The Lebanese economy has been enduring the devastating consequences of geopolitical upheaval and domestic tension. The uncertainty, compounded by ongoing regional turmoil, has exacted a marked and heavy toll on the real estate, tourism, and hospitality sectors.
Our Company is not spared, and the number of transacted sale deals over the last few years has been low as a result of the growing fallout. The downturn in economic activity at the national level with its pronounced effects on the commercial and hospitality sectors has afflicted the Company’s related businesses, too. Net operating revenues and net income have dropped sharply from previous highs.
Solidere continues to reevaluate and adapt its strategies to ensure sustainability. As we weather this tumultuous climate, we have streamlined operations and continue to decrease overhead expenses. Certain real estate development projects have been postponed to ensure cautious application of Company resources, and enable Solidere to maintain the track record of superior quality that the brand represents.
After the inauguration of the Souks' CinemaCity at the end of 2013, the complex’ food court at the beginning of 2014, and the entertainment annex in 2015, we started construction of the Souks’ Department Store. These projects generate revenue and will strengthen the vibrancy and value of the area, and more broadly of Beirut Central District. Other real estate developments by the Company have been postponed.
We finalized infrastructure works on the Waterfront District and the land is now ready for development by third-party landowners. The Eastern Marina and 80,000 square meter waterfront city park, now scheduled for a later delivery date, will complement real estate projects in the area and serve as additional magnets.
Further afield, Solidere International, of which Solidere owns 39 percent, remains financially solid with high liquidity. Solidere International pursues the relentless effort to increase business in the region through investments in exclusive and high-value land and real estate development projects with the potential to deliver attractive return on investment. We trust that Solidere International’s progress will further catalyze potential value and revenue growth for Solidere and its shareholders.
We remain unflinching in our commitment to uphold and pursue Solidere’s interest. Our focus is on implementing strategies that sustain value creation and result in better returns for the Company’s stakeholders. At the same time, we will remain vigilant. A flexible approach to business planning is the key to insulating the Company to the greatest extent possible from the negative consequences of local and regional instability.
Chairman and General Manager