Dubai: Majid Al Futtaim plans to proceed with expansion across some of the most troubled countries of the Middle East, tapping the rising disposable income of the region's growing population.
"We continue to focus on a prudent and sustainable growth strategy," said chief executive Iyad Malas, announcing the full-year earnings of the Dubai-based malls and hotels operator.
He confirmed plans to complete this year the Beirut City Center Mall, and to start construction on the Beirut Waterfront project in Lebanon, and the Mall of Egypt in Cairo.
The privately owned company, also known by its acronym MAF, reported a 10 per cent increase in revenue to Dh21.6 billion ($5.9 billion) in 2012, on higher hotel occupancy and sales at its Carrefour supermarkets, the company said in a statement. Earnings before interest, taxes, depreciation and amortisation rose 7 per cent to Dh3 billion.
"Rising disposable income and a persistent low interest rate environment in Gulf Cooperation Council (GCC) states will cause an increase in consumer spending," Dubai-based Arqaam Capital said in report on Monday about the retail industry in the Middle East and North African region.
"Governments in Middle East and North Africa (Mena) region have and will increasingly adjudicate on matters of food and fuel subsidies with the consumer as priority beneficiary, rather than incumbent businesses and private sector commercial interests, in light of the civil unrest of the past two years."
Malls in the UAE
MAF opened in 2012 its eleventh shopping mall and added during the year 14 supermarkets including seven for Carrefour. It plans to sign in February a three billion Egyptian pound-loan ($450 million) syndicated by a group led by National Bank of Egypt and Banque Misr, to finance the Mall of Egypt, chief executive Malas said in a interview.
It plans to work on the expansion of the Maadi City Center project and a mall in Almaza in Cairo, and is in the process of securing permits for a mall in Madinet Nasr, in the suburb of the Egyptian capital, he said.
The company is also seeking to purchase plots to build malls in the United Arab Emirates' cities of Abu Dhabi and Sharjah, and the Saudi Arabian capital Riyadh, Malas said. "We are in an extremely solid position for the next two years," Treasury Manager Daniele Vecchi said.
With debt due this year of less than Dh1 billion, the "company won't need to raise money this year and will do so opportunistically."