Business

AMMAN — Jordan Telecom Group (JTG), operating under Orange Jordan brand name, intends to apply wide-ranging initiatives to address several constraints denting its performance.

JTG Chairman Shabib Ammari indicated in the company's annual report that the initiatives include a change in strategy and in the way of operations as well as an amendment to the organisational structure.

Ammari wrote in a foreword that competition, coupled with lower purchasing power of Jordanians and the need to dole out more investments on the networks, were the foremost challenges that dented Jordan Telecom's growth drive.

He also mentioned previous government decisions and others by the Telecommunications Regulatory Commission (TRC) as additional factors that resulted in higher operational costs and reduced earnings.

"The sudden doubling of the special tax on mobile calls [to 24 per cent from 12 per cent] and the sales tax on mobile handsets during the second half of 2013 contributed to lowering the 2014 income," Ammari said.

The annual report showed that JTG's base of subscribers diminished by 2.4 per cent from 4.09 million at the end of 2013 to 3.99 million at the end of 2014. 

The chairman criticised the TRC for not giving JTG's licence renewal an equal treatment similar to the that awarded to another operator in terms of value and period, describing the JD52.7 million paid for the 2G/900MHZ mobile telecom licence as inflated and unfair.

Reiterating that the board of directors and the executive management remain determined not to back down over the amount paid, the change in the type of licence at short notice, and the manner in which the matter was handled, Ammari said there was no option but to take the dispute with the TRC to Jordanian jury.

He added that the Arab Spring repercussions also disrupted JTG's strategy because the crisis in Syria slammed the brakes on the fiber-optic network project, known as JADI, which was "one of our most important plans”.

JADI was  originally set to pass through Jordan, Saudi Arabia, Syria and Turkey and to link the region's east and west through a fiber-optic cable network, the chairman told the shareholders.

"We aim to turn challenges into opportunities by through lowering operational costs to correspond to the new difficult conditions, and to look for new offers and services in order to boost our earnings," he said.

The annual report showed that JTG reduced its labour force by 6.9 per cent from 1939 employees at the end of 2013 to 1805 workers at the end of last year.

Ammari added that JTG's gross investments since the year 2000 have reached around JD1 billion and that the company has allocated the necessary funds in the 2015 budget to establish the G4 network whose services are almost ready to be launched. 

Chief Executive Officer Jean-Francois Thomas stressed innovation as the strength platform of Orange Jordan, listed the company's main achievements in terms of services and products and highlighted three major contracts that JTG signed with Abdali Boulevard, Saraya Aqaba and Royal Jordanian to provide them with an integrated telecom infrastructure within the company's keenness  to support and develop the Jordanian corporate sector.

According to Thomas, 2014 was a year marked by unfavourable market conditions for developing Jordan's telecommunications and information technology industry.

Within this context, he mentioned stiff and rising competition as a result of a market saturated with many services and products.

The annual report estimates the market share of Orange Fixed at 90 per cent, Orange Mobile at 30-35 per cent, and Orange Internet at more than 40 per cent. 

"The continued rise in electricity charges besides higher taxes and repeated regulatory obstacles had a negative impact that weighed on the sector and impeded its advancement and growth," he wrote in the annual report.  

The chief executive officer indicated that the group's earnings declined to JD345 million in 2014, 3.2 per cent lower than the JD356.4 million in the previous year when earnings were 11.7 per cent below the 2012 income.

Operational profit before interest, tax, depreciation and amortisation amounted to JD104.7 million, a 4.1 per cent drop from the JD109.1 million generated in 2013 when the figure was 29.5 per cent lower than the 2012 profit.

Analysing the performance by divisions, Orange Mobile topped the list with the only improvement as its operational earnings rose 2.9 per cent  to JD36 million (JD35 million), despite a decline in total earnings to JD156.4 million (JD160.5 million).

The operational earnings generated by Orange Fixed and Orange Internet dropped by 7.1 per cent to JD68.9 million (JD74.1 million) as total earnings fell 8.1 per cent to JD254.3 million (276.7 million).

Costs related to inter-connections came at JD65.7 million (JD80.9 million).

The annual report showed the cost of services, at JD161.4 million,  as the highest category of expenditures, although it was 5.3 per cent down from the amount in 2013.

An increase in commissions related to sales and distribution raised the spending by 6.6 per cent to JD43 million.

Also administrative expenditure increased by 1.8 per cent reaching JD22.1 million.

As per the agreement signed with the TRC stipulating a 10 per cent government share of the net earnings from the cellular service, JTG will pay the state treasury JD8.3 million in 2014, 7.4 per cent  higher than the previous year..

In lieu of using the Orange trademark in all subsidiaries, JTG will pay JD4.1 million, representing 1.6 per cent of operational earnings, compared to JD4.3 million in 2013.

As per the business support agreement, Orange will also be getting JD3.3 million in fees, unchanged from 2013.     

According to the profit and loss statement as of December 31,2014, JTG's net profit regressed by 18.5 per cent to JD42.1 million (51.7 million at the end of 2013.)

JTG's profitability has been on a downward trajectory since 2010 when net profit stood at JD95.1 million before slipping to JD89.8 million, JD83.1 million, JD51.5 million, and JD42 million in the following years.

Dividends to shareholders were also on the decline from JD97.5 million in 2010 down to JD90 million, JD83.5 million, JD52.5 million, and JD42 million.

AMMAN – Jordan Lafarge Cement Factories Company announced on Wednesday that it generated JD3.4 million in net profit last year, compared to JD26.2 in losses incurred in 2013.

Vice Chairman Ahmad Hishmat  said the company managed to overcome three years of continuous losses after taking "strict" measures, including massive cuts in expenditure and the usage of coal at the Rashadiyeh plant. However, he noted that the company is still suffering due to the closure of the Fuheis Cement Factory for two years now, expecting competition in the cement market to amplify this year because of the severe decline in the global prices of oil. Lafarge's sales stood at around JD114 million last year, compared to JD91 in 2013.

AMMAN — Cairo Amman Bank's gross profit during the first quarter of 2015 amounted to JD14 million, compared to JD15.4 million in the same period of 2014.

Net profit stood at JD9 million during the first three months of 2015, compared to JD10.4 million in the same period of 2014. 

AMMAN — Jordan Ahli Bank generated JD6.2 million net profit during the first three months of 2015, down from JD6.8 million in the same period in 2014.

According to a bank disclosure to the Amman Stock Exchange, total profit amounted to JD9.3 million, compared to JD8.6 million in the 2014's first quarter. 

AMMAN — Jordan Petroleum Refinery Company will be distributing JD11.25 million in cash dividends to shareholders at  a rate of 18 per cent following their endorsement during a general assembly meeting.

Shareholders will also get bonus shares at a rate of 20 per cent as the company capitalises JD12.5 million of retained earnings raising capital to JD75 million. The general assembly also approved allocating JD3.9 million to mandatory reserve. 

AMMAN — Concern over army setbacks against insurgents in recent weeks drove black market rates for the Syrian pound to a record low against the dollar on Wednesday, dealers and bankers said.

Three dealers speaking by phone from Damascus said it cost as much as 315 to 310 Syrian pounds to buy one dollar on the street. The currency hovered even higher in other parts of the country, trading at 324-328 pounds to the dollar, compared with 220 pounds to the dollar at the start of the year.

"People are trying to get as many dollars as they can get their hands on," said one exchange dealer.

From fresh produce vendors to manufacturers, from importers to taxi drivers, the crisis has brought the dollar into wider circulation as people try to protect themselves against currency depreciation and inflation.

The previous record low was in July 2013 when it hit 310 pounds over concerns about possible US military action. This compared to around 47 pounds at the start of the 2011 uprising against President Bashar Assad.

Insurgents have captured strategic territory in the south of the country and in the northwestern Idlib province, where they have edged closer to the government-held Latakia province, one of the most important areas for Assad and the Alawite community.

As anti-government fighters gain more ground, Syrians are less hopeful the economy will improve, dealers and two bankers said, adding people were increasingly hoarding dollars.

"People have been shocked by the recent rapid events on the battlefield and the psychological impact has made people turn to the dollar as a safe haven," indicated one Damascus-based banker who requested anonymity.

The fall has followed a period of relative stability after the United States and allied forces started air strikes in Syria against Daesh militants last year.

The currency was also buoyed by a government crackdown on speculators accused of profiteering by hoarding dollars and blamed for wild currency fluctuations.

Despite widespread devastation caused by the conflict and Western sanctions imposed on Syria, the currency has so far avoided a complete freefall, bankers say, citing large infusions of aid from the country's main regional ally Iran.

Iran is believed to have deposited hundreds of millions of dollars into the country's now depleted reserves that stood at $17 billion before the crisis.

The Syrian government has clamped down on currency exchanges in an effort to close the gap between the official and black market rate with some success. But the effect is wearing off now, according to a banker in a foreign-based bank that is based in Damascus.

Central Bank Governor Adeeb Mayaleh, who has long blamed the pound's fall in the black market on speculators, has recently vowed to take action to support the currency.

"The central bank hopes in the coming phase to support the stability of the exchange rate by taking a series of economic and monetary measures to support exports and production to reduce pressure on the pound in the short term," Mayaleh said.

"This will allow the central bank to intervene more effectively in the exchange market and satisfy the market needs," he added in recent statement to state news agency SANA.

But dealers and bankers contacted in Damascus and in Aleppo said central bank actions, including injecting $100 million into the market, had not been able to prevent the slide.

They also say commercial banks are not making available the quantities of dollars at the fixed price of 260 pounds to the dollar set by the central bank to calm markets.

The dollar's rise has boosted inflation which is at 120 per cent according to official data but probably is much higher, economists say.

AMMAN — Jordan and Pakistan signed on Wednesday four memoranda of understanding in the fields of investment, commerce, maritime, and standards and metrology during the joint ministerial committee meetings. 

Industry, Trade and Supply Minister Maha Ali and Pakistani Commerce Minister Khurram Dastgir Khan signed the memoranda. 

Ali described the meetings as an opportunity to open new channels of cooperation indicating that the signing of the memoranda would consolidate relations between the two countries.

The minister noted that the volume of trade was below expectations and below potential as it does not exceed $100 million annually.  

Khan said Pakistan is interested in improving economic cooperation with the Kingdom, especially exchanging expertise in order to encourage the private sector to set up joint projects.

Both sides were in agreement over the need to exchange expertise regarding the development of small and medium-size enterprises  

The two sides agreed to organise more visits by economic and commercial  delegations and to hold business events and seminars. 

Jordan urged Pakistan to import more Jordanian potash and phosphate.

According to Jordan Chamber of Commerce President Nael Kabariti,  a Jordanian delegation will visit Pakistan next month in order to hold the Jordanian-Pakistani joint business council meeting and put the council's memorandum of understanding into force.

Kabariti called for signing the Jordanian-Pakistani free trade agreement. The two sides highlighted the importance of having specialised exhibitions to showcase their products, like stone and marble, clothes, animal skins, food products, olive and olive oil, medicine, and other products. 

Ali said she will take care of any problems or obstacles facing the trade between the two countries.

AMMAN – Jordanian and Turkish economists have agreed to work together to push forward bilateral cooperation ties and increase the trade balance.

In a meeting on Tuesday, Amman Chamber of Commerce First Deputy President Ghassan Kherfan noted that the trade exchange between Jordan and Turkey is still below the desired level, standing at only $718.5 million in 2014, calling for increasing Turkey's investments in Jordan, especially in vital sectors.

A total of 20 Turkish businesspeople are investing in Jordan with a total capital of JD1.4 million. 

LONDON — Spending cuts are hurting public and social services that give women the chance to find paid work, independence and a chance at equality, a UN report warned on Monday.

The United Nations' organisation for gender equality, UN Women, said in a major study that millions of women around the world are still consigned to low-paid, poor quality jobs.

Across the world, the report reveals that women are paid 24 per cent less than men, and this gender pay gap widens for women with children.

"From Wall Street to the sugar cane fields, the gender norms that work against women are strong," said Phumzile Mlambo-Ngcuka, executive director of UN Women.

One major problem is that women still carry the burden of work in the home, whether it is caring for children or older people or walking miles each day to fetch water.

"Where there are no public services, the deficit is borne by women and girls," said Mlambo-Ngcuka, executive director of UN Women, at the report's launch in London.

The report noted how the extension of childcare, maternity and paternity leave helped women into employment, which in turn gave them and their families a chance at a better life.

Laws regulating domestic work and outlawing gender discrimination and the minimum wage also helped reduce poverty and bring down the barriers to equality, it said.

But in European countries, austerity measures are threatening public services, warned co-author Laura Turquet.

"The austerity measures are a women's rights issue in terms of cuts in public services, and those in particular impact on women because they tend to be over-represented in public sector jobs as well," she said. 

Rather than suggest that such public services were unaffordable, she added that government should view them as capital investments akin to infrastructure.

Noting that women are currently providing many care services without any financial compensation, she said: "It's about redistributing who pays for it and who carries that burden."

The report also finds that women are more likely to work in undervalued occupations — 83 per cent of domestic workers are women, and almost half of them are not entitled to a minimum wage.

The report comes 20 years after landmark conference on women's rights in Beijing.

SINGAPORE/TOKYO — One by one, Japan is turning off the lights at the giant oil-fired power plants that propelled it to the ranks of the world's  top industrialised nations. With nuclear power in the doldrums after the Fukushima disaster, it's solar energy that is becoming the alternative.

Solar power is set to become profitable in Japan as early as this quarter, according to the Japan Renewable Energy Foundation (JREF), freeing it from the need for government subsidies and making it the last of the Group of  Seven (G-7) economies where the technology has become economically viable.

 Japan is now one of the world's four largest markets for solar panels and a large number of power plants are coming onstream, including two giant arrays over water in Kato City and a $1.1 billion solar farm being built on a salt field in Okayama, both west of Osaka.

"Solar has come of age in Japan and from now on will be replacing imported imported uranium and fossil fuels," said Tomas K?berger, executive board chairman of JREF.

"In trying to protect their fossil fuel and nuclear [plants], Japan's electric power companies can only delay developments here," he added, referring to the 10 regional monopolies that have dominated electricity production since the 1950s.

Japan is retiring nearly 2.4 gigawatts (GW) of expensive and polluting oil-fired energy plants by March next year and switching to alternative fuels. 

Japan's 43 nuclear reactors have been closed in the wake of the 2011 meltdown at the Fukushima  power plant after an earthquake and a tsunami — since then, renewable energy capacity has tripled to 25GW, with solar accounting for more than 80 per cent of that.

Once Japan reaches cost-revenue parity in solar energy, it will mean the technology is commercially viable in all G-7 countries and 14 of the Group of 20 (G-20) economies, according to data from governments, industry and consumer groups.

A crash in the prices of photovoltaic panels and improved technology that harnesses more power from the sun has placed solar on the cusp of a global boom, analysts say, who compare its rise to shale oil.

"Just as shale extraction reconfigured oil and gas, no other technology is closer to transforming power markets than distributed and utility scale solar," said consultancy Wood Mackenzie, which has a focus on the oil and gas industry.

Oil major Exxon Mobil says that "solar capacity is expected to grow by more than 20 times from 2010 to 2040".

Investors are also re-discovering solar, with the global solar index up 40 per cent this year, lifting it out of a slump following the 2008/2009 financial crisis, far outperforming struggling commodities such as iron ore, natural gas, copper or coal.

Cheaper panels 

By starting mass-production of solar panels, China is the driving force in bringing down solar manufacturing costs by 80 per cent in the last decade, according to Germany's Fraunhofer Institute.

In Japan, residential solar power production costs have more than halved since 2010 to under 30 yen ($0.25) per kilowatt-hour (kWh), making it comparable to average household electricity prices.

Wood Mackenzie expects solar costs to fall more as "efficiencies are nowhere near their theoretical maximums".

Solar is already well-entrenched in Europe and North America, but it is the expected boom in Asia that is lifting it out from its niche.

China's new anti-pollution policies are making the big difference. Because of these policies, Beijing is seeking alternatives for coal, which makes up almost two-thirds of its energy consumption.

China's 2014 solar capacity was 26.52 GW, less than 2 per cent of its total capacity of 1,360 GW.

But the government wants to add 17.8 GW of solar power this year and added 5 GW in the first quarter alone, with plans to to boost capacity to 100 GW by 2020.

Coal-dominated India, with its plentiful sunlight, could also take to solar in a big way.

Despite this boom, fossil-fuelled power is far from dead.

"Additional generating capacity, such as natural gas-fired plants, must be made available to back up wind and solar during the times when the sun is not shining and the wind is not blowing," Exxon says.