The real estate giant Solidere recorded a loss close to $117 million in 2017 due to a drop in property sales.
According to the audited financial statement of auditing firm Deloitte, Solidere reversed the net profit it made in 2016 with an astonishing loss of $116.4 million last year.
“Soldiere’s audited financial statements for 2017 show a loss of $116.4 million, as compared to the $75.3 million in profits it posted in 2016. Total revenues dropped 74.6 percent to $67.7 million. This drop is mainly due to a decline in revenues from land sales from $203.3 million in 2016 to $94,500 in 2017. In 2016, land sales reached $203.3 million from 11 transactions.
“Property rent revenues rose 6.2 percent to percent to $9.9 million.
“Revenues from rendered services climbed 14.1 percent to $ 7.4 million, while revenues from hospitality were $239,386 in 2017, down from $351,312 in 2016,” the statement said.
This is probably the biggest loss incurred by Solidere since it was established after the Taif Accord.
The company’s total cost of revenues declined from $79.8 million in 2016 to $31.4 million in 2017. This included a fall in the cost of land sales to stand at $17,487 last year.
The cost of rendered services rose from $3.7 million in 2016 to $4 million last year, while the cost of hospitality fell from $438,748 in 2016 to $295,317 in 2017.
Furthermore, general and administrative costs rose by 0.9 percent to $35.1 million in 2017.
The huge losses of Lebanon’s largest real estate company reflect the poor performance of most real estate developers in the country.
Many developers say that apartments sales in Beirut and other regions have drastically dropped since the outbreak of the crisis in Syria six years ago.
“It is worth noting that the provision for impairment stood at $79.3 million in 2017, up from $11.5 million in the previous year.
“Total assets edged down from $2.9 billion at end-2016 to $2.7 billion at end-2017, including land and projects in progress, valued at $1.2 billion. Net investment in properties meanwhile edged down from $606.4 million at end-2016 to $596.0 million at end-2017.
“Total equity fell from $2.0 billion in 2016 to $1.9 billion in 2017,” the statement added.
Solidere’s financial statements list three associates and two joint ventures. The associates are Beirut Central District Cinemas (40 percent), ASB-Downtown (24.5 percent), that manage restaurants, and Solidere International (39.1 percent) that has operations in other areas of Lebanon and outside the country.
Joint ventures include Beirut Waterfront Development (50 percent), which develops projects within the reclaimed area, and Beirut Real Estate Management and Services (45 percent), a property management company. Solidere also acquired a minor stake in STOW Waterfront Holding (1.68 percent), developer of Zaitouna Bay.
Solidere International’s profits slipped 39.4 percent to $21.6 million.
“Solidere is focusing on finishing its ongoing projects including the Department Store and the infrastructure of the second phase of the waterfront. Solidere followed a prudent policy over the past few years, shying away from starting new projects and cutting operational expenses,” the statement said. Solidere A and B shares are both traded on Beirut Stock Exchange.