Financing counts to a great extent at Investments and Integrated Industries

AMMAN — Investments and Integrated Industries Company (IIIC) lowered its bank debts to JD23.1 million at the end of June 2015 from JD27.3 million at the end of last year. 

According to financial information disclosed to the Jordan Securities Commission, the company's finance expenses during the first half of this year and during 2014 amounted to JD0.5 million and JD0.8 million respectively.

As a Jordanian holding company, the unmanned IIIC manages its subsidiaries or other entities where it owns equity; invests in shares, stocks and securities; extends loans, guarantees and financing to subsidiaries; and exercises financial and administrative control on one or more firms that become a subsidiary.

IIIC's  interim summary of consolidated financial statements as of June 30, 2015, showed a JD0.6 million profit gained almost entirely from an unspecified investment income that totalled JD0.9 million before deducting finance expenses.

Within this amount, nearly JD30,000 flowed from two subsidiaries.

A negligible JD12,850 dripped as profit from Quality Printing Press  (QPP), a limited liability company capitalised at JD3.2 million, 82.6 per cent of which owned by IIIC. 

QPP's net sales of paper stationery products such as photocopy paper, cash rolls, fax and thermal cash rolls, plotter rolls, adhesive rolls, exercise notebooks, college notebooks, university notebooks, writing pads and drawing pads, amounted to JD4.3 million during the first half of this year.

But after taking into account production costs and various expenditures, including finance expenses, QPP's net profit came at JD12,850.

Another insignificant JD17,176 trickled as a yield from Quality Food, a limited liability company capitalised at JD3 million, 98 per cent owned by IIIC.  

Quality Food stopped operations in May 2011 and its premises were leased for three years to Amana Food Industries in April 2013.

"Because imported meat was essential as a raw material in our industry, we faced the risk of border closure in case of contagious diseases," IIIC's 2014 annual report said.

It also listed stiff price competition in the domestic market from lower quality local or imported products as a reason for halting production besides water scarcity and the fluctuation in the euro exchange rates.

No activities were mentioned at the Integrated Mining Company, another subsidiary, and at Al Matn Investment Company, a subsidiary that was voluntarily liquidated last year.

IIIC indicated in the report that its subsidiary Oran Investment Company planned to expand activities in the Amman Stock Exchange through investing in companies that have strategic dimension and low risk.

The plan for QPP was to lift sales by 5 per cent from 9,646 tonnes in 2014 to 10,128 tonnes in 2015 and the sales amount by 5 per cent  from JD9 million to JD9.5 million, in response to international economic conditions and the slight rise in raw material costs.

Besides mentioning fluctuations in international prices of raw materials as a risk associated with QPP's operations, the report pointed to an increase in the imports of finished products at lower prices, especially in the absence of adequate customs protection.

"QPP's market share of the photocopy paper stands at about 48 per cent," the report indicated, noting that the market needs 11,000 tonnes of this product.

"The market needs 4,600 tonnes of school notebooks and QPP has a 40 per cent share of this," it said.

Leaconfield Capital and Korerseas were among the main QPP suppliers.

IIIC's balance sheet as of June 30, 2015, showed total assets at JD34.2 million, of which JD20.2 million were financial assets at fair value.

JD10.2 million were current assets, mostly receivables owed to the company by commercial businesses and related parties, and JD2.9 million were inventory. 

Capitalised at JD14.5 million, the shareholders equity stood at JD8.1 million due mainly to JD6.2 million of accumulated losses at the end of June 2015.

According to the annual report, capital investment at the end of 2014 amounted to JD24.1 million.

The performance of IIIC was diminished last year as the consolidated financial statements as of December 31, 2014, showed a drop in QPP sales and in gross profit.

Sales declined by 6.2 per cent from JD9.6 million in 2013 to JD9 million, JD0.2 million of which were exports to Iraq.

Gross profit fell by 42 per cent from JD1.1 million to JD0.6 million, but the net result was a JD0.9 million loss, more than double the JD0.4 million loss posted at the end of 2013.   

A breakdown of IIIC's earnings and profit reveals that QPP was in the red by JD1.4 million but the loss was minimised by a JD0.5 million profit gained from an unspecified investment income that totalled JD1.1 million before deducting finance expenses.

At the end of the last year, IIIC was owned by Elia Nuqul and Sons Company (53.2 per cent), Elia Qostandi Farah Nuqul (6.7 per cent), Samira Shukri Rizek Rizek (6.7 per cent) and Ghassan, Marwan, Lina and Randa Elia Qostandi Nuqul each holding a 6.7 per cent stake.

"The company's shares are not traded on the Amman Bourse as they are entirely owned by the Nuqul family," the annual report said.

An official at the bourse told The Jordan Times that the wording was not correct as IIIC is listed and that its shares can be traded.

"You can place an order to buy IIIC shares but the question is finding somebody willing to sell," he said.

126 workers were employed by IIIC at the end of last year, all of them at QPP.