The Lebanese Company for the Development and Reconstruction of the Beirut Central District S.A.L. (Solidere) released its audited consolidated financial statements (which take into account the company’s subsidiaries) for the year 2021, reporting a net loss of $4.28 million, compared to a net loss of $15.91 million in 2020. The company’s external auditors Deloitte and Ernst & Young extended an adverse opinion on the company’s reported consolidated financial statements attributing their opinion to the fact that Solidere’s financial statements do not present fairly the financial position of the Group as the company is operating in a high inflationary environment bound by uncertainties surrounding the exchange rate at which the future cash flows would have been expected to be settled. In detail, revenues from property and land sales plunged by 77.69% y-o-y to $85.21 million, rental revenues fell by 6.91% to $21.23 million, gains on sale of investment properties contracted by 90.59% to $0.44 million, while revenues from provided services rose by 12.92% to $8.41 million. In parallel, cost of revenues dropped by just below 68% in 2021 to $87.93 million, thanks to some $173.17 million reduction in the cost of land sales. Consequently, the company’s net operating profit decreased by 80.84% on an annual basis to $27.36 million, while general & administrative expenses increased by 20.26% to $32.21 million. Solidere booked provisions for impairment of just $0.28 million in 2021 compared to $31.77 million in 2020. The share of income from associates stood at $17.97 million in 2021, compared to a loss of $31.88 million in 2020. The company also reported a net loss on exchange of $23.71 million in 2021, compared to a net loss of $22.04 million in 2020.

On the balance sheet front, the Group’s consolidated assets narrowed by 2.87% in 2021 to just above $1.98 billion as net accounts and notes receivable sank by 75.61% to $13.49 million and land inventory & projects under construction receded by 3.83% to $853.10 million (circa 43.04% of total assets). Investment properties (net), on the other hand, rose by 8.48% in 2021 to $609.59 million. The auditors stated that the company’s cash and bank balances amounting to $91 million in 2021 include balances deposited with banks in Lebanon which are carried at $47 million. On the other hand, the Group’s total liabilities fell by 8.49% in 2021 to $222.57 million, and include dividends payable totaling $57.75 million. The Group’s shareholders’ equity ended the year 2021 down by 2.11% at $1.76 billion mainly owing to the company’s treasury stock buyback for an additional amount of $44.2 million in 2021 compared to $29.8 million in 2020 pursuant to the Board of Directors’ decision in December 2020 to buy back up to 5% of the Group’s total shares within one year at an estimated cost of $157 million. Consequently, the company’s book value per share is estimated at $10.66 at end of year 2021, implying a price to book value multiple of 5.44 for Solidere “A” shares and 5.43 for Solidere “B” shares based on the closing prices of August 25, 2022.