The conglomerate's income was hit by currency Egypt's devaluation
MAF on look out for acquisitions as first half earnings rise 4%
Majid Al Futtaim (MAF), the conglomerate behind Mall of the Emirates and operator of Carrefour stores throughout the Middle East, is on the hunt for acquisitions to help bolster its operations as the company posted a 4 per cent increase in first half year earnings.
“Through both organic and inorganic growth, the company continues to pursue opportunistic acquisitions in line with its disciplined strategic and financial approach,” the company said in a July 31 statement. “It is actively assessing potential investment opportunities with a focus on digital capabilities, technology and e-commerce.”
MAF has been on a buying spree, snapping up Retail Arabia’s Geant supermarket stores for an undisclosed sum and investing in Dubai-based consumer technology app Fetchr as part of a US$41 million funding round. It made an 11th hour bid for Souq.com but lost to Amazon, which bought the e-commerce company for more than $650m.
Bricks and mortar retail operators such as MAF are investing heavily in e-commerce and their digital strategies, as the traditional model of retail and conventional shopping methods come under pressure with the pivot of consumers to buy online.
MAF's earnings before interest, taxes, depreciation and amortization (ebitda) rose 4 per cent to Dh2 billion, while overall group revenue edge up 4 per cent to Dh15.7bn.
The company’s earnings were hit by currency devaluation in Egypt, where the pound has lost around half of its value since it was floated in November last year.
Overall group ebitda and revenue would have increased 9 per cent and 12 per cent respectively at constant forex rates.
“Majid Al Futtaim continued demonstrating strength and resilience against a backdrop of regional economic challenges,” said Alain Bejjani, chief executive of MAF.
The conglomerate, which operates 21 malls, said in 2015 it planned to double in size within five years as it boosts investments across the Arabian Gulf countries and Egypt.
MAF announced last year Dh30bn of investments in the UAE, which is likely to be in place by the time Dubai’s Expo 2020 takes place.
The group revealed plans to open 10 new City Centre malls, six hotels, 28 cinemas, 40 Carrefour supermarkets and a 740,000 square metres master- planned community over the next 10 years, which will generate about 170,000 direct and indirect jobs.
MAF, which built the indoor ski slope in Mall of the Emirates, is launching a similar slope in Saudi Arabia as part of a 14bn Saudi riyal investment in the kingdom.
In Oman, MAF announced in May last year a further Dh5bn investment over the next four years.
The company’s expansion plans are on track with 13 projects progressing across Saudi Arabia, Oman, the UAE, Lebanon and Egypt, the company said on Monday.
The company’s biggest earnings contributor in the first half was its properties division, where ebitda rose 5 per cent to Dh1.5bn, accounting for 72 per cent of the group's earnings.
The company welcomed 91 million customers across its malls, up 8 per cent from the first half of last year. Occupancy at its malls reached 98 per cent and at its hotels stood at 77 per cent but suffered from lower revenue per available room.
MAF, which has more than 210 supermarket outlets in 15 countries across the Middle East, Asia and Africa after acquiring Retail Arabia, posted a 5 per cent drop in ebitda to Dh553m at its retail unit due to the depreciation of the Egyptian pound.
Its ventures unit posted a 66 per cent increase in ebitda to Dh93m from a year-earlier period.
Al Futtaim, Emaar Malls, Meraas and Nakheel also run malls in the UAE.