hit $393 million
Bank debt now fully repaid
Solidere signed sales contracts worth $393 million in 2020. Its total revenues reached $295 million in 2019 including land sales of $234 million.
The rise in sales allowed the company to settle its entire debt to banks totaling more than $200 million. This has also led to a surge in its cash liquidity in banks. Solidere said this liquidity will enable it to face current and future challenges.
Faysal Barbir, Director of Capital Markets at FFA Private Bank, said that demand for Solidere’s properties will continue as long as confidence in the banking system and the economy remains weak. Solidere was accepting banker’s checks for property sales until it settled its debts. This could lower its future sales, according to Barbir. Banker’s checks and transfers from bank accounts as well as from accounts opened by financial companies and investment banks like FFA are used for buying shares. The payments are in lollars. This continues to be done.
Barbir said: “Solidere enjoys now ample liquidity. It is advisable that it buys back part of its own shares. This will improve further its share price on the Beirut Stock Exchange.” The company's two classes of shares soared 2.5 times in 2020 with Solidere ‘A’ closing the year at $18.5 and Solidere ‘B’ at $18.29, up from a record bottom value. On Jan. 13, 2021, a day before the current lockdown, its ‘A’ share closed at $18.98 and its ‘B’ share at $18.57. Barbir said that Solidere shares are expected to rise further if the lack of confidence in banks remains. The fact that the company could distribute dividends for fiscal year 2020 would also contribute to the rise in the share price. He said that it is hard to set a target price for the shares because of the economic crisis and political uncertainty especially that Solidere shares are very sensitive to political developments.
According to Barbir, the company’s profitability is expected to improve further this year thanks to the rise in property sales. Solidere reported a profit of $38 million in the first half of 2020 and a full-year net profit of $49 million in 2019. The company is still repairing the damages caused to its properties by the Port Explosion.
Date Posted: Jan 18, 2021