UAE. Majid Al Futtaim Holding LLC, the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa, released today its trading results for the full year ended 31 December 2011, announcing the best performance of its business operations since the group was founded in 1992.
The company’s revenues reached AED 18.7 billion, a 10% increase on 2010, at the same time its EBITDA from recurring operations grew by 18% year-on-year to reach over AED 2.7 billion.
Majid Al Futtaim Holding continues to maintain a strong balance sheet with total assets valued at over AED 35 billion and a net debt of around AED 7.5 billion. An investment-grade rating of BBB was assigned by both Standard and Poor’s and Fitch Ratings, which is the highest credit rating assigned to any privately held corporate in the Middle East.
Commenting on the company’s performance, Iyad Malas, CEO of Majid Al Futtaim Holding, said: “2011 was another outstanding year for us. Diversification across business segments and geographies has been a key driver in ensuring strong operating performance. In particular, strong performance in Dubai helped to offset any softness resulting from regional turmoil. As we have continued to expand and develop our business, we have taken steps to ensure that we have a corporate governance framework commensurate with the strength and scale of our business. To that end, we have adopted the principles of the United Kingdom’s Combined Code of corporate governance and continue to ascribe to international best practice reporting.”
Business Units’ Performance
Majid Al Futtaim Holding’s strong performance in 2011 was driven by the robust operations of all of its three business units.
Majid Al Futtaim Properties, the leading MENA region developer, owner and manager of shopping malls and developer and investor of hotels and mixed-use developments, saw its revenue increase by a strong 21% to AED2.8 billion and EBITDA rise by around 19% to AED 1.7 billion, contributing about 62% of the group’s EBITDA. The company’s malls hosted over 130 million visitors throughout the period.
Majid Al Futtaim Retail, the business unit which holds an exclusive 75% interest in and operates the Carrefour franchise across the MENA region also saw a significant rise in sales during 2011, with revenues rising to AED 15.2 billion. The business’ EBITDA rose by 20% to AED 927 million and contributed 34% of the group’s EBITDA.
In 2011, Majid Al Futtaim Retail opened 7 new hypermarkets and 12 supermarkets, expanding its portfolio to 43 hypermarkets and 35 supermarkets in 11 countries across the Middle East and North Africa.
Majid Al Futtaim Ventures, which is responsible for developing new businesses that complement and reinforce the Holding’s leadership in its core businesses, also achieved positive operational growth contributing a revenue of AED 1 billion, with an EBITDA of AED 168 million.
Supported by its resilient assets, strong balance sheet and stable access to funding, Majid Al Futtaim Holding has embarked on a solid long-term growth plan that includes expansion in both existing and new markets.
“We continue to focus on a prudent and sustainable growth strategy, which has built us a reputation for being a reliable developer and partner that can deliver projects on time and within budget. Within the coming 12 months we will complete the construction of two shopping malls (Fujairah City Centre, UAE and Beirut City Centre, Lebanon), and expect to start construction in Cairo at our Mall of Egypt Project. We will also progress our strong development pipeline of new shopping malls. In addition, Majid Al Futtaim Retail expects to open around 15 new Carrefour hypermarkets and approximately 25 to 30 new supermarkets in 2012” Mr. Malas commented.
Majid Al Futtaim Holding has established a very strong financial position to support its existing businesses as well as its dynamic expansion plans.
In 2011, Majid Al Futtaim Holding established a USD 2 billion Reg S EMTN programme, which was filed with the London Stock Exchange in June 2011. The company also set up a US$1 billion Sukuk programme in early January 2012.
“We are constantly looking into options to diversify our sources of long-term funding,” Mr Malas said. “Having set up the EMTN and Sukuk programmes, we can now wait for the right market conditions and choose whether to issue a sukuk or a conventional bond. The company has a strong liquidity position to amply cover its needs for at least the next 18 months, and is under no pressure to do any issuance before the conditions are favourable to do so,” he added.
In July 2011, Majid Al Futtaim Holding raised USD 1 billion from a group of banks. The facility was mainly used for early refinancing of a USD 1 billion loan maturing in July 2012 as well as to further strengthen the company’s liquidity position.
Notes: The above information is a trading statement based on management accounts. Audited numbers will be included in the announcement of the full-year 2011 results.
US$1 = AED3.67