Majid Al Futtaim Group's revenue falls 3% YoY to $4.7bn in H1 2020
MAF retrained 1,000+ employees, launched a hydroponic farm, and decided to forego rents during COVID-19 closure periods
UAE-headquartered retail developer and business conglomerate Majid Al Futtaim Group has reported a 3% year-on-year decline in revenues to $4.7bn (AED17.3bn) in H1 2020 and a 27% drop in EBITDA to $435.5m (AED1.6bn), compared to the first six months of 2019, due to large-scale business disruption, combined with cautious consumer sentiment resulting from the COVID-19 pandemic.
The period presented two differentiated quarters. Majid Al Futtaim began the year performing above expectations across all its operating units. However, the second half of March saw the COVID-19 pandemic take hold, leading to temporary asset closures, travel and movement restrictions, and supply chain challenges affecting companies globally.
Commenting on the company’s financial results, the chief executive officer of Majid Al Futtaim, Alain Bejjani, said: “The pandemic has undoubtedly affected us all. Over the years, we have built and maintained a sustainable and diversified business ready to withstand the headwinds in our industries.
“Backed by ongoing prudent financial management, an agile mindset and the unrelenting drive of our people, we were able to respond quickly to course correct, reduce our cost base, and enhance our digital capabilities to meet the accelerated demand on multiple digital platforms.”
Majid Al Futtaim – Properties registered a 26% YoY decline in revenue to $408.38m (AED1.5bn) in H1 2020, and 27% YoY decline in EBITDA to $299.5m (AED1.1bn) in the first six months of 2020.
The Shopping Malls business witnessed a drop in the revenue due to temporary asset closures across the region and the proactive decision to forego rents during closure periods. However, it is now presenting a gradual recovery as footfall has increased across the company’s assets towards the end of the first half of the year.
“While the timeline for a full-scale recovery is still uncertain, we are witnessing a slow reopening of the economy. We will do our part to rebuild consumer trust that is so crucial to revitalising the economy.
“To achieve this, we must adapt to changing consumer needs and continue to ensure the highest standards of health and safety, while doubling down on our efforts to strengthen the industries and markets in which we operate.”
From the outset of the pandemic, Majid Al Futtaim has reinforced its engagement with all stakeholders, including working closely with governments in its operational markets. In the UAE, the company moved swiftly to adapt its business model, implementing global standards of health and safety, and retraining more than 1,000 employees from the cinema and leisure business to support Carrefour, in order to cater to the exponential increase in online grocery retail demand.
To further strengthen its customer-centric approach, Majid Al Futtaim entered into strategic partnerships to further improve the delivery of Carrefour online orders, including with the Department of Economic Development, Aramex, and Dubai Taxi Corporation.
The firm also partnered with the UAE Government to launch Carrefour’s third hydroponic farm, which uses 90% less water and less space than traditional farms to deliver approximately 10 kg of fresh herbs and microgreens per day, equivalent to the yield of about one acre of farmland.
These initiatives complement Majid Al Futtaim’s strong focus on achieving sustainable development as a path for a resilient economic recovery, as the company remains committed to its sustainability strategy goals, including becoming Net Positive by 2040, alongside its pledge to phase-out single-use plastics from its operations by 2025.
Amid lockdowns and government mandated closures, the company decided to forego rents at its 27 shopping malls across five markets to ease the financial burden on its tenants while stores were temporarily closed.
The company further accelerated its digital transformation journey to bolster its online capabilities to offer tenants and small businesses new and innovative platforms to reach their customers with the launch of Marketplace, Trends at Your Doorstep and THAT - its latest fashion app which will open a dedicated concept store at Mall of the Emirates later in 2020.