Solidere SAL released its audited financial statements for year 2016 showing a pre-tax profit of $83.1 million, and an an after-tax net profit of $63.1 million. Meanwhile, the consolidated financial statements for year 2016 showed net profits of $75.3 million, after accounting for Solidere’s share of its subsidiaries’ profits, especially Solidere international. The latter had recorded profits of $36.8 million in 2016, of which 39% go to Solidere SAL.
According to a press release from Solidere, these positive results come to reverse the losses incurred in 2015, as the company witnessed during the first half of 2016 a noticeable breakthrough in land sales: 11 deals were signed and recognized for a total built up area of 73,370 sqm for a value of $218 million, putting the average price/BUA a little below $3,000.
Revenues from rents amounted to about $56 million, remaining almost unchanged from year 2015.
Solidere explained that additional provisions of $27 million were taken in anticipation of any delays or defaults, as the company suffered previously when past investors and developers faced challenging circumstances, forcing Solidere to agree to a partial rescheduling of some payments.
In line with its prudential policy, Solidere has also calculated tax provisions of $17.4 million to cover possible tax costs which may result from the adoption and application of new tax standards on years 2013 onward.
The income tax for the 2016 profits was calculated by the company on the basis of applicable laws, and amounted to about $19 million. The company also settled the built-up property taxes for 2016 worth about $7.5 million. Consequently, the total tax bill for Solidere for the year 2016 amounted to $28 million.
The company proceeded with its policy of reducing operating expenses, which include the maintenance and management of leased buildings, as well as administrative and general expenses. As such, the company continued to reduce the number of employees within the various operational and contractual bodies of the Company, in line with the overall decrease in business volume and the freezing or cancellation of many other development projects due to difficult general conditions, the economic slowdown, and the weak real estate market.
The company still enjoys high value assets represented by its inventory of remaining land for sale or development. The land portfolio consisted of 1.7 million BUA at the end of 2016, and was valued at about $ 6 billion. The company also has a portfolio of leased properties with a market value of about $ 1.5 billion, and holds a portfolio of securities resulting from the sale of land in previous years amounting to about $564 million, in addition to immediate cash of about $101 million.
The book value for Solidere’s investments in associates, especially in Solidere international amounts to $240 million, although its current market value is estimated at $500 million.
On the other hand, bank debt was decreased from $683 million in 2015 to $606 million in 2016 after re-scheduling around 50% of facilities from short term to medium and long term, with a slight increase in applied interest rates; worth mentioning that Solidere paid interest expenses of around $36 million in year 2016.
The company called its shareholders for an ordinary general assembly on May 26, 2017 at 9:30AM in Biel, Beirut Central District, to discuss and approve the board’s and auditors’ reports for year 2016. In case of lack of quorum, a second general assembly is set on Monday, June 19, 2017 at 9:30 AM in Biel, and a third one is scheduled for on Tuesday, July 11, 2017 same place and time.