Currency concerns hit Majid Al Futtaim’s retail revenue

Reuters/Abdel Hadi Ramahi

• Conflict and devaluation make a dent
• Overall operations show 1% rise
• Properties and lifestyle sectors soar

Dubai conglomerate Majid Al Futtaim recorded a slight increase in revenues over the past year but the company’s retail business was hamstrung by geopolitical tensions and currency concerns across several countries.

Overall revenue was up by a single percentage point to AED34.5 billion ($9.4 billion) for 2023, with profit rising 12 percent to AED2.7 billion. 

The retail side experienced a 4 percent decline to AED24.7 billion.

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This was a result of currency devaluations in Egypt, Pakistan, Kenya and Lebanon, the company said in a press statement, while there was also a “shift in consumer sentiment” as a result of the conflict in Gaza.

Majid Al Futtaim operates 478 Carrefour outlets and Superco low-cost supermarket stores in 15 markets. During the year, 20 stores were opened across the region, including five Superco stores in Egypt.

“As a business, we have not been immune to the economic fallout of the regional unrest, the impact of which is likely to continue into 2024,” Michael Rake, Majid Al Futtaim’s chairman, said in the company’s annual report.

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The company’s overall results were shored up by the performance of other sectors of the business.

Majid Al Futtaim Properties revenue grew by 20 percent year on year to AED6.9 billion. The shopping malls business showed record tenant sales of AED30 billion, an increase in overall occupancy to 96 percent and an 8 percent rise in footfall, welcoming 232 million visitors.

Revenues on the entertainment side were up 7 percent to AED1.8 billion. The company’s lifestyle arm saw revenues surpass the AED1 billion mark for the first time, increasing 29 percent on 2022 numbers.

Majid Al Futtaim’s portfolio of stores in the Middle East generated AED901 million in revenue, an increase of 24 percent, with digital sales hitting AED104 million.

The group’s net debt increased to AED15 billion, primarily due to investments in working capital.

“We are confident in our ability to navigate the path ahead while delivering value to our stakeholders in 2024 and beyond,” said Majid Al Futtaim CEO Ahmed Galal Ismail.