|Solidere reverses fortunes with first-half... - The Daily Star
|Solidere reverses fortunes with first-half profit net gains reach $15 million.
The Daily Star
Real estate giant says solid improvements are thanks to high demand for property in the downtown Beirut area.
The country's real estate giant, Solidere, recorded a net profit of $15 million in the first six months of the year due to a high demand for property in the downtown Beirut area.
With capital of $1.6 billion, Solidere has managed to draw wide interest from Arab Gulf nationals after the Sept. 11 terrorist attacks in the United States.
According to a statement by Solidere on Thursday, net profit jumped to $15 million in the first six months of the year compared to a $4.32 million loss in the same period of 2001.
The company, which rebuilt the Beirut Central District devastated during the civil war, made a net profit of $1.9 million in 2001 but lost $31.8 million in the year before that.
Solidere said that it expects higher profit at the end of this year thanks to the high rate of property sale. It added that in the first six months of this year, the company sold $51 million worth of property in the BCD and expects the conclusion of more sales before the end of this year.
Saudi Prince Alwaleed bin Talal is one of a number of wealthy Gulf nationals who have invested millions of dollars in the BCD. Alwaleed is currently building a five-star Four Seasons Hotel near the marina. Several luxury hotels and resorts are also expected to be built over the next three years.
Solidere generated $6.7 million in gross revenues from the lease of apartments in the first six months of the year. The company expects the revenues from apartment and shop rents to reach $15 million by the end of 2002.
"Revenues from rents rose by more than 50 percent this year," according to Solidere.
The firm, founded by Prime Minister Rafik Hariri, made an aggressive marketing campaign in Lebanon to attract investors.
"The company really benefited from the Sept. 11 events as more Gulf Arabs decided to invest their money in the BCD," said one real estate broker, adding that the successful summer season this year also helped improve the company's image.
"The restaurants in the BCD were filled with Arab tourists this past summer," he said.
Solidere said the drop in the interest of debts by an average of 20 percent in 2001 was one of the reasons behind the positive results this year.
The total outstanding debts of Solidere currently stand at $337 million. But financial experts contend that the company will have no problem in settling these debts. They added that the total value of Solidere properties stands at nearly $3.5 billion.
Solidere has also taken several measures to cut spending over the past few years. Total spending in the first six months of this year reached $4.3 million and is expected to reach no more than $9 million by year's end.
"We have managed to reduce expenditures by 40 percent since 1999," Solidere said.
Solidere A and B shares on the Beirut Stock Exchange also improved over the past few days, reflecting a positive mood among Lebanese and Arab investors. Solidere A shares jumped by 5.26 percent Thursday to $5 a share. But brokers stressed that the prices of Solidere shares are still undervalued, and were trading at $14 per share when the company was launched just a few years ago.
The Daily Star