Dubai: Dubai-based mall operator Majid Al Futtaim said its 2020 revenue fell 7 per cent year-over-year to Dh32.6 billion due to the impact of the COVID-19 pandemic. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA), declined by 19 per cent to Dh3.8 billion in the same period.
“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,” said Alain Bejjani, Majid Al Futtaim’s Chief Executive Officer, in a statement on Wednesday.
The pandemic 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, the company said.
Gradual recovery
Majid Al Futtaim said that during the second half of 2020, restrictions began to ease and as a result there was a gradual recovery across various industries.
“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,” said Bejjani.
Closures hit malls
Revenue from the company’s properties dropped 24 per cent to Dh3.5 billion in 2020. Meanwhile, its EBITDA from the business fell 21 per cent to Dh2.3 billion.
The Shopping Malls business saw a decline in revenue due to temporary asset closures across the region, said Majid Al Futtaim. However, the business experienced a gradual recovery in footfall as the economy started to reopen during the second half of the year, it added
In retail, the company’s Carrefour business recorded a revenue decrease of 1 per cent standing at Dh28 billion, while its EBITDA grew by 14 per cent to AED1.6 billion.
Majid Al Futtaim Retail’s online sales increased by 188 per cent across all markets, contributing 3 per cent of its total revenue in 2020. “The company leveraged the opportunity to accelerate its digital offering and strengthen its fulfilment and delivery capabilities, with the opening of four new fulfilment centres and dark stores across the region”
Strong cash flow
Majid Al Futtaim said it has cash and available committed facilities covering its net financing needs for at least the next three years.
The company added that its debt maturity profile is “light” over the next couple of years, with no material debt maturity until 2023, and net debt position reduced to Dh12.4 billion through rigorous focus on cash flow across the business.
