Majid Al Futtaim reports revenue fall in H1 results

Date : 19 August 2020

Jon Wright

Head of Insight - RA EMEA

At a corporate level, UAE-based Majid Al Futtaim saw a fall in revenue of 3%, to AED17.3 bn (US$4.7 bn), and a 27% decrease in its EBITDA, to AED1.6 bn (US$435.5m), in the first half of its financial year. In its results, its Retail division was a bright spot, with Majid Al Futtaim Retail reporting a rise in revenue and EBITDA.

Majid Al Futtaim sees stark differences during first half

The company said its first half had ‘presented two differentiated quarters, driven by the impact of the global COVID-19 pandemic’. Majid Al Futtaim noted all its operating units had performed above expectations at the beginning of 2020. However, from the second half of March, as the effects of COVID-19 took hold its business had been affected. The company said the pandemic had led ‘to temporary asset closures, travel and movement restrictions and supply chain challenges’.

Carrefour business performs strongly…

Despite the challenging operating and market conditions, Majid Al Futtaim said its Carrefour business had performed well. As a result, it reported a 4% increase in revenue, to AED15.1 bn (US$4.1 bn), and an 18% increase in EBITDA, to AED709m (US$193.0m), for the division in H1. Its pace of expansion while affected by COVID-19 was not stalled completely by the pandemic, with Majid Al Futtaim opening five new Carrefour stores. It noted this will continue in H2 2020 as it continues ‘to expand its physical presence across existing markets’. It also said it would enter a new market, Uzbekistan, through the opening of three supermarkets in the country.

…With ecommerce standing out

The biggest shift, though, came online, where Carrefour saw a 263% increase in sales as shoppers switched to ecommerce to enable them to buy safely. At the end of H1 online sales accounted for 3% of its total sales. It said investment in its online and digital capabilities had helped it as COVID-19 affected several of its markets.

As online and digital grew in importance by country Majid Al Futtaim ‘moved quickly to simultaneously ramp up its digital presence whilst strengthening its fulfilment and delivery capabilities’. It did this through the opening of three new fulfilment centres, while its digital transformation was accelerated with the ‘launch of new online platforms including Carrefour’s Marketplace, Trends at Your Doorstep, and Click and Collect’ supporting this. Its new online capacity was enhanced by 53 existing stores also being used to fulfil online orders.