Dubai-based retail giant Majid Al Futtaim on Wednesday committed to continued expansion despite announcing a seven percent drop in revenue to AED32.6 billion in 2020, driven by the impact of the coronavirus pandemic.
The company also said EBITDA fell 19 percent to AED3.8 billion, while its assets decreased 6 percent to approximately AED59.1 billion as the pandemic included business interruptions, such as temporary closures, travel and movement restrictions, and supply chain challenges.
When combined with more cautious consumer sentiment, resulted in varying degrees of impact across the company, it added in a statement.
But the company said it is still on track with plans to open City Centre Al Zahia and Mall of Oman later this year while expansion plans includes the establishment of new Carrefour stores in Kenya, Uganda, and Uzbekistan.
The company also has plans to open multiple stores in the next five years in Egypt, grow in Saudi Arabia and scale up its e-commerce capacity to meet growing online demand across the region.
It said it will also continue its expansion in Saudi Arabia, with the opening of 30 new VOX Cinemas screens planned for 2021.
Majid Al Futtaim 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.”
Majid Al Futtaim CEO Alain Bejjani.
He added: “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.”
He said that from the onset of the pandemic, Majid Al Futtaim 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.
Amid government-mandated closures and lockdowns, Majid Al Futtaim decided to forego rent at its 27 shopping malls across five markets to ease the financial burden on its tenants, while stores were temporarily closed.
The company also accelerated its digital transformation journey to respond to the rapid shift to online, while offering tenants and small businesses new and innovative platforms to reach their customers with the launch of Marketplace and Trends at Your Doorstep.
Majid Al Futtaim – Properties registered a decline of 24 percent in revenue to AED3.5 billion but the malls business experienced a gradual recovery in footfall as the economy started to reopen in the second half of the year.
Mall of Oman.
Majid Al Futtaim – Hotels experienced a 60 percent 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 while Majid Al Futtaim – Retail, which runs the Carrefour business, recorded a revenue decrease of 1 percent to AED28 billion.
Online sales increased by 188 percent across all markets, contributing 3 percent of its total revenue in 2020.
Majid Al Futtaim – Ventures experienced the greatest impact of the pandemic, with a 49 percent decrease in revenue and a 122 percent decrease in EBITDA in 2020.
This decline was driven by government-mandated closures of leisure, entertainment and cinema assets for a prolonged period, combined with a shortage of movie content globally.
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