Meager profits do not mirror scope of Jordan Marble's operations

AMMAN — Jordan Marble Company (JMC) is generating meager profits considering the volume of sales.

According to unaudited interim financial results as of September 30, 2015, disclosed to the Jordan Securities Commission, the company seems overburdened by administrative and general expenses besides financing costs.

The income statement showed that sales increased by 21.4 per cent during the first nine months of this year to JD5.1 million from JD4.1 million during the same period of last year.

After taking into consideration production costs, the gross profit boiled down to JD0.8 million on September 30, 2015, compared to JD0.6 million registered on September 30, 2014.

Yet, these aforementioned amounts were struck down to a JD25,959 net profit for January-September 2015 and JD50,734 for the same period of last year due administrative and general expenses as well as financing costs. 

In a previous disclosure sent to the JSC in late July, the company revealed that its sales amounted to JD3.4 million during the first six months of 2015, 9.7 per cent higher than the JD3.1 million recorded during the same period of 2014.

JMC indicated that JD2.3 million of the sales during January-June 2015 were exports and the remaining JD1.1 million were sales in the local market.

Sales in 2014 amounted to JD5.4 million split evenly between exports and the domestic market.

"We opened new markets in neighbouring countries, especially the Gulf states, in South Korea and the United States," JMC Chairman Nabil Salim Al Zammar wrote in the disclosure, expressing hope that the company would be able to broaden these markets in the future so that they would reflect positively on sales and profitability.

The net profit at the end of June 2015 and June 2014 amounted to JD49,144 and JD47,239 respectively.

The company's annual report covering 2014 estimated JMC's share of the local market at present at more than 10 per cent, anticipating the rate to rise over the next five years to  20-25 per cent.

It described the competition in the market as severe and mentioned in this regard 5 main firms that produce marble and granite.

"The company will try to achieve a volume that corresponds to its highly technical state-of-the-art production lines and large capital," the report said.

It added that capital investment stood at JD1.9 million at the end of June 2015, down from JD2.2 million at the end of last year and JD2.6 million at the end of 2013.

According to the balance sheet as of September 30, 2015, total assets amounted to JD7.9 million, JD1.9 million of which were property and equipment.

Other assets included JD2.9 million of inventory and JD2.1 million of receivables.

Liabilities totaled JD3.8 million, mostly debts to Arab Bank and Jordan Ahli Bank..

Notes accompanying the financial statements showed average indebtedness at JD2.7 million and shareholders equity at JD4.1 million.

Consequently, the ratio of indebtedness to shareholders equity stood at 65 per cent in 2015 compared to 60 per cent in 2014.

Shareholders approved during an ordinary general assembly meeting to distribute JD45,000 in cash dividends at a rate of 1.125 per cent and to tap the JD350,098 voluntary reserve as another disbursement.

The meeting was attended by four shareholders who held 99.2 per cent of the JD4 million capital.

At the end of last year, JMC was owned by Mohammed Marwan Salim Al Zammar (35.9 per cent), Nabil Salim Al Zammar (34.4 per cent) and Najib Salim Al Zammar (28.7 per cent).

The company, located in Amman's Abu Alanda suburb, employed 66 workers at the end of last year.