Business

WASHINGTON — The news remains mostly bleak for the American newspaper industry, struggling over the past decade to adapt to the new digital landscape.

The sale of the San Diego Union-Tribune in early May for $85 million underscored the horrific slump in the value of "old media" companies in recent years.

Although the sum paid by Tribune Publishing was only marginally below the $110 million in a 2011 sale of the San Diego group and excluded some valuable real estate, the newspaper was believed to be worth as much as $1 billion as late as 2004.

The story is the same at other once-proud US metropolitan dailies: according to the Pew Research Centre, valuations are down by more than 90 per cent from their peaks at the Boston Globe, Philadelphia Inquirer, Chicago Sun-Times and Minneapolis Star-Tribune.

While newspapers are trying to get readers with digital subscriptions and mobile apps, they are swimming against a powerful tide.

For the US daily newspaper sector over the past decade, weekday circulation has fallen 17 per cent and ad revenue more than 50 per cent, according to Pew.

And in 2014, three big media companies decided to spin off newspapers to focus on more profitable broadcast or digital properties.

"Every newspaper chain talks about getting digital faster. The plain truth is that despite almost two decades of effort, most aren't close to where they need to be," says Ken Doctor, an industry analyst who writes the Newsonomics blog and is a consultant for the research firm Outsell.

Soon, said Doctor, newspapers will have few options aside from cutting the frequency of the print edition, as several dailies have done, to save expenses.

Can't find a bottom

Doctor added that the industry has failed to increase revenue since 2008, making it harder to invest in digital. 

In the first quarter of 2015, seven of the largest newspaper groups made a combined profit of $21 million. In 2005, the large Gannett group alone earned $1.8 billion.

"These companies have little to invest," Doctor indicated. "They're still paying off debt, issuing dividends, keeping up with pension obligations, and anticipating print ad results that can't find a bottom."

Even The New York Times, among the most aggressive in shifting to digital news, acknowledged recently that 70 per cent of its revenues come from print.

But newspaper organisations need to rethink their strategy to act more like startups, says Alan Mutter, a former Chicago newspaper editor who is now a consultant on digital news.

"People in the media business have to recognise they're not in the print or broadcasting business, they are in the business of attracting audiences" to sell advertising, he indicated.

According to Mutter, many media organisations are under pressure to deliver quarterly earnings, which prevent a long-term strategy.

One exception is The Washington Post, which under new owner and Amazon founder Jeff Bezos has been expanding in news gathering as it refines its digital strategy.

This has paid off with a 65 per cent jump in digital visitors in the year through April, according to comScore figures.

Under Bezos, "the Post has invested in reporting and design, they have embedded technology and design people, they've done a lot of things right", Mutter said.

Although this has probably not translated into profits, Mutter added that "Bezos takes a long view and it's his own money".

Some newspapers have partnered with Facebook, which will host the content and deliver articles to users of the social network, potentially helping boost ad revenues.

Mutter said that even though newspapers had resisted such deals, they "swallowed their pride because they know they lack the sort of massive global reach that only Facebook can provide".

This, however, will only offer modest relief to newspapers, according to Mutter.

Motivating 'tribes' 

A study by the American Press Institute (API) released last month said a key for the industry is changing the culture of newsrooms to foster innovation. This includes allowing interaction of different groups, journalists, technicians and others which the study referred to as "tribes".

"To encourage innovation and transformation... organisations need to empower and motivate their tribes," the report said.

API deputy director, Jeff Sonderman, said cash-strapped newspapers can still invest and innovate by using a "lean startup" approach.

"Instead of spending a long time and a lot of money in a big attempt at something new, you spend a little bit of money on a small-scale experiment, and you build in small steps," he added.

Despite the downward spiral over the past decade, Sonderman noted that there are some positive signs.

"We see signs that publishers in the right environment with the right leadership are starting to stabilise and even grow in some areas," he said.

VIENNA — The Organisation of Petroleum Exporting Countries (OPEC) is likely to keep its output target unchanged when it meets on Friday because the global oil market appears to be in good shape and prices are expected to firm up from current levels, a senior Gulf OPEC delegate told Reuters.

Two more OPEC delegates expect no change in policy on June 5 when OPEC oil ministers are scheduled to meet in Vienna.

Oil prices have rallied after falling to a near six-year low close to $45 a barrel in January due to a global glut. Brent crude settled at $65.56 on Friday, up $2.98, or 4.8 per cent, on the day.

"It is unlikely that OPEC will make a decision regarding its production ceiling for two reasons: The first one that Russia and other non-OPEC producers have expressed their non-desire to cooperate in any idea of a production cut," the Gulf delegate said on Sunday.

"And the second one is that the market is firming up. Prices are expected to continue at current levels and most likely will go higher. Demand is also strong and the inventories are balanced. The market seems to be in good shape," the delegate indicated.

Crude oil inventories are above the five-year average but oil products stocks are within the five-year average, the delegate added.

"At the end, of course the final decision will be made by the ministers when they meet," the senior Gulf delegate continued.

Two officials from other OPEC producers made similar remarks.

"I don't think there will be any changes," said an official from an African OPEC member, referring to OPEC's output policy decision on June 5.

"Prices ... are within $60-$65, at least they are improving from where they were at before," another Gulf OPEC delegate said. "There is still an oversupply in the market, but the oversupply is less than what it was in November."

OPEC refused to cut output to shore up prices at its last meeting in November despite the glut, seeking to defend market share against higher-cost producers such as the United States. It left its output target at 30 million barrels per day.

The decision exacerbated the price fall from as high as $115 in June 2014.

However, early signs of slowing production in the United States and higher-than-expected growth in demand have helped drive the rally in prices from January's low.

AMMAN — An advanced technological platform under a sophisticated five-year strategy will transform Jordan Ahli Bank into a highly developed provider of banking services.

This thrust was announced Sunday at a press conference to mark the 60th anniversary of Jordan Ahli Bank which was established in 1955 and opened its first branch in downtown Amman/Al Rida Street on June 14, 1956.

Jordan Ahli Bank,  the first national bank set up in [East] Jordan by founders Yousef Muasher and Suleiman Sukkar with a JD250,000 capital, the bank is now the Kingdom's fourth largest with a JD175 million capital and 62 branches in Jordan, Palestine and Cyprus besides 117 automated teller machines (ATMs).

Total assets of the bank, which handles 390,000 accounts, amounted to JD2.3 billion at the end of the first quarter of this year. Total deposits and credit facilities reached JD1.9 billion and JD1.2 billion respectively. 

Marwan Awad, chief executive officer and general manager of Jordan Ahli Bank, told journalists that to keep up with technological developments, the T24 banking software system by Temenos was embraced because of its advanced technology and rich functionality.

"We wanted in the past years to carry out  many improvements to develop our products and services but were at a disadvantage because our infrastructure devices could not be employed towards that end," he said.

Under the new 2015-2020 strategy, customer centricity will be the key to a sustainable future, Awad stressed.

"All decisions and onward drive will evolve around customer service within a drive to raise production efficiency depending on information technology," the chief executive officer said, mentioning organisational changes within this context. 

He added that Jordan Ahli Bank will also keep up with various needs by introducing diversified banking products.

Awad indicated that the bank intends to focus on the Jordanian market and to expand its local share which he estimated to be 10-12 per cent at present.

He noted that there is no intention to raise the bank's capital but revealed that the monetary authority in Palestine wants each bank under its jurisdiction to raise the capital by JD25 million over the coming three years. 

Awad described the business and profitability of the seven branches that Jordan Ahli Bank operates in Palestine as very good.

Noting that market conditions in Jordan were tough, the chief executive officer said local businesses are still reeling from the repercussions of the international financial crisis or struggling due to the current regional developments.

Although he acknowledged that businesses were facing difficulties, Awad described the 6.5 per cent interest charged on 25-year housing loans as not viable, especially when the interest paid on deposits range between 3.5 - 4 per cent.

The chief executive officer remarked that higher interest charged on other credits balance the disparity, expecting this year’s profit to be about JD40 million, 10 per cent higher than the figure in 2014. 

He disagreed that most lending favour unproductive or consumer purchases indicating that 40 per cent of Jordan Ahli Bank's financing flows to the corporate sector, 30 per cent to retail, and another 30 per cent to small- and medium-sized enterprises (SMEs).

"Ads appearing in the media give the wrong impression that banks are primarily engaged in retail and consumer lending," he said.  

Awad underlined SMEs as an area of particular importance, noting that the bank also supports this segment through the subsidiary Ahli Microfinance Company which now employs about 130 employees from a labour force of about  25 staff members when it was established in July 1999. 

The support for SMEs, he said, can be seen in the activities of the SME Academy Unit which organises workshops to empower entrepreneurs with necessary business skills.

Awad also spoke extensively about corporate social responsibility whether in terms of financial or cultural contributions noting in this regard the Numismatic Museum which displays a variety of coins and books demonstrating a wealth of scientific and historical heritage.

He credited Raja'i Muasher who chaired the bank for more than 25 years for the growth achieved by the bank. Muasher also assumed several positions in the government including the post of deputy prime minister.

Asked about the trading price of the bank's share on the Amman Bourse, he replied that the fair value should at least be around JD2.

He urged shareholders to be vigilant not to undermine the value of the share at any cost, expressing doubt that the treasury shares option, when the company buys its own shares, would prop up the share value.  

On Sunday, the share price of Jordan Ahli Bank closed at  JD1.21.

AMMAN — Licensing, monitoring and supervising micro-finance companies have become the task of the Central Bank of Jordan (CBJ), as the 2015 Micro-Finance Companies By-law will go into effect as of June 1, a CBJ statement announced on Saturday.

The bank's decision to include these companies under its umbrella is in light of the sector's role in providing finances to low-income people or to those who cannot receive financial services from the banking sector. The decision will also help these categories of people achieve economic security through changing them from aid-receiving parties to productive ones.

The by-law defined micro-finance as: presenting finances and financial activities to low-income people or to those who cannot receive financial services, either in full or partially, from the banking sector, whether they are individuals, micro- or small-enterprises according to CBJ standards. CBJ added that it will work on developing the role of micro-finance sector and achieving its sustainability.

In the same regard, the by-law also banned any person from practicing any micro-finance activity without obtaining a licence from the CBJ unless he meets the requirements and conditions necessary for this purpose. As for current companies, the by-law granted them time to rectify their statuses.

AMMAN — The Finance Ministry is currently preparing an executive plan to apply international audit standards in the public sector to improve the quality of financial reports and increase transparency, Finance Secretary General Izzeddin Kanakrieh said Saturday.

At a workshop held within the financial reform project funded by the USAID, Kanakrieh added that applying international audit standards will enhance oversight and accountability, as well as facilitating decision making at the right time to guarantee the best use of financial resources. He added that Jordan will be among pioneering countries to apply these standards.

AMMAN — Jordan is keen on moving forward with the economic reform despite regional challenges, Amman Chamber of Commerce (ACC) President Issa Murad said Thursday.

On the sidelines of the signing of a memorandum of understanding between ACC and the Slovakian Chamber of Commerce, Murad said regional and international events are still affecting the national economy, noting the absence of political and security stability in neighbouring Syria and Iraq.

The memorandum aims at enhancing commercial cooperation, organising exhibition, marketing both countries' produce, exchanging economic information and visits of delegations, according to an ACC statement. Murad headed an economic delegation to Slovakia, comprising different sectors in the Kingdom, and organised several meetings with government officials in Slovakia.

AMMAN — Industry, Trade, and Supply Minister Maha Ali met on Thursday with a German delegation from the  Arab-German Chamber of Commerce and Industry, headed by Peter Ramsauer, chairman of the committee on economic affairs and energy.

Ali told the delegates during the meeting that Jordan has many economic and investment opportunities, especially in the renewable energy sector which is looked upon as a strategic choice to ease the energy problem in the Kingdom and diversify its sources. 

Ali said Jordan took various measures to encourage investment, noting that through a  law that was approved, a window was established to serve Jordanian and foreign investors by facilitating and accelerating the procedures of the investment process.

She also pointed out that Jordan signed many bilateral and multilateral free trade agreements such as the Grand Arab Free Trade Zone.

The delegates voiced interest in the investment opportunities, especially in the renewable energy sector, valuing the advantages, and mutual cooperation between the two countries in different fields.

CARACAS — President Nicolas Maduro has ruled out dollarising Venezuela's economy as a way to resolve the chaotic currency situation in recession-hit nation which is a member of the Organisation of Petroleum Exporting Countries.

Speculation Venezuela could adopt the US currency emerged after news this month that some local divisions of foreign car companies might charge in dollars due to their difficulties in obtaining greenbacks under the nation's currency controls.

But Maduro, the successor to socialist leader Hugo Chavez, said such talk was far off the mark.

"In Venezuela, there has not been nor will there be dollarisation. Our currency, proudly, is and will forever be the bolivar," he said in a phone call to state TV late on Tuesday.

Venezuelans were shocked last week when the bolivar, in unofficial trade, slid to 423 to the dollar, according to the widely tracked DolarToday website.

While it strengthened to 343 on Wednesday it still is far weaker than the official exchange rates. Maduro slammed the DolarToday site as being run by "ultra-right" opposition activists in Miami.

When Maduro came to power two years ago, the bolivar was trading at 23 to the dollar on that black market. Its slide has been a factor in creating the worst inflation in the Americas.

The government operates a complex, three-tier currency control system with the strongest rate of 6.3 bolivars per dollar for priority goods such as food and medicine, and the weakest rate of 200 via a "complementary" system called Simadi.

Last year's tumble in oil prices forced the currency control mechanism to reduce disbursement of greenbacks, spurring shortages of consumer goods and leading to panicked dollar purchases on the unregulated market.

Inflation last year was 68 per cent, and economists are widely predicting three-digit price rises this year. The government has not published data for the first four months.

Opposition critics say Maduro has delayed much-needed reforms to the country's state-led economic model, including an easing or elimination of the exchange controls.

Maduro says his socialist government is victim of an "economic war" led by opposition businesses with the support of the US government.

Businesses say they struggle to obtain dollars through either system, leaving them unable to import raw materials or replacement parts. That has led to long lines of consumers waiting to buy staple goods.

Government officials acknowledge that maintaining multiple exchange rates allows for corruption by businesses or public officials who buy subsidised dollars and then resell them for a hefty profit.

AMMAN (JT) — Airport International Group (AIG), the Jordanian company responsible for the rehabilitation, expansion and operation of Queen Alia International Airport (QAIA), announced Wednesday in a press statement a decline in QAIA's year-to-date (YTD) and monthly passenger traffic (PAX) and aircraft movements (ACM) during the first four months of 2015.

"For the first time in a consistent streak of traffic growth, route cancellations and regional political circumstances have triggered such a decline," the press release said, while indicating that positive results were registered across the board for cargo figures.

"The decrease in traffic during the first four months of 2015 was primarily attributed to the cancellation of routes, paired with ongoing disturbances in neighbouring countries, which led to fewer passengers and flights passing through the region and arriving at QAIA," the statement added.

Between January-April 2015, the Kingdom’s prime gateway witnessed an 8.5 per cent YTD decrease in passengers, reaching 2,089,816 PAX compared to 2,282,894 PAX during the same period in 2014.

ACM also dipped by 6.5 per cent to register 21,644 ACM as opposed to 23,153 ACM a year earlier.

Despite the mentioned drops, QAIA achieved 4.9 per cent YTD increase in cargo traffic, totalling 31,290 tonnes. 

AMMAN — Pearl Sanitary Paper Converting Company is still at a crossroads, unmanned and unable to determine the firm's future line of business.

According to a disclosure to Amman Stock Exchange, the company's functions at present are limited to capitalising on its trademark and renting the buildings and property until the economic situation improves and the outlook becomes clear to enable it determine future business activities.

The general assembly of shareholders agreed in 2009 to change the activities and line of business due to stiff competition faced by the company in upholding its products.

Subsequently, production was halted and the company's buildings were rented bringing down all expenses and administrative costs to a minimum.

The company's factory in the Naur area of Amman manufactured baby diapers, lady sanitary napkins, facial tissues, toilet and kitchen rolls, sanitary napkins, pocket tissues and table napkins.

"2014 was a year of continuity in achieving earnings to support shifting the activities of the company to investments and preparing to generate good income that would serve the interests of the firm and benefit the shareholders in line with the general guidelines drawn by the company  and, at the same time, to save costs and expenses until good investment opportunities arise to achieve higher growth and advancement,"  Chairman Mohammed Al Abdalat wrote in the 20th annual report. 

"The competent and well-studied planning of the business requirements and the persistent work to develop and reorganise the company is under way by the management  to choose the best activity amid the prevailing circumstances," he added, expressing hope that the best opportunity will be tapped in the future. 

Abdalat indicated in the foreword that the profit after tax and provisions, derived from rent and bank interest, amounted to JD45,351 last year.

Rent income in 2014 totalled JD160,400 and bank interest income was JD16,845.

According to the balance sheet as of December 31, 2014, total assets amounted to JD1.5 million, of which JD0.3 million were cash in banks and local companies; JD1 million was property and equipment, and JD0.2 million in various receivables. 

He mentioned that shareholders equity increased from JD1.18 million in 2013 to JD1.22 million, which comprised JD0.5 million in capital, JD0.4 million in mandatory reserve, and JD0.3 million in retained earnings.

According to annual report, Al Kina for Real Estate Investments Company owns 94.5 per cent of Pearl's JD500,000 capital.

Pearl's equity was reduced in 2012 when the general assembly decided to lower the capital from JD2.5 million through cash distribution to shareholders based on the stake of each investor.