Solidere decides not to distribute dividends for 2016

Solidere’s shareholders have decided not to distribute dividends for the fiscal year 2016 despite the $75.3 million net profit realized last year.

The aim is to sustain the company’s liquidity and its strong financial position, the property developer said in a statement.

Solidere distributed a total dividend of $35.4 million for fiscal year 2015 even though it incurred a loss of $87.2 million in the same year.

FFA Private Bank said in a recent equity research report on Solidere that the company’s cash and stock dividend program could weigh down on its liquidity positions and its balance sheet due to weaker cash flow generation in previous years.
Solidere’s net profit is likely to reach $17.9 million in 2017 and $15.6 million in 2018, according to the report.

FFA said: “We expect land sales to reach $70.5 million in 2017 compared with $203.6 million in 2016, which was largely helped by backlog transactions from previous years.”

Nasser Chammaa, Solidere’s Chairman said that the company continues to follow a prudent financial strategy in light of the economic conditions in the country and the region.

The recent positive political developments on the local scene could trigger more investment and land sales and investors could become more committed to pay their financial obligations on time. All this would boost the company’s financial results, he said.