DUBAI: The Dubai-headquartered Majid Al Futtaim (MAF) group has long been synonymous with Retail in the GCC.
But despite generating nearly 70 per cent of the group’s H1 2024 revenue – at a whopping AED11.605 billion (Rs26,400 crore) – the group’s retail arm not only failed to contribute anything to the bottom line, but posted a net loss of AED121 million during the period.
“This is a financial contrast and marks a challenging moment for the group’s retail dominance,” said a financial analyst who keenly follows the GCC business landscape, while talking to businessbenchmark.news.
As all know, Majid Al Futtaim (MAF) group owns the franchise rights for the reputed Carrefour brand in the Middle East, Africa (MEA), and some other regions.
They operate Carrefour stores in several countries under this agreement. MAF is considered as one of the largest and most reputed business groups in the Middle East.
There were reports that the French retailer Carrefour is planning to re-enter India in 2025, but through a franchise partnership with Dubai-based Apparel Group.
Property, the lone performer
In fact, only the property division of MAF group could contribute meaningfully to the bottom line during the first half that ended on June 30, 2024, earning a net profit of AED2.399 billion, much larger than the combined net profit of AED1.588 billion the group earned for the period.
The Entertainment as well as the Lifestyle divisions also reported losses of AED117 million and AED23 million respectively during the first half (H1).
“Majid Al Futtaim Properties delivered a record performance, driven by the success of UAE-based shopping malls and strong consumer confidence in Majid Al Futtaim’s Tilal Al Ghaf and newly launched Ghaf Woods residential developments,” the group has stated.
H1, FY23
Though not that substantial, unlike during the current year, the retail arm closed the first half of the previous year with a modest net profit of AED226 million when the group reported a combined net profit of AED1.691 billion.
Though the real reason for the poor performance of the retail division can’t be assessed with the available data, it’s a fact the retail revenue of the group witnessed a 10.8 per cent decline year on year (YoY) during the first half of the current year, from AED13.010 billion to AED11.605 billion.
Revenue too down
During the same period, though the total revenue too shrank, but at a much lower rate of 5.63 per cent, from AED17.730 billion to AED16.732 billion, year on year (YoY).
During H1 last year, while the flagship retail arm closed the period with a net profit, the Entertainment division seems to be the Achilles’ heel of MAF this time as it closed the first half with a net loss of AED267 million.
Assets at AED69.62bn
Between the two periods – H1 2023 and H1 2024, the total assets of the group fell marginally from AED69.749 billion to AED69.620 billion, whereas the group’s long term loans inched up from AED15.108 billion to AED15.486 billion.
An official release from the group stated that despite the macroeconomic headwinds from geopolitical instability and currency devaluations in the region, the group delivered a stable performance, supported by its diversified portfolio and strong balance sheet.
CEO says
Ahmed Galal Ismail, Chief Executive Officer, Majid Al Futtaim – Holding, said, “Majid Al Futtaim’s first half year (H1) results continue to underscore the strength of our diversified portfolio, protecting overall profitability despite the challenges within some of our current operating environments.”
