Real estate development giant Solidere suffered further losses in the first half of 2018 as the firm was forced to put more provisions in place for bad loans, according to auditing company Deloitte.
The company recorded a loss of nearly $100 million in the first half of the year, hit hard by political paralysis in the country and real estate stagnation.
An economic recession and the sharp drop in the volume of business has prompted Solidere to temporarily offer grace periods for investors to settle their rents and monthly installments.
Empty apartments, offices and stores in Beirut’s Downtown have become a familiar sight since the outbreak of the Syria crisis over seven years ago.
The company’s nonperforming loans in the first half of this year stood at $78 million.
Banks and companies usually put provisions in place for loans and credit lines in case of customer default.
According to Deloitte report, Solidere did not generate a single penny from land sales in the first half of this year, compared to just $94,000 in 2017.
Revenues from rented properties in the first half of 2018 stood at $29.5 million, compared to $30.7 million in the same period of 2017.
Revenues from rented services in the first half of this year reached a little more than $4 million compared to $3.3 million in the same period last year. Revenues from hospitality stood at $1,302 in the first half of 2018 compared to $169,852 in the same period last year.
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In other words, the company’s total revenues in the first half of this year reached $33.5 million, compared to $34.29 million in the same period of last year.
Total Solidere assets in the first half of this year, including cash and balances, repayments and other debit balances, accounts and notes receivable, investments in asset-backed securities, inventories of land and projects in progress, investment properties, investment in associates and joint ventures and fixed assets reached $2.569 billion, compared to $2.711 billion in the same period last year.
The company’s liabilities to June reached $769,191,922 compared to $811,855,493 in the same period last year.
One local newspaper reported that in view of the dramatic circumstances, Solidere’s board of directors decided to reduce land sales by $1,500 per square meter in order to help boost purchases.
Solidere recorded a loss of close to $117 million in 2017 due to a drop in property sales.
According to the audited financial statement from Deloitte, Solidere reversed the net profit it made in 2016 with an astonishing loss of $116.4 million last year.
“Solidere’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.”
