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Majid Al Futtaim's 2020 revenue down 7pc as Covid crisis bites

DUBAI, February 24, 2021

Majid Al Futtaim, the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa, and Central Asia, today (February 24) reported a revenue of AED32.6 billion ($8.87 billion) and ebitda of AED3.8 billion, representing declines of 7% and 19%, respectively, driven by the impact of Covid-19 pandemic. 
 
Announcing its audited operational and financial results for 2020, Majid Al Futtaim said the company’s assets decreased 6% to approximately AED59.1 billion.
 
On its real estate unit's performance, the group said compared to 2019, Majid Al Futtaim – Properties registered a decline of 24% in revenue and 21% in ebitda, standing at AED3.5 billion and AED2.3 billion, respectively. 
 
The shopping malls business too saw a decline in revenue due to temporary asset closures across the region, the proactive decision to forego tenant rent payments during closure periods and rent relief mechanisms to support tenants. 
 
During the second half of the year, the business experienced a gradual recovery in footfall as the economy started to reopen.
 
Majid Al Futtaim – Hotels too experienced a 60% drop in occupancy rates due to asset closures for a prolonged period, and reduced demand as a result of border closures, travel restrictions and lower capacity.
 
On its retail business, Majid Al Futtaim said in 2020, its Carrefour business recorded a revenue decrease of 1% standing at AED28 billion, while its ebitda grew by 14% to AED1.6 billion.
 
The retail pioneer pointed out that the Covid-19 pandemic had resulted in business interruptions, such as temporary asset closures, travel and movement restrictions, and supply chain challenges, and when combined with more cautious consumer sentiment, resulted in varying degrees of impact across the company. 
 
Amid government-mandated closures and lockdowns, it had to forego rent at its 27 shopping malls across five markets to ease the financial burden on its tenants, while stores were temporarily closed. 
 
CEO Alain Bejjani said: "Despite the extraordinary events of 2020, Majid Al Futtaim’s full year performance demonstrated the resilience of our people and business model, diverse portfolio, operational agility, proactive investments and prudent financial risk management."
 
"The pandemic has not only been a financial crisis, but an even bigger crisis of trust. We have built our organisation to withstand adverse economic conditions, so our primary focus was on acting swiftly to protect our customers and employees, as we worked diligently to restore trust and maintain non-negotiable commitments to our sustainable business practices," he stated.
 
Bejjani said: "The fact that we have experienced growth in some of our businesses during a year of unprecedented disruption is a testament to the importance that should always be placed on people, the planet and our collective progress. For me, this is stakeholder capitalism in action, and it makes me optimistic about our future."
 
During the second half of 2020, restrictions began to ease and there was a gradual recovery across various industries, as consumers gained confidence in public health measures implemented across markets in which the company operates, he explained. 
 
Majid Al Futtaim’s quality assets, the resilience of its business model and the ongoing success of its diversification efforts, in addition to the company’s unwavering commitment to financial discipline, contributed to these results, he added.
 
From the onset of the pandemic, Majid Al Futtaim had adopted a stakeholder-first strategy, including strengthening its engagement with governments across all markets in which the company operates to identify and implement measures to minimise the spread of the virus and overcome supply challenges derived from the pandemic. 
 
"In order to guarantee a sustainable supply of fresh fruit and vegetables across the country, we had partnered with the Ministry of Climate Change and Environment in the UAE, to boost the availability of locally grown produce across Carrefour UAE stores, by opening new distribution channels for more than 6,000 small and medium-sized local farmers," he added.



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