Company raises capital to JD10m
AMMAN — The general assembly of the Union Tobacco & Cigarette Industrial (UTCI) summed up the company's last year achievements by approving the distribution of JD2.15 million in dividends to shareholders at a rate of 30 per cent and also raising the firm's capital by JD2.5 million to JD10 million.
The increase in capital will be executed through capitalising the JD2.5 million special reserve and distributing bonus shares to the shareholders at a rate of 33 per cent.
UTCI raised its capital by 50 per cent in mid-2003 bringing it up from JD5.0 million to JD7.5 million.
According to the 10th annual report covering the year 2003, the company is widening its production capacity by acquiring additional modern equipment and machinery and constructing new buildings and storage areas to keep up with the expansion drive.
Describing the 2003 results as remarkable, Board Chairman Rajai Salfiti told the general assembly that local and export sales rose by 14.1 per cent and that net profit increased by 21.4 per cent while shareholders' equity surged by 39 per cent.
The income statement as of Dec. 31, 2003, showed total sales at JD51.0 million compared to JD44.7 million at the end of 2002. After taking production costs into account, the gross profit amounted to JD7.65 million, 16.26 per cent higher than the JD6.58 million in gross profit posted in 2002.
The company indicated that the gross profit margin averaged 15 per cent when measured against the 2003 sales and 14.7 per cent when measured against the 2002 sales.
By taking into consideration selling, administrative and general expenses as well as bank interest and commission in addition to other income the net profit before tax and other provisions stood at JD5.6 million, 19.15 per cent higher than the JD4.7 million recorded in 2002.
Net after-tax profit amounted to JD5.1 million, a 21.4 per cent increase on the JD4.2 million recorded at the end of 2002.
Due to the capital increase in mid-2003, earnings per share stood at JD0.677 last year, down from JD0.836 in the previous year.
The UTCI balance sheet showed total assets at JD33.1 million, 25.8 per cent higher than the JD26.3 million total as of Dec. 31, 2002.
Current assets amounted to JD17.2 million of which JD7.3 million were goods and equipment in transit and JD5.7 million in inventory and spare parts. Cash on hand and at banks as well as receivables and cheques for collection amounted to JD3.6 million.
Fixed assets after accumulated depreciation were given at JD10.2 million whereas investments available for sale totalled JD5.1 million compared to JD2.3 million at the end of 2003.
Liabilities, at JD13.9 million, were 14.9 per cent more than the JD12.1 million in 2002 when total liabilities included a JD0.4 million long-term debt. Bank debt accounted for JD4.8 million of the total liabilities with JD5.3 million listed as accounts payable.
At the end of last year, UTCI's shareholders' equity included JD7.5 million in capital, JD7.8 million in various reserves, JD1.1 million in retained earnings and JD2.8 million in profit from adjusting the fair value of investments (shares) for sale.
Shareholders' equity, at JD19.2 million, increased 39 per cent over the JD13.8 million at the end of 2002.
UTCI, which employs 332 workers, began operations in 1993 at its factory in Jizeh (near the Queen Alia International Airport). Major shareholders include the Union Investment Corporation, the Housing Bank, the Union Bank for Saving & Investment, the United Arab Investors and Rajai Salfiti.
The company enjoys the franchise of manufacturing the brands of the British American Tobacco Company and relies on this firms for around 10 per cent of its purchases.
By Samir Ghawi
© Jordan Times 2004
