Majid Al Futtaim Holding, the retail and hospitality giant behind Carrefour UAE and Mall of the Emirates, yesterday said it suffered a Dh164 million (US$44.6m) loss in the first six months of the year.
The disclosure was contained in the first publicly available financial results to be disclosed by one of the region's biggest retail names since it launched a bond prospectus in June.
The loss was predominantly due to the company revaluing future cash flows expected from two hotels currently under construction, Majid Al Futtaim (MAF) said.
"Our operational performance was very strong," said Shrimati Damal, the company's vice president of funding and deputy treasurer. "We do a full valuation of our assets, and this time we have done the same thing on two of our operating assets."
MAF recognised a loss of Dh358m on the two properties it revalued, having made a profit overall of Dh195m in the same period a year earlier.
Revenue for the first half of the year increased 9 per cent to Dh9.3 billion from Dh8.5bn compared with the same period last year.
Earnings before interest payments, write-downs and tax increased 50 per cent to Dh554m.
"Overall, the revenue driver is MAF retail, which is Carrefour. That's the biggest revenue driver," said Ms Damal. "In terms of profits, that's driven 60 per cent by the properties business, which is 85 per cent driven by shopping malls."
Despite being privately held, MAF has begun to report financial statements as it is looking to issue a bond at some point to investors.
The company had planned to issue a US$2bn (Dh7.25bn) bond earlier this year, but postponed the issue in July due to the high rates of interest demanded by investors amid growing market uncertainty.
MAF is split into three business segments: properties; retail; and ventures.
Total revenues in the properties business is made up of leasing rents from its various malls around the Middle East, including Mall of the Emirates, Mirdif City Center and Deira City Center, as well as the revenues from its hotels such as The Pullman and Kempinski in Dubai.
MAF Properties is also in the process of constructing hotels in Bahrain, Fujairah City Center mall, Beirut City Center, Mall of Egypt in Cairo and Khams Shamat Touristic Development in Damascus.
Fujairah City Center is already 90 per cent leased with retail tenants a year ahead of completion, underpinning the recovery in the retail sector this year.
MAF Retail, which operates Carrefour stores across the Middle East in a joint partnership with the global hypermarket giant, joins a growing number of retailers reporting strong growth in the sector this year.
Taking advantage of this trend, Carrefour is expanding across the UAE and Middle East, particularly in its convenience offering, Carrefour Market.