Solidere’s revenues reached a new high of USD 382 million, rising 14% due to growth in land sales and higher rentals. Earnings registered a mild growth of 3.7% reaching 196 million but we expect net income to decline during 2011 due to the company’s diminishing backlog.
We have updated our coverage on Solidere with a HOLD recommendation and a fair value of USD 19.40 per share, considerably lower than our previous estimate to account for the additional risk premium and revised forecasts. The new premium resulted from the political turmoil associated with the UN’s Special Tribunal for Lebanon, the regional political shocks that have affected investor sentiment in the region, along with high likelihood that the Lebanese real estate market may have already peaked.
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Solidere Results Review 2010 and Outlook for 2011