Solidere profits fall

Company reschedules projects

Solidere reported net profits of $16 million in 2012, down by 90 percent compared to the previous year. Consolidated profits, including affiliates, reached $17 million.

“The economic slowdown and local and regional political instability reflected negatively on Solidere’s real estate sales, investments, and overall commercial activity,” the report said. Real estate sales dropped by 80 percent to $50 million at end-2012. However, total income from rents grew by nine percent to $54 million. Rent revenues increased by 24 percent compared to 2010. The company said it succeeded in cutting down operational costs despite the recent government-imposed salary raise on the private sector.

Solidere said it shuffled its priorities and rescheduled previously planned projects to preserve its cash flow and face future challenges resulting from the economic slowdown. The 2012 results included some $19 million in exceptional provisions, equally divided between reserves for predicted costs, and compensation for the company’s tourism investments that were affected by economic and regional conditions.

The company’s assets include a land bank of 1.87 million square meters of built-up area, worth around $8 billion. The net book value of the rented property portfolio is around $1.2 billion, excluding the cinema and entertainment complex currently under construction.

Solidere’s liquidity stood at $702 million, including around $553 million in debt notes from land sales. Loans owed by Solidere to banks totaled $667 million, representing some seven percent of total assets.

Solidere has 4.8 million shares, worth $63 million (as per the $13 share price at the last calculated closing). The company owns 4.3 million Solidere International shares (estimated at around $750 million) which represent 39 percent of the company. The market value of Solidere’s share price was $14 at end-2011.

Solidere distributed $40 million in dividends for 2012. The company invested $18 million in infrastructure, $27 million for completing works in the northern part of the Beirut Souks project – particularly the entertainment complex and Khan Antoun Bey Square – and $23 million on developing new real estate projects.

In 2013, Solidere will continue work on the Khan Antoun Bey Square, and finalize the design of the ‘Department Store’. The company will continue to execute a furnished apartments, spa, and health center on Patriarch Howayek Street. This development has a total built-up area of 17,200 square meters. Solidere will also continue its residential building in Saifi (Saifi 178) which it had first planned to rent and will now sell.