15years - Euroland

SOLIDEREQuarterly
july-september 2010
15 years
BUSINESS & FINANCE
CHAIRMAN’S MESSAGE
I am happy to report that Solidere and its group are standing on solid
ground. The adverse circumstances prevailing in the world since
mid-2008 have not hindered us from producing good results. It all
boils down to what we have always said: strong fundamentals for
the Company. The main strategy adopted by Solidere and its group,
to maintain a high level of liquidity with a practically zero-debt
situation, has helped us withstand the financial crisis. The group
stands at an opposite end from many regional and global companies
and competitors who are suffering from lack of liquidity and high
levels of debt.
The Company’s financial statements illustrate its profitability and
strength, represented by a solid land bank and active sales, a high
value real estate property portfolio, quality receivables and efficient
cash management, high liquidity and no long-term debt. Value
creation and preservation extend to maximizing Company profits
through conception and implementation of innovative real estate
projects, provision of quality development and property management
services and introduction of new lines of business, all destined to
ensure growing revenue streams.
In Solidere International as in Solidere, our financial strength is
reflected in a highly liquid cash position, no debt and a lean cost
structure. The group has been able to weather the prevailing world
economic crisis and adapt its flexible development strategy to the
changed market circumstances. Our reputation is intact, and SI
was profitable in its third year of operation.
Al Zorah was profitable in 2009 and will continue to enjoy a solid balance sheet.
SI’s total current investment in Al Zorah constitutes 17.5% of the SI paid up
capital of US$700 million. SI and SI Al Zorah Equity Investments Inc have
received AED1 billion from Al Zorah’s repatriated capital. SI will receive
US$212 million from this transaction, which will increase cash available for
SI to US$422 million as of July 2010.
In Egypt, progress on Westown and Eastown continues as infrastructure design
efforts are underway. Two real estate projects were launched in Westown by
Solidere International and SODIC, with others planned for launch in 2010, and
we expect to achieve good returns in the coming year.
In Saudi Arabia, our focus is on the core business of land development and
value creation. Solidere International recently purchased a sizeable plot of land
in Riyadh, which has promising development potential. In addition, the company
will be launching a state-of-the-art high end residential tower on Jeddah’s
seafront later this year. Solidere International is assessing a number of other
potential opportunities that match the country's local needs, including the
introduction of a new middle income product.
Solidere’s consolidated retained profits as of end 2009 equal US$266.5 million,
consisting of its share of profits from affiliated companies in the SI group and
of distributable profits amounting to US$192 million from its activities in Beirut.
To conclude, Solidere continues to be healthy in the middle of troubled
regional and international economies, financial and real estate markets.
We are confident that our sound strategies, policies and practices will allow
our Company to pursue its strong performance and to achieve its objectives
in building Beirut city center and enhancing its brand name.
Extracts from Annual Report 2009
December 31
2009
2008
Revenues from land sales
Revenues from rented properties
Revenues from rendered services
Provision for previously recognized sales
Cost of land sales
Charges on rented properties
Cost of rendered services
Loss on sale of investment properties
Net revenues from operations
305,081,555
27,254,090
3,975,801
(7,007,910)
(80,646,511)
(9,522,142)
(4,670,872)
(376,453)
234,087,558
256,635,633
21,670,899
7,426,645
(62,422,633)
(8,345,604)
(6,712,741)
(2,108,123)
206,144,076
Share result from an associate
General and administrative expenses
Depreciation of fixed assets
(Provision)/write-back of provision against land and real estate development cost
Write-off of land and real estate development cost
Provision for impairment on collectively assessed accounts receivable
Other expenses
Other income
Other taxes
Interest income
Interest expense
Profit before tax
Income tax expense
7,861,360
(24,338,674)
(5,057,481)
(2,562,760)
(9,000,000)
(4,737,547)
352,120
37,044,009
37,044,009
(11,382,997)
221,965,588
(32,754,575)
(1,798,576)
(19,351,682)
(4,512,679)
9,604,171
(8,036,672)
(570)
832,602
55,496,110
55,496,110
(20,309,559)
214,327,398
(31,608,453)
Profit for the year
189,211,013
182,718,945
1.2348
1.1781
Basic/diluted earnings per share
Consolidated Balance Sheet US$
Consolidated Financial Highlights
December 31
2009
2008
Summary of Operations US$ million
Gross land sales
Gross rental income
General and administrative expenses
Sales backlog
305.1
27.3
24.3
428.5
256.6
21.7
19.3
605.5
Financial Ratios %
Gross profit margin
Return (interest income) on liquid assets
Debt to equity
Consolidated Income Statement US$
73.80
4.60
0.11
ANNUAL GENERAL MEETING
Held on July 19, 2010, Solidere’s annual general meeting,
presided over by chairman Nasser Chammaa and attended
by the board of directors:
Approved the audited financial statements for the year 2009;
showing a gross income of US$214.9 million before income
tax, or US$182.2 million net income after tax.
Approved the distribution of US$175.6 million in profits as
dividends in the form of US$1.15 per share, to be effected
starting October 15, 2010.
Gave the chairman and members of the board of directors
the authorizations stipulated in Articles 158 and 159 of the
Lebanese commercial code and ratified the agreements
signed with the Company.
Cleared the chairman and members of the board of any
liability for matters relating to the Company management
in 2009.
71.70
4.60
0.13
December 31
Assets
Cash and bank balances
Prepayments and other debit balances
Accounts and notes receivable, net
Investment securities
Inventory of land and projects in progress
Investment properties, net
Investment in an associate
Fixed assets, net
Total Assets
Liabilities
Bank overdrafts and short term facilities
Accounts payable and other liabilities
Dividends payable
Deferred revenues and other credit balances
Loans from banks and financial institutions
Total Liabilities
Shareholders’ Equity
Issued capital at par value US$10 per share:
100,000,000 class A shares
65,000,000 class B shares
Legal reserve
Retained earnings
Foreign currency translation reserve
Cumulative changes in fair value of
available-for-sale securities
Surplus on sale of treasury shares
Less: Treasury shares
Total Equity
Total Liabilities and Equity
SHARE PERFORMANCE DURING THE 3RD QUARTER 2010
2009
2008
177,622,687
36,585,843
346,474,210
1,124,616,666
366,099,244
311,384,302
36,200,879
2,398,983,831
291,703,019
34,803,021
296,401,913
5,901,300
1,274,486,606
216,787,077
296,444,933
37,304,608
2,453,832,477
253,659,010
112,554,605
70,541,046
150,280,315
1,987,023
589,021,999
176,996,835
95,310,680
62,989,562
256,523,727
2,347,054
594,167,858
1,000,000,000
650,000,000
1,650,000,000
112,304,146
266,525,826
81,009
1,000,000,000
650,000,000
1,650,000,000
94,067,105
272,280,032
-
11,723,032
(230,672,181)
1,809,961,832
185,130
11,653,751
(168,521,399)
1,859,664,619
2,398,983,831
2,453,832,477
Share A
Daily Closing Prices
PRICE
Political uncertainties kept most
market participants on the sideline
in the Beirut Stock Exchange, sharply
decreasing trading volume. Solidere
share prices dragged along, closing
near their one-year low.
Share A fluctuated between a low
of US$18.63 and a high of US$22.96,
closing at US$18.89, a 16% decrease
from the previous quarter. Share B
traded between a low of US$18.46
and a high of US$22.98, closing at
US$18.70, a 16.70% decrease from
the previous quarter closing level.
Trading activity decreased sharply
during the quarter, with around
2.5 million shares of both classes
trading in the local market, 65%
less than in the previous quarter.
The GDRs traded on the London
Stock Exchange closed at around
US$18.72, a 15% decrease from
the previous quarter.
VOLUME
185,586
$24
100,000
$22
75,000
$20
50,000
$18
25,000
0
$16
July 1
Aug 2
Aug 31
Sep 30
Share B
Daily Closing Prices
PRICE
VOLUME
$24
100,000
$22
75,000
$20
50,000
$18
25,000
0
$16
July 1
Aug 2
Share price (US dollars)
Aug 31
Trading volume
Sep 30
DEVELOPMENT NEWS
A total of 388 projects, representing close
to 2.96 million sq m of built-up area, are in
various stages of development in Beirut city
center.
Status
Completed
Under finishing
Under construction
Under restoration
Awaiting permit
Under study
No activity
Projects
BUA sq m
258
24
11
5
24
1,240,521
220,220
100,772
14,251
183,371
42
15
750,833
105,991
Sold
9
345,578
Total
388
2,961,537
DESIGN COMPETITIONS
Solidere selected architects
Gillespies (UK) for Roman Baths
and Omar Daouk Square; Fumihiko
Maki (Japan) for lot 1493 Mina
El Hosn office building.
Design concepts were presented
to the jury. For New Waterfront
District Infrastructure and
Landscape: Chris Blandford
Associates (UK), J.M. Bonfils
& Associates (France/Liban).
For Khan Antoun Bey Square:
Gruppo di Diseño Urbano (Spain),
Ilex (UK), Martha Schwartz
Partners (US/UK) and PROAP
(Portugal).
INVESTOR CONFERENCE
Solidere management attended
the Deutsche Bank - GEMs (Global
Emerging Markets) Conference,
New York, September 15-17.
HOSPITALITY NEWS
Beirut Hospitality Holding, a fully
owned Solidere subsidiary, was
incorporated in July as a real
estate and tourism company,
with a capital of US$10 million.
RESTORATION
In Wadi Abou Jamil, restoration of the Maghen Abraham
Synagogue is nearing completion, as artists put finishing
touches on the interior of the temple sanctuary.
PROJECT LAUNCHING
District // S residential development, designed
by Allies and Morrison Architects (UK), was launched
on September 29.
WORKSHOPS
MED-ENEC: Energy Efficiency in the Construction Sector
in the Mediterranean, a workshop on renewable energy,
Biel, July 1.
DESIGN AWARD
Vladimir Djurovic Landscape Architecture was granted
in September the 2010 American Society of Landscape
Architects Honor Design Award for their design of the
Samir Kassir Garden in Beirut city center.
FASHION & STYLE
Luxury retail outlets are springing up in the city center,
confirming Beirut’s status as a shopping destination.
Boutique openings and lively fashion events fulfill
Solidere’s strategy to promote and enhance Beirut
city center as a commercial district.
BUSINESS & SERVICES
BLOM Bank
Once Event Planner
INSTITUTIONS
Brazilian Embassy
RETAIL
Afkart
Amber Fashion
Casa Oriental
Christian Louboutin
Claude Berti
Cruise Med
Crystal Elements
Daum & Lalique
Germanji Artisanship
GG Accessories
Hermès
Hookah Thé Marbouta
Jeans Couture
Kickers
Lanvin
Leï
Manoush
Mc Donald’s
Me We
Mimo Design & Sabaya
Natural Care
Patrizia Pepe Firenze
Pepper Nightclub
Pharmacie Wazzan
Poise Design
Rosabelle Couture
Silkor
Tom Ford
Towa Gift Shop
Tulle
Victory Exchange
OPENING SOON
3ezz Café
Al Qurashi
Antoine Hakim
Antoine Karam House Linen
Assayel Event Planner
Koukjian
Diamond AA
Fransabank
Hermelique Istanbul
Hervé Léger
Ishtar Home Collection
La Durée
Luxury Clothing
Reem Akra
Relais Foch
River Woods
Siraj Hindi Carpets
Sport et Loisir
Tiffany & Co
Van Cleef & Arpels
Wa3ed
BEIRUT
EXHIBITION
CENTER
The exhibition center featured works by local
and international artists, further transforming
the Waterfront District into a cultural destination.
This large space is dedicated to the contemporary
art scene providing a platform for galleries and
the public.
ARABICITY
Nine contemporary artists from the Arab world
explore their cultural heritage through video art,
painting, photography and installation, curated by
Rose Issa Projects, September 22 – October 31.
Raeda Saadeh
Hassan Hajjaj
Rose Issa
Fathi Hassan
Ayman Baalbaki
Anna Abs
Hassan Hajjaj
BEIRUT ART CAPITAL
AIDA CHERFAN
Hommage à Anna, Anna Abs,
through July 15
LAB ART POP-UP GALLERY
Marc Quinn, Platinum Tower,
September 28 – October 9.
Paintings, sculptures,
photographs, Lebanese
and international artists,
July 20 – September 30.
MAQAM
All That Jazz - Music.2., Greta
Naufal, through August 7.
AYYAM
The Beirut Sale, Art from the
Middle East, auction, July 1
Liberated Spatiality, Thaier Helal,
through August 5
Summer Collection, August 9 –
September 30.
INSTITUTO CERVANTES
Ciclo de Cine Argentino, La Fuga,
2001 film by Graciela Maglie and
Jorge Goldenberg, directed by
Eduardo Mignona, July 1
Images Taurines, bull fighting
images, July 7 – August 31.
CONNAISSANCE DES ARTS
Angels, Alidoro Catocci and
Vital Surrealism, Raffi Tokatlian,
organized by Italian Cultural
Institute, July 23 – August 31.
PIÈCE UNIQUE
Suzanis and Sculptures,
Lulu Yamine and Rita Awn,
through July 4
Love This Island, collection
of Cuban contemporary artists,
July 9-23
Sabhan Adam and Jamil Kacha,
paintings and sculptures,
September 1-18.
ALWANE
Collective exhibition, through
September 30.
Q CONTEMPORARY
Booby Trap 2.0, collective
exhibition, through July 17.
DESIGNER’S ENTOURAGE
Launch of Azza Fahmi jewelry
collection for Preen, August 31.
EL BOURJ
Booksigning
Marina di Beirut, Elena López
Gómez, Vert Desert, July 13
Embodyments, portraits of
an alternate Lebanon, Rasha
Shammas, Librairie Antoine,
July 22
Proust Portrait Peinture, Nayla
Tamraz, Editions Orizons,
September 30.
VIRGIN MEGASTORE
Canticles of the Sheep
booksigning, Zee Saliba,
Xlibris, August 25.
BIEL
Menasart Fair, July 13-14
Beirut Jewelry Week, July 20-23
Luxury, September 15-19
Art Deco, September 22-26.
Marc Quinn
PERFORMING ARTS
The Beirut Souks was abuzz during the holy month
of Ramadan with a festival of traditional music.
Contemporary music stars and international DJs
also performed in city center venues throughout
the summer.
BEIRUT OUTDOOR SPACE
DJ Carl Cox, July 3
F*** Me I'm Famous, David
Guetta, July 17
Sasha and James Zabiela,
August 7.
BIEL
The Gazillion Bubble Show,
July 2-4.
MUSIC HALL Liban Jazz
Nils Petter Molvaer, trumpet
player, September 29.
ROBERT MOUAWAD MUSEUM
Singer Elie Rizkallah, pianist
John Fayyad interpreting oriental
classics, September 15.
RAMADAN NIGHTS
Tania Kassis
Hykayat Amareddine, Mini Studio
Fouad Zabadi
Abdel Karim Al Chaar
Sahar Taha
May Farouk
Ahmad Kaabour
Traditional music from Aleppo
Nabil Kassis
Ranine Al Chaar
Palestinian dance group Assayel
Issa Ghandour and Madina band
French Flamenco Dame La Mano
Ghada Ghanem
Trablous Street and Ajami Square,
August 16 – September 12.
VISITORS
Clockwise from top left:
Messrs. Bozizee and Hajj
with Vice Chairman Maher
Beydoun; French Senate
delegation with George
Nour, Wharton students
and Caritas delegation
with Nabil Rached.
OFFICIALS
Socrates Bozizee, Central Africa
president’s son with Ahmad Hajj;
Turkish Ambassador Inan Ozyildiz;
Senator Adrien Gouteyron with a
delegation from Groupe d’Amitié
France-Liban du Sénat.
BUSINESS & DELEGATIONS
MGM Hospitality CEO Gamal Aziz and
VP Middle East development David
Vely; StandardVision CEO and
creative director Adrian Velicescu;
EDG Company founder and principal
Lee Penn Lanselle; Leisure
Consultants representatives John
Hudaceck and John Ellis, Bezark
Company creative director Christian
Hope, The Goddard Group chairman
Gary Goddard and creative director
Taylor Jeffs (US); MCH Group CEO
René Kamm, executive board Stephan
Peyer, MENA representative Zeid
Abdul-Hadi with CEO Expomobilia
Jean-Marc Devaud; Roche Holding
Ltd chairman Franz Humer
(Switzerland); Louis Vuitton general
manager ME and India Damien
Vernet; Menasart Fair manager
Laure d’Hauteville with artistic
directors Pascal Odille and JeanMarc Decrop (France); Chivas
Brothers Pernod Ricard CEO
Christian Porta; The Visitor
Attraction Company director Tim
Rusby (UK); BRC Imagination Arts
managing director Bart Dohmen
(Netherlands); Caritas president
Father Simon Faddoul and general
secretary Fadi Ibrahim with 20
Caritas International members;
Compagnie Immobilière Libanaise
president Roland Abdéni and head of
development Alexandre Abdéni.
SOLIDEREQuarterly
july-september 2010
PROFESSIONALS & ACADEMICS
Taberna del Gourmet owner MariaJosé San Roman with architect
Joaquin Gallego (Spain); St Jude
Children’s Cancer Center executive
director Peter Decker with Dr. Ramez
Azouri; 50 MBA students from
Wharton University (US); Martha
Schwartz Partners landscape
architects Alexandra Steed and
Matthew Getch; architect Mark
Hackett (UK), Grupo de Diseno
Urbano Miguel Camacho (Mexico),
PROAP Marco Buinhas and Juan
Ignacio Zoilo (Portugal); Ilex
Guillaume Credoz (France); architect
Roberto Floridia (Italy).
MEDIA
Fortune representatives Alenka
Krznaric and Jamie Cowan (UK);
Le Figaro representatives Nathanael
Aknine (US); thirty international
journalists from Europe and the
Middle East.
Photos
Mosbah Assi
Fares Jammal
Mazen Jannoun
Ferran Quevedo
Copyright © 2010 Solidere
The Lebanese Company
for the Development and
Reconstruction of Beirut
Central District s.a.l.
POBox 119493 Beirut
2012 7305 Lebanon
Tel 961 1 980650 - 980660
Fax 961 1 980661 - 980662
solidere@solidere.com.lb
www.solidere.com
15 years
SOLIDEREQuarterly
july-september 2010
OPENINGS
Les Diamants de Dikran, July 14
Louis Vuitton, July 15
Officine Panerai, July 17
U-Boat Watches, July 27
IWC Schaffhausen, August 9
Poe Tahiti, August 16
VHP Jewelry, September 7
7 For All Mankind, September 15
Jaeger-LeCoultre, September 16
Yves Saint Laurent, September 17
Boucheron, September 28
NEWCOMERS
GOLD SOUKS
Atamian Exclusives
Boucheron
Chronora
IWC Schaffhausen
Jaeger-LeCoultre
Les Diamants de Dikran
Poe Tahiti
Solidere Information Center
Tag Heuer
Servcorp
U-Boat Watches
VHP Jewelry
WEYGAND STREET
Officine Panerai
ALLENBY STREET
Bottega Veneta
Louis Vuitton
Rodeo Drive
FAKHRY BEY STREET
Balenciaga
Etro
Tumi
Yves Saint Laurent
SOUK ARWAD
Piquadro
SOUK AYYAS
Boss Orange
Eclat de Mode
Young Gangs
SOUK EL FRANJ
Occhi di Prada
SOUK TAWILA
Derrière
Thierry Mugler
PATRIARCH HOYEK
Samsung
OPENING SOON
Antoine Wadih Salamoun
Azar Jewellery
Bali Balima
Café M
Coco and Cassia
Diadème
Diamond Creations
Farah Shanal
Finecraft
GC Boutique
Gemmes
George Hakim/Alain Philippe
Hublot
Imad Baadarani
JF Gioielli
Joaillerie Moukarzel
Juicy Diamonds
Le Stay
Momo's
Mouawad/Chopard
Mukhi Sisters
Nada G
Name It
N Mouzannar
Or La Loi
Pierre Germani
Planet Discovery
Pomellato
Rami Abboud
Voyageur
Yeprem Jewelry
Yessayan Jewelry
Zoughaib Design Jewelry
SOUKS INAUGURATION
Beirut Souks consecrate Beirut and the city
center as a regional business, shopping,
leisure and cultural destination.
The Souks four-day grand opening featured
Elie Saab, Fashion Daze, Jean Michel Jarre
and street performances, September 15-18.
ELIE SAAB
Elie Saab showcased his fall-winter
2011 prêt-à-porter collection.
A great number of personalities and
fashionistas attended the red-carpet
event, a premiere in the Middle East.
FASHION
DAZE
The four-day event, organized
by Raya Tueny, Aïshti and Solidere
in Souk Arwam, featured fashion,
photography, interior design and
DJ sets by local and international
emerging talents.
JEAN
MICHEL
JARRE
A pioneer of electronic music,
Jarre put on a grand concert
featuring lights, laser and
video animations.
The event was followed by a
spectacular fireworks finale.
STREET
PERFORMANCES
SOLIDEREQuarterly
july-september 2010