AMMAN -- Drop in the prices of shares held for trading by JD1.77 million wiped out the operational profit of the Jordan Express Tourist Transport (JETT) Company and drove it into loss.
JETT generated JD7.09 million in total earnings, 13.6 per cent or JD0.85 million more than the JD6.24 million total in 2005. It expects earnings to rise by 10 per cent in 2007.
After taking operational expenditures into account, the gross profit amounted to JD2.49 million compared to JD2.08 million in 2005.
But administrative expenses and, most importantly, "the change in the fair value of financial assets for trading" turned the company's JD5.83 million profit in 2005 into a JD0.11 million loss.
The loss widened to JD0.43 million after taking into consideration income tax payments.
According to the 14th annual report, JETT's financial investments for trading totalled JD3.06 million at the end of 2006, down from JD4.82 million at the end of the previous year.
Financial assets available for sale in both 2005 and 2006 were unchanged at JD3.97 million. The financial assets comprised mainly corporate bonds of Zara Investments Company and equity in the Jordan Hotels and Tourism Company.
Other assets shown in the balance sheet as of December 31, 2006 were JD1.71 million of spare parts and supplies, JD1.85 million of receivables and prepaid expenses, JD2.12 million in cash and balances at banks in addition to JD7.04 million of noncurrent assets, mainly buses.
Total assets were slightly lower as they dropped to JD19.74 million in 2006 from JD20.56 million in 2005.
Board Chairman Mohammad Saqer told the shareholders in a foreword to the annual report that JETT renewed its fleet by adding 25 large buses, 15 medium-size and two small buses at a cost of JD4.13 million.
On the other hand, it sold 14 old buses landing a JD0.2 million profit.
On the liabilities side of the balance sheet, the short- and long-term bank debt amounted to JD0.9 million while various payables totalled JD1.72 million.
Besides JD10.8 million in capital, reserves accounted for most of the JD17.11 million of shareholders equity, compared to JD19.14 million in 2005.
The company will begin on Tuesday to distribute JD1.30 million in cash dividends to shareholders at a rate of 12 per cent. In 2005, the company distributed JD1.62 million at a rate of 15 per cent.
In listing main achievements during 2006, JETT mentioned opening an office in Aqaba Port to operate the land transport between Saudi Arabia and Egypt through the sea junction (Aqaba-Nuweibah). Since it opened in June 2006 until the end of last year, the office's earnings amounted to JD0.14 million.
JETT also acquired a licence to provide limousine transport services and a preliminary approval to invest in marine tourism transport.
"The necessary feasibility studies are presently underway to invest in these two sectors," the annual report said.
In outlining its key future plan, JETT will be readying the company's land in Aqaba to absorb all workers there and to conduct maintenance of buses and cleaning operations.
It will also invest in building hotel apartments on a plot of land in Aqaba.
Although no decisions from the government or international organisations had material effect on the company, its products or competitive capabilities, JETT saw negative effects from "damaging competition" as the authorities continue to licence new companies, whether in the field of specialised tourism transport or in bus rental companies.
The company operates around 250 buses in a wide network of local and regional routes
Referring to statistics from the Ministry of Tourism and Antiquities that 263,636 tourists used the buses of tourist transport companies, JETT said that its share was 49 per cent or 130,585 tourists.
In terms of human resources, the annual report pointed out that the company cut its staff from 400 employees at the end of 2005 to 353 at the end of 2006.
Arab Supply and Trading Company owns a 21 per cent equity in JETT. Other main shareholders are the Bank of Jordan (15.2 per cent), Cairo Amman Bank (10 per cent) and Jordan Ahli Bank (5.6 per cent).
By Samir Ghawi
© Jordan Times 2007
