retail business - a joint venture between Carrefour, which holds a 25 per cent stake, and MAF, which has a 75 per cent stake.

The hypermarket and supermarket chain increased sales 2.2 per cent to Dh15.2bn across the Middle East, with profits up 20 per cent to Dh927m.

It currently owns and runs 43 hypermarkets and 34 supermarkets and this year plans to add 15 of the larger stores and 25 to 30 of the smaller supermarkets.

Fujairah City Centre and Beirut City Centre malls are also both expected to be completed this year and construction will begin on Mall of Egypt in Cairo.

MAF Ventures operates the company's leisure and entertainment services, including Ski Dubai, and reported revenues of Dh1bn and profits of Dh168m.

As a group, MAF Holding recently established two financing schemes, a $2bn bond and a $1bn sukuk programme.

"We are constantly looking into options to diversify our sources of long-term funding," Mr Malas said. "Having set up the programmes, we can now wait for the right market conditions and choose whether to issue a sukuk or a conventional bond."