The Beirut Central District is advancing but the company in charge of its development is suffering under the economy and under verbal abuse. Solidere’s general manager Mounir Douaidy talks about the state of affairs after the precipitous drop in sales and profits.
Solidere has been in a down cycle on land sales and in a three-year slide of its share price. When would you expect the next cycle of upward development to kick in?
This is asking to look into a crystal ball. All I can say is that we will continue finishing the projects that we think we should finish. We have a mission, we have a mandate. We continue to do what we have to do and hope that external factors do not negatively impact all our effort.
The company’s performance numbers for 2012 are down 90 percent on net profit and the share price recently retreated to the $11 range in June. Is this an eight-year low for the stock?
An eight-year low? No… I can’t remember.
Is there still a need to find a bottom?
The share price going down to $11, and I don’t know if we bottomed out, is all subject to the political environment and whether we are going to see better days here or not.
You have foreign shareholders. Did the warnings that deterred Gulf citizens from coming to Lebanon also impact your shareholder behavior?
No, it didn’t impact our shareholder behavior. The result of [the travel bans] was that we lost on investors. [Last year] we were still seeing interest until all these bans came out and then all these potential investors that could have come from the [Gulf Cooperation Council] or the surrounding countries in the region, they disappeared. There was interest, and today there is no interest. Today there is nobody to generate that interest.
What do you feel most passionate about?
What I am passionate about is really this involvement in making part of the history of this country, at least through the rehabilitation and regeneration of the city center of the capital, trying to reposition it on the international map even as there is a lot of difficulty – it is not a hike, it is mountain climbing. It is fascinating on one hand but demoralizing on the other hand.
Do you feel drained at this stage?
Of course. There are moments when you feel desperate and tired and exhausted because [the opposition to Solidere] unfortunately doesn’t stop, but still I think we are doing the right thing. I think this project is that advanced that no matter how much opposition there is, it will not stop. Future generations will reap the benefits of what is being done today.
Among the more recent accusations against the company there was one that you muscled your way into hospitality operations and forced restaurateurs into contract. One local newspaper called this extortion. Would you not take someone to court who accuses you of extortion?
We won’t sue anybody for [saying] that. We created a hospitality unit not for a long-term business but as a tool. It is not part of the company’s objectives. The things that we went into were things that we thought no one else can do, and also these were concepts that were different from what existed. We did [concepts such as] S.T.A.Y. and Momo’s and Relay de Foche. If [the accusation of] extortion is related to Relay de Foche, okay, it is one little thing. Where is the trend? We are not creating [food & beverage] chains here trying to [dominate] the market. We are doing something very targeted for supporting our real estate activity, to create value over time and create activity.
How many people have you laid off recently by economic necessity and what is the ratio between average pay and C-Suite pay?
We are not laying people off. The definition of laying people off is when [institutions like] Bank of America, Citi, and HSBC lay off 30,000 people. We are not laying people off and what has been happening are cases which are very regular.
There has been no restructuring of your head count?
There has been a drop but not a big drop.
Can you name a percentage?
I don’t have the percentage. We have 1,000 employees when everybody is included. If you have like 15 people leaving for different reasons, what are we talking about? Nothing.
Can you tell us what the ratio of CEO salary to average salary is at Solidere?
I don’t have these figures. We never went into such benchmarking or statistics. But I can tell you something: it is again a misconception and fallacy that everyone thinks Solidere has very high salary levels. It is not true. We are either average or less than average in pay.
That applies to you too? Are you underpaid?
Yes, of course.