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UAE conglomerate Majid Al Futtaim, which operates shopping malls across the region, reported a slight decline in net profit for 2022 despite a surge in online retail sales.
Total net profit for the year reached AED 2.4 billion ($653.4 million), down by 2% compared to a year earlier, while revenues rose 12% to 36.3 billion UAE dirhams. The company reported strong online sales, which went up by 51%, while EBITDA grew 4% to 4.1 billion UAE dirhams.
Despite lower net profit, the company, which has a portfolio of 29 shopping malls and 13 hotels, maintained that its balance sheet is strong and that it remains resilient despite global headwinds, including inflation, supply chain pressures and energy shortages.
“Overall, Majid Al Futtaim delivered balanced growth through 2022,” said Ahmed Galal Ismail, CEO, Majid Al Futtaim Holding.
“Positive contributions from across our portfolio, bolstered by the inherent strength of the UAE economy, have enabled the Group to achieve double digital revenue growth despite the ongoing macroeconomic challenges.”
Majid Al Futtaim Properties’ revenue went up by 43% to 5.8 billion UAE dirhams.
The portfolio revenue under Majid Al Futtaim Hotels jumped by 48% to 671 million UAE dirhams, while total revenues generated by Majid Al Futtaim Retail grew 7% to 28 billion UAE dirhams.
Ratings agency Fitch said in January that the company’s liquidity is strong, as the company continues to benefit from “good economic growth in the UAE”, citing that shopping mall footfall, as well as tenant sales, have exceeded 2019 levels.
Fitch had forecast the country’s gross domestic product (GDP) to grow nearly 6% in 2022, mainly driven by the recovery from the pandemic, higher oil production and increasing international visitor arrivals.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
