AMMAN -- The board of directors of Yarmouk Insurance Company (YIC) is studying offers from several investors to join the firm as strategic partners, Chairman Ibrahim Hussein Abul Ragheb told shareholders.
"The board will take a decision at the time it sees fit," he said.
In a foreword to the company's annual report, Abul Ragheb wrote that the future plan is "to examine means for increasing net shareholders equity in response to any future developments that may affect the laws and regulations with regard to raising the capital of companies operating in Jordan".
He said that YIC raised its capital in 2006 from JD2 million to JD5 million.
According to Abul Ragheb, the company will open new communication channels with major reinsurance firms in the international markets and move towards investment outside the insurance sector.
The balance sheet as of December 31, 2006 showed JD4.79 million of financial assets available for sale compared to JD7.31 million at the end of 2005.
"The board of directors has taken decisions to maintain the company's shares portfolio as it is considered to be blue chips, the majority of which were purchased at prices still below the market price," the 27th annual report said in reference to the adverse conditions that prevailed at the stock exchange during 2006 and led to a drop in the equity as a result of the change in the fair value.
Net real estate investment increased from JD2.17 million in 2005 to JD2.77 million at the end of 2006.
"During 2006, the company purchased 1,060 square metres of land in Al Rabiyah/Shmeiani," the annual report said. Selling a plot of land in Naour landed the company a JD0.79 million profit.
On the operations side, total underwriting revenue amounted to JD0.34 million last year, slightly less than the total in 2005.
However, total revenues were sharply down by 62.8 per cent as a result of the steep fall in "gains from financial assets and investments," which plunged from JD4.28 million in 2005 to JD1.59 million at the end of last year.
After taking into account various expenses, fees, provisions, bad debts and depreciation, the net income stood at JD1.27 million compared to JD3.72 million in 2005
Despite the lower profit, the company will be distributing JD750,000 in cash dividends at a rate of 15 per cent. In 2005, YIC distributed JD900,000 in cash dividends at a rate of 30 per cent.
34 employees work at YIC whose main shareholders are: Ali Hussein Abul Ragheb (11 per cent), Ibrahim Hussein Abul Ragheb (9.2 per cent), Awni Mousa Al Saket (8.75 per cent), Arab Iron and Steel Company (8.97 per cent) and Mohammad Shaher Al Araj (6 per cent).
By Samir Ghawi
© Jordan Times 2007
