Majid Al Futtaim Holding LLC, the Dubai-based conglomerate which operates Carrefour SA stores in the Middle East, posted a 13 per cent increase in revenue during the first half, as the company’s regional expansion helped weather the impact of VAT at home.
Sales climbed to AED 17.8 billion ($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 four per cent to AED 2.1 billion.
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.
The United Arab Emirates and Saudi Arabia introduced a five per cent 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 UAE authorities gave him reasons to be “optimistic.”
Governments in Abu Dhabi and Dubai 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 AED 50 billion over three years.