Business

AMMAN — Investments in the tourism sector since the establishment of the Aqaba Special Economic Zone Authority (ASEZA) in 2001 until the end of 2014 reached JD14.6 billion, ASEZA Chief Commissioner Hani Mulki said Monday, noting that the figure covers projects that were executed and those in the pipeline.

He indicated that Investments in logistics, warehouses, industry and transportation, amounted to  JD1.81 billion, while commercial investments were valued at JD198 million, Mulki added, pointing out that commercial facilities increased by 600 per cent last year compared to those in 2001.

He described ASEZA's terminal system as the most prominent investment because it addresses the energy supplies amid regional instability.

Work in the comprehensive Jordanian terminal system, which includes 28 specialised harbours, is scheduled to finish in 2016, the chief commissioner noted.

"What is needed today is reconsidering legislation organising investment and ways to attract it, in addition to reviewing past obstacles in order to amend relevant regulations until reaching an investment environment more suitable for investors' needs," he concluded. 

AMMAN — Accumulated losses eroded 90 per cent of Midpharma's capital by the end of the first quarter of this year, prompting shareholders to grab the issuance premium for a lifeline. 

Arab Professionals, the auditor which is a member of Grant Thornton, indicated in the interim consolidated financial statements, that the accumulated losses of Middle East Pharmaceutical and Chemical Industries and Medical Supplies Company at the end of March 2015 totalled JD8.8 million, or 90 per cent of JD9.9 million paid-up capital.

Shareholders agreed during a recent extraordinary meeting of the general assembly to lower the accumulated losses by tapping the full JD2 million issuance premium..

According to the auditor's report, the loss during the first three months of this year amounted to JD1.4 million compared to JD1.1 million loss during the same period of 2014. 

The profit and loss statement showed that net sales during the January-March period of 2015 fell sharply to JD0.1 million from JD0.8 million in the first quarter of last year.

The balance sheet at the end of March 2015 showed Midpharma's debts to banks amounted to JD8.6 million.   

Assets totalled JD19.7 million, of which JD10 million were fixed, JD3.5 million of inventory and JD3.5 million in receivables. 

The auditor said the gravity of the deficit require the company to inform the Jordan Securities Commission and Amman Bourse about the extent and reasons for the losses as well as the proposed remedial plans.

Chairman Mazen Hamzeh Tantash told the shareholders that this (difficult) phase will be overcome and that the company will work to fundamentally put an end to adversities, noting that funds have been injected in the company, and mentioning in particular JD2 million that were inserted by the end of 2014.  

"Around JD1.5 million of liquidity is available from the company's sales this year and funds have been deposited by partners in payable accounts," he said during the meeting.

Noting that the JD1.5 million was enough to buy raw materials and get the production cycle rolling, the chairman described this position as the minimum.

"This is the situation at present in the company to exit the bottleneck," he added. 

Tantash indicated that Middle East Pharmaceutical and Chemical Industries and Medical Supplies Company will later increase the capital and inject funds at that time to buy raw materials.

He referred to the "flammable" regional as a main factor that confounds business activities in terms of opening letters of credit and delaying the procurement cycle, pointing out that Midpharma's warehouses are receiving a considerable volume of goods returned from distributors unable to sell the company's products.        

He expressed special thanks to Midpharma's 237 employees (229 in Jordan and 8 at a subsidiary in Algeria) for their patience and endurance despite delay in paying salaries.

"The board of directors realises the importance of human resources for the success of the company, and even if we have to pay staff in advance," he said. "But, the company's situation that is under pressure and the lack of liquidity are among the reasons delaying salary payments."

"Members of the board, senior Midpharma executives and staff will exert maximum efforts to come up with a strategic solution that would serve the interests of shareholders, suppliers, customers and employees in entirety," the chairman added.

Midpharma operates two plants situated on about 32,000 square metres of land it owns at Mubas near Baqaa refugee camp, 20 kilometres north of Amman.

Besides the plants that produce medicines in a wide range of pharmaceutical forms, the site includes the warehouses, laboratories, control departments and buildings housing marketing and financial management.

Responding to a question from a shareholder, Tantash clarified the misconception about a plant in Algeria indicating that, in 2015, a 21-dunum plot of land in the industrial estate was allocated to the company to build a factory within three years. 

"We are now waiting for the contracts to be signed," he said, noting that the projects are old.   

In the 2014 annual report, Tantash described the conditions as difficult and beyond its control as a result of erratic cash flow in addition to regional instability.

He said that because of an increase in financial burden, the company's liquidity became more strained and had to be handled on a daily basis.

The financial statements at the end of last year revealed that financing charges exceeded JD1 million, valued the capital investment at JD9.7 million and showed sales in sharp fall to JD6.6 million (JD10.4 in 2013) million, attributed to economic recession and the international financial crisis.

Noting that exports to Saudi Arabia, Sudan, Yemen, Lebanon, Libya, United Arab Emirates, Qatar, Bahrain, Oman, Kuwait, Iraq, Syria, Algeria, Sri Lanka and Azerbaijan  accounted for JD3.5 million of total sales,  the company's 21st annual report listed sales to markets in North Africa, Europe, Kazakhstan and Azerbaijan as top priority for this year's plans.

Midpharma also plans to obtain franchises from international companies to produce new products or to obtain contractual manufacturing deals to exploit the plant's full production capacity.

Middle East Pharmaceutical and Chemical Industries and Medical Supplies Company closed 2014 with a JD2.3 million loss (JD0.4 million) after a halved gross profit that reached JD2.2 million (JD4.6 million).

AMMAN — Eagle Hills, an Abu Dhabi-based private real estate investment and development company, announced Sunday in a press  statement the official appointment of Alaa Batayneh as the chief executive officer for its Jordan operations.

"The responsibilities  cover all development, projects and investments for Saraya in Aqaba and Amman, and Al Maabar, a subsidiary of Eagle Hills and the developer of Marsa Zayed in Aqaba and The St. Regis Amman and The Residences at The St. Regis Amman," the press release said. Batayneh is a former minister of energy, transport, and public works.

He is currently a senator in the Upper House of Parliament. Batayneh holds a bachelor of science degree in electrical engineering and a master’s degree in management information systems from the George Washington University in Washington, DC.

AMMAN — The total trade exchange between Jordan and Egypt reached $656.5 million in 2014 compared to $817.8 million in 2013, Industry, Trade and Supply Secretary General Ramzi Shawish said Sunday.

He added at the 25th meeting of the technical preparatory committee for the Joint Higher Jordanian-Egyptian Committee that the total trade exchange in the first quarter of 2015 stood at $136.9 million, 27 per cent lower than the same period of 2014 when it reached $187.6 million.

Shawish called for benefiting from available opportunities through enhancing joint investments, and utilising the Grand Arab Free Trade Zone, which reached a full level of liberalisation in 2005, and the joint free trade agreement signed between Jordan and  Egypt in 1998.

Fathi Abdul Athim, head of the Egyptian side and first undersecretary of the Egyptian ministry of international cooperation, stressed the importance of enhancing bilateral cooperation at all levels, especially economic ones, urging the private sector to take advantage of available opportunities in both countries.

STOCKHOLM — With the latest effort by Sweden to cool its housing market postponed by a court, concerns are escalating that political stagnation, a faulty institutional set-up and high household debt risks sending the triple A economy into a tailspin.

A move to force homeowners to pay down the principal of their mortgages, what many economists say is the very least needed to avoid a housing bubble, was postponed after a court in April said the Swedish Financial Supervisory Authority (FSA) lacked a legal mandate.

"The housing market in this country is dysfunctional and households are borrowing more and more and more," said Stefan Ingves, the governor of Sweden's central bank.

"This is one of those places in the world where the indecision bias has figured prominently and we are still seriously heading in the wrong direction," he added.

His remarks highlight the bank's quandary, forced to cut rates and buy bonds to ward off deflation while a fast-growing economy and low rates are pushing home prices up at the same time. 

With a bubble already feared, gross domestic product grew 2.7 per cent in the fourth quarter, the fastest in more than three years.

The legal setback, which may only be resolved next year as lawmakers scramble to rewrite the FSA's mandate, could have been a small problem if other policies were on the cards.

But with nothing else in the pipeline, it showed the extent of political stagnation and institutional impasse after the central bank was stripped of regulatory powers, hindering regulatory reform.

"My firm opinion is that we should accelerate the pace," said former finance minister Anders Borg. "But I have the impression that the opposite is true."

TEHRAN — Iranian President Hassan Rouhani called Sunday for national unity to liberate the economy from international sanctions, which he compared to a form of occupation.

"We must join hands and free our economic territory which was unjustly occupied by the countries of the P5+1 [Britain, China, France, Russia, the United States and Germany] and the UN Security Council... through use of diplomatic and political tools," Rouhani said in a televised speech.

The P5+1 group is trying to negotiate a deal with Tehran aimed at preventing Iran from developing nuclear weapons, in exchange for an easing of punishing economic sanctions.

Iranian hardliners have opposed any deal curbing nuclear activities that Tehran says are for peaceful energy purposes.

The UN Security Council adopted six resolutions, four of which imposed sanctions, against Iran's nuclear and missile programmes between 2006 and 2010.

Since 2012, the United States and the European Union have also applied a series of unilateral sanctions that specifically target the energy and banking sectors.

Iranian oil exports have fallen from more than 2.2 million barrels per day (bpd) in 2011 to about 1.3 million bpd, and Iran is banned from the SWIFT global banking network.

"The enemies keep us from selling our oil," Rouhani said in the speech to mark the 33rd anniversary of the liberation of the Iranian city of Khorramshahr, a symbolic victory in the Iran-Iraq war of 1980-1988.

The banking industry is also under a form of occupation because "we cannot send or receive money" overseas, he said.

"It is as if blood was prevented from flowing in [our] veins," Rouhani added.

In early April Tehran and world powers concluded a framework agreement aiming to pave the way for a final nuclear agreement by June 30.

Political and technical experts from both sides held talks on drafting the text in Vienna on Friday with negotiations due to resume on Tuesday in the Austrian capital.

Separately, Iran's Oil Minister Bijan Zanganeh reportedly said on Sunday that the Organisation of petroleum Exporting Countries (OPEC) is unlikely to change its production ceiling when the group meets in June, according to the semi-official Mehr news agency.

"Lowering OPEC's production ceiling requires consensus between all members... under current conditions it seems unlikely that the OPEC production ceiling will change," Zanganeh was quoted by Mehr as saying.

Last month, Zanganeh said the producing group should cut its target daily crude production by at least 5 per cent, or approximately 1.5 million bpd.

OPEC will meet on June 5. At its last meeting in November, OPEC, led by oil kingpin Saudi Arabia, decided against cutting output to defend its market share, resisting calls by some members such as Iran and Venezuela to reduce production to shore up prices.

Brent oil settled down $1.17, or 1.8 per cent, at $65.37 a barrel on Friday.

Lower oil prices have caused pain for OPEC's less wealthy producers, including Iran. While the June 5 meeting in Vienna is likely to hear renewed demands from some OPEC members for a reduction in the amount of oil pumped, even officials from countries which favour a curb see it as unlikely.

Iran wants other OPEC members to make way for a rise in its exports if it succeeds in reaching a final deal with six world powers over its nuclear programme.

BRASILIA/RIO DE JANEIRO — Brazil will freeze 69.9 billion reais ($22.58 billion) worth of spending on investment, education and health programmes this year, limiting outlays in a bid to convince investors that President Dilma Rousseff is committed to saving the nation's investment-grade rating.

In addition to cutting the budget, Rousseff earlier on Friday raised the income tax for banks, another sign that her government is ready to push ahead with austerity despite stiff political opposition.

The budget freeze, which was in line with market expectations, was the largest since Rousseff took office in 2011 and will bring discretionary government spending back to levels of 2012.

"This is a big effort that indicates the government willingness to meet our goal," Planning Minister Nelson Barbosa told reporters in Brasilia. "This is the first step for Brazil to return to growth."

Still, most analysts believe the freeze will not be enough to meet Brazil's fiscal surplus goal of 1.1 per cent of the gross domestic product (GDP). The government lowered the goal from 1.2 per cent after a revision to GDP figures of recent years.

Last year's freeze, which is an annual commitment not to spend on already budgeted items, was 44 billion reais.

Barbosa said the government will freeze a total of 21.2 billion reais for education and health, but that priority social programmes will be preserved.

Since winning a close reelection in October, Rousseff has raised taxes on everything from cosmetics to cars and limited spending to rebalance public accounts and shield Brazil's credit rating after years of lavish spending.

That austerity faces fierce resistance from Rousseff's allies in Congress, who believe more tightening will only worsen an expected recession. Lawmakers have watered down two measures cutting pension and unemployment benefits.

To make up for the losses, Rousseff raised the income tax rate for banks to 20 per cent from 15 per cent to collect 4 billion reais in revenues annually.

International Monetary Fund (IMF) chief Christine Lagarde, visiting Rio for a central bank event, applauded Rousseff's austerity drive, saying the freeze "demonstrates the political courage and the determination" to hit the government's target.

As in Europe, fiscal austerity is raising political tensions and starting to weigh on Brazil's once-booming economy.

Economic activity tumbled in the first quarter and unemployment surged to a four-year high, official data showed. Economists expect the Brazilian economy will shrink 1.2 per cent this year, according to a central bank poll.    

The head of the IMF encouraged Brazil Thursday to pursue fiscal discipline, saying it was needed to protect social programmes benefitting the poorest members of society.

Lagarde made the link during a visit to Complexo do Alemao, one of Rio's largest and most dangerous slums, and a visible example of the challenges facing Brazil as it struggles with low growth and high inflation.

She chatted with a group of women, who had received government aid and training that enabled them to open small businesses in Complexo do Alemao and other favelas in Rio.

"Fiscal discipline is the necessary basis for financing programmes like these," Lagarde stressed. "They go together, they go hand in hand."

"The people who suffer the most with fiscal indiscipline at the end of the day are generally the poor," she said. 

The IMF earlier this year urged Brazil to "strengthen the credibility of economic policy".

The world's seventh largest economy has endured four years of slow growth and this year the IMF predicts a 1 per cent contraction amid rising inflation.

It is now cutting back spending with a goal of producing a surplus of 1.2 per cent of GDP.

Some 60,000 people live in the Complexo do Alemao, grouping 15 favelas where residents often have to run the gauntlet during shootouts between police and drug traffickers.

As well as offering economic advice, Lagarde watched a demonstration of capoeira, an Afro-Brazilian martial art comprising elements of dance and visited a centre where locals sign on to the Bolsa Familia family assistance programme.

The government-financed scheme and other social programmes are credited with lifting tens of millions of Brazilian families out of absolute poverty over the past decade.

To obtain the stipend, families must ensure that their children attend school and participate in vaccine programmes.

Lagarde saluted the Bolsa Familia scheme as having produced "absolutely exceptional" results.

"The fact that Brazil spends 0.5 per cent of GDP on the fight against poverty via its Bolsa Familia is remarkable," she told reporters.

KUWAIT CITY - Gulf oil producers, led by Saudi Arabia, will resist attempts to cut output at a Organisation of Petroleum Exporting Countries (OPEC) meeting next month as preserving market share remains their top priority, industry analysts said.

A decision by the 12-member OPEC not to cut production in November sent prices crashing 60 per cent before a partial recovery in recent weeks.

Gulf and other OPEC members said they wanted to safeguard their share of a market that has faced a supply glut as a result of sharp increases in the production of shale and sand crudes.

“Preserving market share still remains a top priority for Gulf states,” Saudi economist Abdul Wahab Abu Dahesh said.

“This time they are even encouraged by signs their November strategy is working after a drop in US shale oil production and in the number of rigs,” Abu Dahesh told AFP.

In the face of the sharp drop in their earnings, some OPEC members, led by Iran and Venezuela, have publicly called for the group to cut production to support prices.

“I don’t think that any change will happen at OPEC’s meeting,” a former member of Kuwait’s Supreme Petroleum Council, Musa Maarafi, said. “Gulf states will continue to defend their market share and it is their right to do so.” 

“They will not accept to cut output at their own expense unless an agreement is reached with non-OPEC producers,” he added.

The burden of any cut in OPEC output would likely fall on the group’s Gulf members, Saudi Arabia, Kuwait, the United Arab Emirates (UAE) and Qatar, whose production has risen by around 3.5 million barrels per day (bpd) since 2011.

Currently, they pump 16.8 million bpd, or 55 per cent of OPEC’s total, with Saudi Arabia accounting for 10.3 million bpd. They export around 12.5 million, almost two-thirds of the group’s total.

Mounting competition

Head of marketing at national oil conglomerate Kuwait Petroleum Corp. (KPC) Jamal Al Loughani told a symposium last week that a change in the global energy map has made market share a highly sensitive issue.

He said the sharp rise in US production to 9.4 million bpd had allowed Washington to stop light crude imports from Africa. 

It also cut imports of heavy oil from Latin America, substituting it with Canadian sand oil. 

“That led African and Latin American exporters to seek new markets in the east,” said Loughani, indicating that more than 3 million bpd of additional high good quality crudes are being pumped into these markets in competition with Gulf exports.

“That places additional pressure on OPEC members, especially Gulf exporters, to cooperate to maintain market share and even ensure new takers for additional quantities in the future,” he added.

A relative rebound in prices and a drop in US shale oil output is likely to convince OPEC to continue with its strategy.

Data from the US Department of Energy showed US crude production dropping 112,000 bpd to 9.26 million bpd in early May.

“Prices are improving, growth in supplies from outside OPEC, especially shale oil, is lower than before and demand is recovering,” Kuwait’s governor at OPEC Nawal Al Fuzai told reporters last week.

Over the past few weeks, oil prices have climbed about 40 per cent but remain well below their levels of more than $100 a barrel in June last year.

Fuzai said crude oversupply dropped from around 2 million bpd late last year to between 1 million and 1.2 million now.

But Commerzbank warned in early May that “the oil market will continue to be oversupplied until OPEC significantly cuts its output”.

And the International Energy Agency (IEA) reported that the group’s output hit 31.21 million bpd in April, the highest level since September 2012.

“It would thus be premature to suggest that OPEC has won the battle for market share,” the IEA said. “The battle, rather, has just started.”

Separately, Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world’s biggest crude importer hits new records.

While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 per cent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market.

Senior Chinese oil traders told Reuters the Saudis have turned down requests from Chinaoil and Unipec, the respective trading arms of PetroChina and Sinopec, for extra cargoes of crude for May and June loadings, forcing them to seek supplies from producers in West Africa, Oman and Russia.

Saudi Arabia “used to provide as and if we asked for extra cargoes on top of contract during the first four months of the year, but not for May and June”, said a trader with one of China’s biggest oil importers on condition of anonymity as he had no permission to talk to media.

Another source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was “a bit tight” in May and June.

Reuters pricing and trade flow data show a 40 per cent rise in Brent crude since January has coincided with a more than 10 per cent fall in overall Middle East supplies to China , although in historical terms they remain high.

“Our analysis shows that Saudi flows to China have fallen quite a bit in May and their overall market share in China has also fallen,” said Yan Chong Yaw, Director of Thomson Reuters Oil Research and Forecasts in Asia.

The research group’s latest China crude report shows Saudi Arabia’s share of Chinese imports dropped to just over 30 per cent in May from 36.5 per cent in April.

Saudi Aramco, which was not available for comment, had already reduced contractual supplies to some Japanese and South Korean customers in April.

The trader with one of China’s big importers said requests for more crude to Kuwait and the UAE, Saudi Arabia’s closest partners in OPEC,  were similarly turned down.

PetroChina and Sinopec officials were not available and seldom comment on trading activity.

With imports of 7.4 million bpd, China overtook the United States as the world’s top crude oil buyer in April.

Needs of their own

Behind the stingier responses to requests for more oil lie mostly domestic factors. Saudi Arabia has traditionally been an exporter of crude oil but an importer of refined products.

That’s changing. Its new 400,000 bpd Yasref refinery became fully operational in April, taking in Saudi heavy crude oil to produce and export petroleum coke, diesel and gasoline.

Saudi Aramco started up its Jubail refinery of the same size last year and also plans to build a third 400,000 bpd facility by 2018.

Other Middle Eastern producers such as the UAE’s Abu Dhabi National Oil Co are also ramping up refineries, and the region is entering its peak burning season in which it uses more crude to generate power for air-conditioning.

“Over the summer, Middle East producers, particularly Saudi Arabia and Abu Dhabi, will have limited additional barrels for sale as new refineries continue their ramp up and increased summer burn absorbs supply,” said US-based research and analysis provider Pira Energy.

Supplies of heavy grades have also been tightened by the shutdown of two fields jointly operated by Saudi Arabia and Kuwait,  the Khafji in October for “environmental issues” and the Wafra last week for maintenance amid a land dispute, taking nearly 500,000 bpd of oil out of production.

Asian customers have as well been wary of the quality of Iraq’s new Basra Heavy grade and trying to switch to other crudes, according to industry sources.

Despite turning down some Asian requests, Saudi Arabia and its Middle East allies are still keen to meet as much Asian demand as possible.

The refusals come weeks after veteran Saudi oil minister Ali Al Naimi visited Asia and said demand for its oil was strong, but that Saudi Arabia’s record oil output of over 10 million bpd was ready to meet the needs of its clients.

OCCUPIED JERUSALEM — Gaza's economy is in a worse state than any other in the world, with unemployment at a global high, output contracting sharply and the long-term prospects worrying, the World Bank said on Friday.

Repeated rounds of conflict, internal divisions and the embargo Israel and Egypt impose have left the territory "on the verge of collapse", the report said, with its 1.8 million population facing poverty and destitution despite vast aid.

"Blockades, war and poor governance have strangled Gaza's economy and the unemployment rate is now the highest in the world," indicated the report, drafted by Steen Lau Jorgensen, the World Bank's director for Gaza and the West Bank.

It is to be presented in Brussels on May 27.

"Gaza's exports virtually disappeared and the manufacturing sector has shrunk by as much as 60 per cent. The economy cannot survive without being connected to the outside world," the report said.

Among the startling statistics cited in the report are:

Overall unemployment now stands at 43 per cent, and 68 per cent among those aged 20-24.

Gaza's current real gross domestic product (GDP) is only a couple of percentage points higher than it was 20 years ago. Over the same period, the population has increased by 230 per cent.

Last year's war between Israel and Hamas led to a 15 per cent contraction in GDP for the year.

Real per capita income in Gaza is now 31 per cent lower than it was in 1994.

Between 1994 and 2012, Gaza's manufacturing sector, which should be the driver of the economy, shrank by 60 per cent.

 Disease a threat

While the World Bank tracks Gaza's malaise back more than 20 years, the economic deterioration has accelerated since 2006, when Hamas won elections and began running the territory, taking over full control in 2007.

Since then, there have been three wars between Hamas and Israel, with Hamas firing rockets across the border and Israel responding with artillery, air strikes and ground forces.

The war in July-August 2014 was the most devastating, with more than 2,000 Palestinians killed and 120,000 houses damaged or destroyed. More than 70 Israelis were also killed.

On top of the conflicts, internal divisions have conspired against Gaza, with Palestinian leaders in the West Bank determined to freeze out Hamas and its authoritarian rule.

And then the blockade, first imposed by Israel in 2007 and later joined by Egypt, has compounded the problems: exports from Gaza have fallen to almost zero since 2007, while imports are equally small and heavily restricted.

As well as the raw economic impact, the World Bank highlighted the socioeconomic and mental toll the situation is having. More than 80 per cent of Gazans receive some form of aid, but 40 per cent remain below the poverty line. 

Mental health and trauma experts estimate that a third of children displayed signs of post-traumatic stress disorder even before the 2014 conflict.

"The status quo in Gaza is unsustainable," Jorgensen said in the 40-page analysis. "The feeling of hopelessness is pervasive, in particular following the summer 2014 war.”

"The access and quality of basic services such as electricity, water and sewerage is rapidly deteriorating and pandemics of infectious diseases are a real threat," he concluded.

AMMAN — Jordan Securities Commission last week authorised Philadelphia Pharmaceuticals Company to raise its capital to JD5 million.

The capital increase from JD3 million will be achieved through capitalising JD2 million of retained earnings and distributing them as bonus shares at a rate of two for every three shares held by shareholders on June 2, 2015.

The bonus shares mark the first dividends given to shareholders since Philadelphia Pharmaceuticals became a public shareholding company in 2006.

After few years of losses and weak performance, the company forged ahead in 2013 when sales shot up to JD4.5 million from JD1.2 million in the previous year and the JD0.5 million loss recorded in 2012 turned into a JD0.6 million profit that expanded significantly in 2014.

According to 9th annual report as of December 31, 2014, sales surged by 132 per cent reaching JD10.4 million, of which JD7.7 million were exports and JD2.7 million were local sales.

The net profit at the end of last year amounted to JD3 million, 364 per cent higher than the JD0.6 million generated in 2013.

During the first quarter of this year, Philadelphia Pharmaceuticals increased sales to JD3 million, 15.4 per cent higher than the JD2.6 million registered during the first three months of 2013.

Net profit at the end of March 2015 came at JD0.8 million compared to JD0.7 million at the end of March 2014.

The balance sheet as of March 31, 2015 showed total assets at JD9.3 million, of which JD1.9 million were property, equipment and machinery. Receivables accounted for JD4.8 million of the total assets.

As of March 31, 2014, total assets amounted to JD7.9 million, JD3.3 million of which were receivables.

Of the JD2.5 million in total liabilities, loans and bank credits stood at JD1.2 million, compared to JD0.9 million at the end of last year's first quarter when total liabilities were JD1.9 million.

Auditor PricewaterhouseCoopers Jordan indicated in a quarterly review report that the company's operations are marked by credit risk concentrations as sales to four principal clients represented 94 per cent of the total compared to an 88 per cent rate in 2013.

Although four primary customers also owe the company 96 per cent of total receivables, compared to 89 per cent in 2014, the auditor said the company did not encounter any problems in collecting its dues from those clients in the past.

Chairman Munther Ahmed Hussein wrote in the annual report that Philadelphia Pharmaceuticals changed the operation mechanism in one the company's main markets and also changed two of its agents abroad.

He highlighted Gestophil as a new hormone product that the company started marketing in Iraq besides the local market, indicating that new brands were acquired to be marketed and sold in Gulf Arab countries and Iraq.

"Based on set plans, several new products will be launched this year," the chairman said in a foreword, indicating that Philadelphia Pharmaceuticals will be entering in 2015 one of the big and promising markets within its field.

Noting that the company's top priority was to have distinguished and qualified staff, Hussein said that the number of employees increased last year to 134 from 88 workers to keep up with advancement, especially the research and business development departments.  

Hussein mentioned raising the manufacturing efficiency with new production, packing and packaging equipment, and stressed the importance of development and registration of new products.

According to the annual report, capital investment at the end of last year amounted to JD7.9 million.

Shareholders equity was higher at JD5.9 million compared to JD2.9 million at the end of 2013.

The factory, situated on a 4,479 square metres of land in Sahab, operates two main production lines spread over 3,599 square metres, Another 943 square metres are ready for future expansion.