Royal Jordanian (RJ) recorded an 8 per cent increase in operating profits in 2018, reaching JD653.3 million ($921.4 million) from the JD605.8 million ($854.4 million) registered in 2017, chairman of RJ’s Board of Directors, Said Darwazah, announced earlier this week.

Darwazah attributed the increase to a 4 per cent jump in the number of passengers, from 3.1 million in 2017 to 3.3 million in 2018, which increased the load factor from 71.2 per cent in 2017 to 73.8 per cent in 2018.

The financial results were announced during RJ’s general assembly meeting on April 28, which discussed the board’s report on the 2018 financial results and the business perspectives for 2019.

He pointed out that RJ’s net profits would have been higher if it had not been for the increase in fuel prices, which raised the total operational costs from JD527 million ($743.3 million) in 2017 to JD563 million ($794 million) in 2018, a significant 7 per cent increase.

RJ paid JD38 million ($53.5 million), or 31 per cent, more for fuel in 2018 (JD159.3 million/$224.2 million) than in 2017, when it paid JD121.5 million ($171.3 million). The fuel cost constitutes 28 per cent of the total operating cost.

RJ president/CEO Stefan Pichler made a presentation to the shareholders, and said that despite the rising fuel costs, RJ had an enhanced operating performance, registering a net operating profit of JD19 million ($26.7 million), an increase of 47 per cent over 2017, due to the JD47.5 million ($66.9 million) growth in revenues, a higher load factor and passenger numbers, cargo revenue, ancillary revenue and others.

He said that cargo sales also improved significantly; the company sold 55 per cent of the capacity offered for cargo on passenger aircraft, which resulted in JD45.6 million ($64.3 million) cargo revenues, a 12 per cent increase over 2017.

Pichler added that RJ continued to enhance its digital capabilities, resulting in 27 per cent more online sales, with a value of JD77.8 million ($109.7 million).

Regarding the end-of-year financial results, Pichler said that RJ achieved a 14 per cent increase in the gross profit in 2018, when it made JD90.4 million ($127.5 million) against JD79.5 million ($112.1 million) in 2017. However, the company recorded a net loss of JD5.9 million ($8.3 million) in 2018, while it achieved JD274,000 ($386,460) in net profits in 2017, due to the losses incurred from the operations of Royal Wings and the difference in exchange rates, mainly of the Sudanese pound.

He said that the decreased exchange rate of the Sundanese pound made RJ lose JD4.2 million ($5.9 million), and the Royal Wings losses made RJ incur JD3.9 million ($5.5 million) losses. RJ halted its operation to Sudan at the beginning of March 2019. It also suspended the Royal Wings operation at the end of November 2018. - TradeArabia News Service

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