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Q2 ENG 2007.Pdf business & financial news Annual general meeting Held on June 22, 2007, 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 2006; taking note of accumulated profits and of the US$132 million net income of the year, resolved to transfer 10% of net income to retained earnings, and distribute 12 US$165 million in the form of US$1 per share held, as per the shareholders’ register at the general meeting date, with distribution to take effect as of September 14, 2007. 3 • Gave the chairman and members of the board of directors the authorizations stipulated in 1,2 Beirut Souks Articles 158 and 159 of the Lebanese 3 Annual general meeting commercial code. Chairman’s message • Cleared the chairman and members of the board of any liability for matters relating to the This has been a crucial year, with times of high and low tide. Company management in 2006. We have stood the test and shown our mettle, as performance and • Approved the board of directors’ resolution resilience are the two mottos of Solidere. The first half of 2006 to purchase up to 2,357,143 shares in Solidere was very bullish and Solidere achieved excellent midyear results International Ltd (SI) at a subscription price thanks to substantial sales. Then came the tragedy of of US$70, totaling US$165 million. the July war and its aftermath. • Resolved to subscribe to an additional amount We continued to honor our commitments and implemented the of US$51.4 million in SI’s capital. decisions made previously, notably as far as share buyback and Share performance during the 2nd quarter dividend distribution. But as the politico-economic environment Solidere shares remained weighed heavily on the expectations of investors, end-users and on hold during the quarter developers, Solidere’s share performance and sales could not but as political turmoil kept Share A - Daily Closing Prices most investors in a wait- bear the brunt. Volume and-see mood, pending an The political events may have frozen the emergence of new real Financially, the year registered a net profit of US$132.2 million, outcome of the political estate projects but it did not stop existing projects, and despite 22% above 2005. Recognized sales reached US$253.3 million, 733,329415,948 544,896 $17.0 360,000 situation in the country. delays most of them are proceeding. Out of a 4.69 million sq m the highest level since inception, and the sales backlog at year end Share A traded between a However, both shares low of US$14.99 and a high BCD target floor area, 2.66 million sq m have been the subject of were US$1.2 billion. We stopped selling finished products $16.3 270,000 development, with 824,300 sq m completed, 664,800 sq m under to build a portfolio of income-generating properties. Our rental maintained their resilience of US$16.91, closing the quarter at US$15.39, a construction and the rest in various stages of planning or design. revenues of US$20.7 million are expected to grow around $15.5 180,000 around the US$16 level, e 4.05% decrease compared threefold from 2009 due to revenues from the Beirut Souks. Our c most investors remaining We are advancing in the marketing of the South Souks, as we i r to the previous quarter. P confident in the Company’s forge ahead for their delivery in the first half of 2008, with the bank indebtedness stands at US$27.1 million. $14.8 90,000 e r strong fundamentals and North Souks entertainment center to follow. Other real estate Cashflows in 2007 and thereafter will be used to complete Beirut a h in the good prospects of Share B traded between a projects proceed in the Saifi Village, Wadi Abou Jamil and Zokak Souks and renovation projects, implement land development of S $14.0 0 2 Apr 07 3 May 07 31 May 07 29 Jun 07 its international expansion. low of US$15 and a high of El Blatt residential neighborhoods; around Beirut Souks and the new waterfront district and develop some selected real estate US$17.02, closing the Beirut Marina; and in high-density zones in the hotel district, on projects. We intend to honor our commitment to distribute Beginning June the shares quarter at US$15.39, a the Martyrs’ Square axis and on the BCD south and north edges. dividends regularly. This will have a positive impact on the share moved up close to the 3.69% decrease over the Share B - Daily Closing Prices US$17 level, as Solidere Government decrees issued in 2006 ratified BCD Master Plan value and will be to the advantage of shareholders. previous quarter. Volume declared dividends of US$1 amendments to reflect the new sector plans for the Martyrs’ We have decided to apply our know-how in urban regeneration per share. Shares dropped Trading activity in the local Square axis, Ghalghoul, Souks, hotel and waterfront districts. and city making within the Middle East and the Mediterranean 518,800 to lower levels towards market was reduced to Amendments proposed by Solidere for the new waterfront district, basin, teaming up with our network of consultants, investors $17.0 360,000 the end of the quarter, as around 6 million shares of and still awaiting official approval, involve the creation of two high- and operators. External projects will offer a new source of $16.3 investors sold the shares both classes, a 12% rise building clusters, one of which constitutes a special business revenue in the form of fee income as well as equity and/or profit 270,00 on a dividend play. decrease compared to the district, while maintaining in the district a majority of residential participations, while avoiding to invest any of your cash abroad. $15.5 180,000 previous quarter. and office low-rise buildings in continuity with the traditional BCD. e c To conclude, as it drew on its internal strength elements, its i The GDRs traded in the r Having sold lots in the new waterfront district, we are committed fundamentals and above all its human resources, your Company has P $14.8 90,0000 London Stock Exchange e to deliver the sites for development within the next three years. r adapted its policies in a dynamic and efficient way to market a closed the quarter at h $14.0 Reclamation works were expedited for completion by end 2007. In conditions, diversifying its activities and growing both in depth S 0 around US$16.38, an 2 Apr 07 3 May 07 31 May 07 29 June 07 2009, we expect to start installing infrastructure integrating and globally. increase of around 2.7% Formula One capability and an upgraded utility network. compared to the previous A landscape competition will be launched for the waterside park Share price (US dollars) quarter closing level. and corniche promenades. (Extracts from Annual Report 2006) Trading volume 2 3 business & financial news Solidere International Following the amendment of clause 3 of SI is to retain management control of all Solidere’s articles of incorporation, projects it is or will be engaged in, and to relating to the Company’s object, conduct the initial master planning approved by the Council of Ministers in internally, while carrying-out the January 2007 and ratified by decree 207 execution of the projects, with the help of of March 26, 2007, Solidere established consultants and technical partners Solidere International Ltd (SI), to engage under its supervision, through subsidiary in real estate development outside the or partner companies. geographical scope of Beirut Central SI will derive: income generated by wholly District. owned investments, from the sale of land Solidere International Holdings s.a.l. or completed real estate projects, the (SIH), founding shareholder of SI, is a sale or rental of units therein; income 4 fully owned Solidere subsidiary from subsidiaries including percentage incorporated on May 3, 2007. SI was share of profits, free equity, dividends incorporated in the Dubai International and capital gains from the sale of its Financial Centre (DIFC) on June 7, 2007. stakes therein; arrangement fees as free Its capital was then increased to US$700 equity in companies it establishes, that million by way of a private placing that generates dividends and could be sold at was closed on June 30, 2007, and was a premium; options on land plots priced 5 50% over-subscribed. at cost, that could be sold at market price The object of SI is to leverage the brand after master planning, or developed and name, know-how and established later partly or wholly leased or sold; development processes of Solidere to development management fees and identify, promote, purchase, invest in, profit sharing; property management develop, market and manage, real estate fees; cash investment income. projects outside Beirut Central District. SI contracted projects: SI will take advantage of real estate • Al Zorah project, Ajman, UAE. opportunities in the Middle East and the • Sheikh Zayed project, Cairo western Mediterranean Basin. periphery, and Katameya area project, SI benefited before inception and will Cairo eastern periphery, Egypt. continue to benefit for up to 25 years of: Projects SI is submitting for: 1 6 7 8 a license to use the Solidere brand name; • Monaco territory extension. transfer of rights and obligations under • South Turkey project. projects contracted, as well as projects Solidere previously undertook studies under negotiation by Solidere and consultancies for a real estate Developers’ news 1 Foch 126 Management Services (SMS), a fully project in Tabuk city in Saudi Arabia, and owned Solidere subsidiary; as well as 2 Saifi Khan A large number of real estate projects Palace, were under construction.
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