Misfortune marks mid-year performance of Industrial Commercial & Agricultural Co.

AMMAN — Net profit generated by the Industrial Commercial & Agricultural Company (ICA) fell sharply during the first half of this year.

In a disclosure to the Jordan Securities Commission, the holding company revealed that mid-year 2015 net profit amounted to JD95,267, down from JD0.8 million at the end of June 2014.

The diminished net profit was the result of a drop in sales to JD9.9 million from JD12.3 million registered on June 30, 2014, and lower operational profit which came at JD0.7 million, compared to JD1.3 million, after taking into account production costs.

Signs of lower profitability showed last year when operational profit fell to JD2.3 million and net profit tumbled to JD1 million on December 31, 2014, from JD3.2 million and JD1.9 million respectively in 2013.

The reduced performance was due to a plunge in sales to JD24.6 million in 2014 from JD29.8 million in the previous year.

According to the 53rd annual report covering last year's operations, the company produced 34,000 tonnes of soaps, liquid detergents, cosmetics, and plastic bottles and packs at its plants in Mafraq and Zarqa where 230 workers were employed. Only three employees worked at the holding entity.

Production and marketing activities were processed through three subsidiaries:  United Sulphochemical and Detergents Industries Company, the Unified Soap Industry Company, and Intaj Marketing and Distribution Company.

The report listed Iraq and Syria as key export markets as well as the West Bank, Egypt, Saudi Arabia, Kuwait and Morocco.

It mentioned the Civil Service Consumer Corporation and the Military Consumer Establishment among the main domestic channels, noting that ICA's subsidiaries competed in various local and international tenders.

Other clients in Jordan included the Red Cross and United Nations organisations.

Most of the imported supplies were obtained  from China, Iraq and Malaysia.

Board Chairman Nour "Mohammad Shaher" Mahayni wrote in the annual report that the company was considering all modern methods that would help reduce production costs so as to increase sales with competitive prices and face up to regional producers.

Mahayni indicated in a foreword that ICA was trying to overcome the rise in international fuel prices and higher electricity tariffs, that pushed up production costs, by striving to increase export rates as much as possible.

He said that membership in the World Trade Organisation exacerbated the dumping of similar products on the markets from neighbouring countries.

At the end of 2014, the chairman owned 14 per cent of ICA's JD14.6 million capital along with Jordan Islamic Bank whose stake stood at 39 per cent, and Jamaleddin Bahjat Daaboul who held a 17 per cent equity.

As such, the share of the three aforementioned shareholders came at 70 per cent.

The company evaluated its capital investment at JD12.5 million and its working capital at the end of the  first half of this year stood at JD9.6 million when subtracting JD3.9 million of current liabilities from JD13.5 million of current assets.

Current assets included JD4.5 million in cash on hand and at banks as well as post-dated cheques and under collection, JD5.6 million of inventory, and JD2.6 million in net receivables after deducting JD2.9 million as provision for doubtful assets.

The balance sheet as of June 30, 2015 showed net fixed assets amounting to JD12.7 million, mostly property and machinery.

ICA's liabilities included JD3.4 million of notes payable under a "Murabaha" arrangement with Jordan Islamic Bank which extended the company a line of credit against a first degree hypothecation on the lands in Mafraq and Zarqa.

The company rewarded the shareholders with  JD0.7 million in cash dividends at a rate of 5 per cent. No dividends were distributed since 2010.