Osama Habib| The Daily Star
BEIRUT: Solidere shares were up slightly Thursday after a surge the day before, in what appeared to be a reaction to expectations that government formation is imminent. Solidere A shares jumped by 4.72 percent to $7.32 Wednesday, while Solidere B shares increased by 10.28 percent to $7.40.
The stocks of the real estate giant were up 0.40 percent for Solidere shares A Thursday and 1.08 percent for Solidere B shares.
Brokers attributed the increase to reports that Lebanon’s main political parties are close to reaching a final deal on the names of new Cabinet ministers and that an announcement could be made before Christmas.
Despite the improvement, the value of the Solidere stocks is far below the levels of when the company was founded.
“Stocks in Lebanon move up or down according to the political sentiment in the country and not the financial performance of the listed companies,” one broker told The Daily Star.
“We still don’t have any idea when Solidere will disclose the financial results of the first half of 2018.”
For reasons that remain unclear, Solidere has declined to release its official financial results for the first half of 2018. The company usually discloses these before the end of each year, or when the general assembly of the company convenes.
One banker did not rule out the possibility that Solidere may record another big loss in 2018 due to the economic recession and real estate stagnation in the country.
“The fact that Solidere is not releasing the results on time is news in itself. The Capital Market Authority, which regulates and monitors the listed companies, should have an opinion about the delay in releasing the results,” the banker said.
They and other brokers said Solidere has been lenient with merchants and traders who rent shops and restaurants in Beirut’s Downtown. They said Solidere has given the merchants a grace period in which to settle their dues as business and sales has hit rock bottom in the past few years.
“Many of the investors in Solidere seem to be facing a cash flow problem and they appear to have asked the company to reschedule the installments for the rented properties,” one broker said.
In June, Solidere said it recorded a loss close to $117 million in 2017 due to a drop in property sales.
According to the audited financial statement of firm Deloitte, Solidere reversed the net profit it made in 2016 with an astonishing $116.4 million loss.
That compared to the $75.3 million profit it posted in 2016.
Total revenues dropped 74.6 percent to $67.7 million in 2017, mainly due to a decline in revenues from land sales to $94,500. In 2016, land sales reached $203.3 million from 11 transactions.
The company’s total cost of revenues declined from $79.8 million in 2016 to $31.4 million in 2017.
That figure 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.
