Majid Al Futtaim Holding, one of Dubai's biggest private sector companies and the Middle East's largest mall operator, reported a sharp rise in profit and revenue on the back of the robust economic momentum of its UAE home market.
Net profit for the six-month period to the end of the June soared an annual 74 per cent to Dh1.7 billion ($463 million) from the same period a year ago, while revenue for the reporting period climbed 5 per cent to Dh18.9 billion, Ahmed Ismail, chief executive at Majid Al Futtaim, said on Monday.
Earnings before interest, taxes, depreciation and amortisation for the first half of this year climbed 13 per cent to Dh2.1 billion.
“The year is off to a good start, revenue is up 5 per cent despite currency devaluations in several markets in which we operate,” Mr Ismail said in a Bloomberg TV interview.
“More pleasing is the fact that our profitability is growing ahead of our revenue” on the back of “a buoyant economy in our home market of the UAE”, he said.
The UAE's economy, the Arab world's second-largest, rebounded strongly last year from the slowdown caused by Covid-19, with growth momentum extending into 2023. It grew an annual 3.8 per cent in the first quarter of this year after a 7.9 per cent expansion in 2022, boosted by a sharp growth in the non-oil sector as it continues to push for diversification.
Gross domestic product in the three months to the end of March increased to Dh418.3 billion, with most sectors and economic activities that serve as “the key pillars of the national economy made significant contributions”, Abdulla bin Touq, Minister of Economy said earlier this month, quoting the Federal Centre for Competitiveness and Statistics data.
Non-oil GDP rose 4.5 per cent year on year to Dh312 billion.
The privately held conglomerate, whose business interests span from retail and leisure sectors to property development, owns and operates 29 shopping malls, 18 hotels and mixed-use communities.
Profitability during the reporting period was driven by “multiple factors” including reallocation of capital to more profitable and higher margin segments of the business.
“Our residential [properties] business has posted record results, in fact, our total properties business has delivered another set of record, with 40 per cent growth in revenue and 22 per cent growth in ebitda. Part of it naturally is operational efficiency and financial discipline,” Mr Ismail told Bloomberg.
Dubai residential prices were nominally below their previous peak and the company is planning a new development by the end of the year, he said.
The property market in the UAE, one of the main drivers of the country's non-oil economy, has also carried growth momentum forward into 2023 after sharp increases in the past two years.
Government measures including residency permits for retired people and remote workers, as well as the move to expand the 10-year golden visa programme and business gains on the back of Expo 2020 Dubai have driven the sector's growth.
The property market registered strong performance across all sectors in the first half of the year, despite global macroeconomic headwinds, Consultancy CBRE said in a report in July.
Abu Dhabi's market recorded 4,737 sales transactions in the first half of the year, up 88.6 per cent annually, while average prices in Dubai's market rose by 16.9 per cent in the year to June 2023, CBRE said.
Majid Al Futtaim said revenue for the company's property business rose 39 per cent to Dh3.4 billion, while ebitda climbed 22 per cent to Dh1.7 billion, primarily driven by UAE-based shopping malls and the Tilal Al Ghaf residential property development.
The property business was the biggest contributor to the company's revenue and profit growth in the reporting period, it said in its financial statement, posted on Nasdaq Dubai.
Shopping mall footfall increased by 12 per cent, with the Mall of the Emirates recording its highest ever first-half footfall. Tenant sales grew by 7 per cent, with the company's UAE-based malls making the largest contribution to revenue.
The retail business, however, reported a 2 per cent drop in revenue to Dh14.1 billion, with ebitda during the first half dipping 7 per cent, “driven primarily by the impact of currency devaluations across the group’s footprint”, the company said in a statement on Monday.
At a constant currency rate, revenue grew 8 per cent and ebitda increased 5 per cent.
The company, which opened five new stores in the region during the first half, said its digital retail business remained strong, with a 13 per cent increase in revenue to Dh1.2 billion.
Revenue for Majid Al Futtaim's entertainment business rose 4 per cent annually to Dh822 million as the cinema business continues to recover from “delays and adjustments to its content pipeline”.
The company has expanded the footprint of its entertainment business in the first half with the opening of Snow Abu Dhabi in June, the group’s fourth snow destination in the region.
Its lifestyle businesses recorded 31 per cent rise in revenue to Dh473 million as it opened 11 new stores in the first six months of the year.
Majid Al Futtaim's net borrowings at the end of the first half reached Dh15 billion, with most of the debt maturing 2026 onwards, as to maintains “a strong financial and liquidity position backed by a well-balanced financing mix encompassing capital markets and bank financing”, it said.
In May, the company raised $500 million through a green sukuk, its fourth in about four years, as it continues to diversify its funding base.
The company will use the proceeds to refinance an older $800 million bond commitment, it said at the time.
A timeline of the Historical Dictionary of the Arabic Language
- 2018: Formal work begins
- November 2021: First 17 volumes launched
- November 2022: Additional 19 volumes released
- October 2023: Another 31 volumes released
- November 2024: All 127 volumes completed
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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UNpaid bills:
Countries with largest unpaid bill for UN budget in 2019
USA – $1.055 billion
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Mexico – $36 million
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Israel – $18 million
Venezuela – $17 million
Korea – $10 million
Countries with largest unpaid bill for UN peacekeeping operations in 2019
USA – $2.38 billion
Brazil – $287 million
Spain – $110 million
France – $103 million
Ukraine – $100 million
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Young women have more “financial grit”, but fall behind on investing
In an October survey of young adults aged 16 to 25, Charles Schwab found young women are more driven to reach financial independence than young men (67 per cent versus. 58 per cent). They are more likely to take on extra work to make ends meet and see more value than men in creating a plan to achieve their financial goals. Yet, despite all these good ‘first’ measures, they are investing and saving less than young men – falling early into the financial gender gap.
While the women surveyed report spending 36 per cent less than men, they have far less savings than men ($1,267 versus $2,000) – a nearly 60 per cent difference.
In addition, twice as many young men as women say they would invest spare cash, and almost twice as many young men as women report having investment accounts (though most young adults do not invest at all).
“Despite their good intentions, young women start to fall behind their male counterparts in savings and investing early on in life,” said Carrie Schwab-Pomerantz, senior vice president, Charles Schwab. “They start off showing a strong financial planning mindset, but there is still room for further education when it comes to managing their day-to-day finances.”
Ms Schwab-Pomerantz says parents should be conveying the same messages to boys and girls about money, but should tailor those conversations based on the individual and gender.
"Our study shows that while boys are spending more than girls, they also are saving more. Have open and honest conversations with your daughters about the wage and savings gap," she said. "Teach kids about the importance of investing – especially girls, who as we see in this study, aren’t investing as much. Part of being financially prepared is learning to make the most of your money, and that means investing early and consistently."
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1.
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3.
4.
5.
Explained
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
Difference between fractional ownership and timeshare
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Six large-scale objects on show
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PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
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FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place playoff
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