Majid Al Futtaim (“the Group”), a trailblazer in shopping malls, communities, retail, and leisure throughout the Middle East, Africa, and Central Asia, has unveiled its operational and financial outcomes for the entire year of 2023.
The company demonstrated a strong financial performance, emphasizing the strength of its core operations and its strategic approach to its varied range of enterprises. As of the end of 2023, Majid Al Futtaim reported a 1% rise in consolidated revenue to AED 34.5 billion, with EBITDA climbing by 12% to AED 4.6 billion. The Group sustained growth across pivotal performance indicators, demonstrating its capacity to generate strong cash flows and maintain a robust balance sheet. Total assets for the Group increased to AED 69.7 billion, marking an uptick from AED 66.1 billion in 2022.
In 2023, the Group conducted a review of its accounting policy regarding Majid Al Futtaim Retail supplier benefits. As a result, this income is now acknowledged as a credit against the cost of sales rather than being categorized as revenue. This adjustment does not affect the Group’s net profit or EBITDA.
Commenting on the outcomes, Ahmed Galal Ismail, Chief Executive Officer of Majid Al Futtaim, remarked, “The financial performance of Majid Al Futtaim in 2023 reflects our continued commitment to delivering value-enhancing, profitable growth. Our diverse portfolio’s resilience and the hard work of our 43,000 employees who relentlessly pursue our late Founder’s vision are demonstrated by the strong performance of our Properties business, the impressive growth of our Entertainment and Lifestyle segments, and the encouraging progress we’re making in our Majid Al Futtaim Retail digital transformation, which has resulted in a double-digit increase in sales revenue.”
“We remain resolute in our confidence to successfully navigate the journey ahead, despite acknowledging the effects of regional macroeconomic challenges, such as currency devaluations in Egypt, Lebanon, Pakistan, and Kenya, as well as the major geopolitical events influencing market dynamics and consumer behaviors. Despite these challenges, we are dedicated to providing value to our stakeholders in 2024 and beyond.”
Running Company’s Activities
Majid Al Futtaim – Properties
In 2023, revenue experienced a 20% year-on-year growth, reaching AED 6.9 billion, while EBITDA surged by 21% to AED 3.6 billion. This achievement can be attributed to record-breaking footfall and increased occupancy rates benefiting malls based in the UAE, alongside a strong performance from the Tilal Al Ghaf development.
Key performance indicators for the business remained on an upward trajectory, with the Shopping Malls segment achieving record tenant sales of AED 30 billion, a boost in overall occupancy to 96%, and an 8% increase in footfall, welcoming a total of 232 million visitors in 2023. Additionally, Majid Al Futtaim Hotels maintained a strong performance, with hotel room occupancy reaching 82% in 2023. Hotel revenues saw a 4% increase to AED 700 million, and RevPAR (Revenue per Available Room) grew by 5% compared to 2022.
These accomplishments were made possible by Dubai’s thriving tourist industry, which saw 15.37 million foreign overnight visitors in the first 11 months of 2023—a 20% increase over the same period the year before. Furthermore, Tilal Al Ghaf, the Group’s most prestigious residential complex, recorded a gross sales value of AED 4.7 billion in 2023, propelled by the continued robust demand for the premium and ultra-luxury sectors.
Majid Al Futtaim – Retail
Restated revenue fell by 4% to AED 24.7 billion, mostly as a result of currency devaluations in Egypt, Pakistan, Kenya, and Lebanon as well as a change in customer attitude brought on by geopolitical unrest in the area. EBITDA also decreased by 15% year-on-year to AED 1.1 billion. However, when considering a constant currency rate, revenue exhibited a 4% growth, while EBITDA saw a 4% decline.
The Group’s Retail Digital division, in particular, saw notable development, with revenue rising by 17% to AED 2.6 billion in 2023, accounting for approximately 10% of Majid Al Futtaim Retail’s total revenue. In addition, Majid Al Futtaim Retail increased its footprint in the area by establishing twenty stores, five of which would be Supeco hybrid low-cost locations in Egypt by 2023.
Majid Al Futtaim – Entertainment
After delays and changes to its content pipeline, the movie theater industry recovered, with revenue rising by 7% to AED 1.8 billion. EBITDA showed a good trend as well, rising by 53% to AED 193 million in 2023. Furthermore, the entertainment company increased its regional footprint in June 2023 with the opening of Snow Abu Dhabi, the Group’s fourth snow destination and the first indoor snow park in the city.
Majid Al Futtaim – Lifestyle
Driven by an astounding 20% year-over-year increase in foot traffic across the 70 locations in the MENA area, revenue increased by 29% and crossed the AED 1 billion barrier for the first time. With the Middle East store portfolio bringing in AED 901 million in revenue in 2023—a 24% increase—and AED 104 million in digital sales, this milestone was especially noteworthy for the segment. In addition, EBITDA increased significantly in 2023—from AED 25 million to AED 67 million, a 168% increase.
In 2023, the Lifestyle business underwent significant growth and diversification, marked by the successful launch of the newly redesigned Dubai store for renowned Italian luxury furniture maker, Poltrona Frau, in May. This opening adds to Lifestyle’s extensive portfolio, which already includes 13 top franchise brands and two homegrown brands.
Advancements in Endurable Effect
With the launch of a new phase of its Dare Today, Change Tomorrow sustainability plan in 2023, Majid Al Futtaim continues to be at the forefront of sustainable development in the area. The company is firmly committed to attaining Net Positive status in both carbon and water by 2040. It has also achieved significant strides in lowering the usage of single-use plastic bags in the United Arab Emirates by 87%, partly due to the introduction of favorable government legislation.
In 2023, as an Associate Pathway Partner at COP28, the Group advanced its ESG agenda. Majid Al Futtaim Retail, together with 16 Fast-Moving Consumer Goods (FMCG) partners, committed to collaborating with suppliers to decrease Scope 3 emissions. Additionally, they focused on adopting sustainable packaging practices and providing healthier, more sustainable products.
At COP28, Majid Al Futtaim Retail introduced the ‘Choose Better’ program, aiming to empower customers to make healthier and more endurable options that benefit the planet and local communities. As a leading figure in regional sustainable financing, Majid Al Futtaim reaffirmed its commitment to environmentally responsible investments by issuing a $500 million green sukuk in June 2023. This marked the company’s fourth foray into green capital markets, aligning with its ambitious ESG goals and its established green finance framework from 2019.
A major accomplishment was made in 2023 when VOX Cinemas at City Centre Mirdif became the first theater in history to get the US Green Building Council’s (USGBC) highest sustainability award. Majid Al Futtaim’s leadership in environmental stewardship is further cemented by this award, which sets a worldwide standard for environmental building design and management. Additionally, the Group has upheld its low-risk ESG rating as assessed by Sustainalytics.
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