Dubai Malls Operator Revenue Climbs as Expansion Offsets VAT
(Bloomberg) -- Majid Al Futtaim Holding LLC, the Dubai-based conglomerate which operates Carrefour SA stores in the Middle East, posted a 13 percent increase in revenue during the first half, as the company’s regional expansion helped weather the impact of value-added taxation at home.
Sales climbed to 17.8 billion dirhams ($4.85 billion) from a year earlier despite “adverse market conditions,” Chief Executive Officer Alain Bejjani told Bloomberg TV on Tuesday in Dubai. Earnings before interest, taxation, depreciation and amortization grew 4 percent to 2.1 billion dirhams.
MAF, as the group is known, has steadily extended its presence beyond Dubai to countries including Egypt, Lebanon and Oman. The group is opening 100 new Carrefour supermarkets in Egypt, 600 cinemas in Saudi Arabia and is expanding in Kenya, Bejjani said.
Read More: Dubai’s Majid Al Futtaim Eyes More Deals as Valuation Gap Closes
The United Arab Emirates and Saudi Arabia introduced a 5-percent VAT at the start of 2018 in an attempt to bolster non-oil revenue. The levy hurt sentiment among consumers still grappling with the impact of lower oil prices.
“One thing is for sure, the VAT has had an impact,” Bejjani said, but added that recent measures taken by U.A.E. authorities gave him reasons to be “optimistic.”
Governments in Abu Dhabi and Dubai, the richest sheikhdoms in a federation making up the U.A.E., have responded with measures to stimulate the economy and create jobs, including slashing fees on sales at restaurants and hotels in Dubai. Abu Dhabi authorities said they’ll spend 50 billion dirhams over three years.
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