Got milk? Jordanian dairy company shows annual growth in profits
Financial statements showed an upward trajectory at Jordan Dairy Company. (AFP/Jean-Pierre Muller)
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Quarterly and annual financial statements show an upward trajectory at Jordan Dairy Company.
According to an interim summary of the consolidated income statement as of March 31, 2015, Jordan Dairy generated JD0.4 million ($580,000) pretax profit, double the JD0.2 million ($280,000) recorded at the end of March 2014.
At the end of 2014, net profit was JD1.3 million ($1.8 million), rising from JD1.1 million ($1.6 million) in 2013, JD0.7 million ($1 million) in 2012 and JD0.3 million ($420,000) in 2011.
The income statement covering the first quarter of this year, indicated that net sales rose to JD4.2 million ($5.9 million) from JD4 million ($5.6 million) in the first quarter of last year.
Total sales at the end of 2014 were JD17.1 million ($24.1 million), rising from JD16.4 million ($23.1 million) in 2013, and JD14.5 million ($20.5 million), JD11.5 million ($16.2 million), and JD10.6 million ($15 million) in the preceding years.
With production costs slightly higher, gross profit during the first three months of this year came at JD0.9 million ($1.3 million), compared to JD0.7 million ($1 million) during the January-March period of 2014.
The gross profit was derived about equally from two operations run by Jordan Dairy, the first being the production and distribution of fresh milk and milk products, including pasteurised milk and white cheese, in addition to the manufacture of plastic bottles for the company’s purpose.
This function is carried out at factories located in Russeifa area.
The second activity is raising and fattening livestock at a farm in Mafraq, through the subsidiary Al Maha for Agriculture and Animals Investments Company.
Assets of the overall business, including investment activity but excluding cash and quasi cash, totaled JD10.6 million ($15 million) at the end of March 2015, with the industrial share at JD5.2 million ($7.3 million), followed by farming at JD4.5 million ($6.4 million).
Current assets amounted to JD6.4 million ($9 million), of which JD0.9 million ($1.3 million) were cash and cash equivalent, JD1.8 million ($2.5 million) net receivables, and JD1.5 million ($2.1 million) net inventory.
Capitalised at JD4 million ($5.7 million), the company's JD9.2 million ($13 million) net shareholders equity included JD2.4 million ($3.4 million) retained earnings, JD1.2 million ($1.7 million) mandatory reserve, and JD1.3 million ($1.8 million) issuance premium.
According to the 2014 annual report, the company does not have export markets and relies on the domestic outlets for its local sales which are channelled via mega- stores, groceries and government tenders.
Jordan Dairy estimated its market share at 10-12 percent of the overall sales by companies that were in the same line of business.
Chairman Ahmad Mufleh Al Horani commended the accomplishments that were achieved despite the rise in electricity charges and some production inputs and the inability to raise prices due to the limited local market and tough competition.
Horani, who owns a 75.7 percent stake in Jordan Dairy, said the company was able to surmount negative effects brought by unfavourable international conditions and regional instability that are weakening the local economy and pressuring the industrial sector with difficulties and challenges.
Listing key plans for future development, the annual report mentioned the installation of a modern cooling system at Jordan Dairy, upgrading production lines, and setting up a milking machine with a capacity to deal with 24 cows in order to raise the production output of the subsidiary firm.
The report showed Jordan Dairy's capital investment at JD6.2 million ($8.8 million) and indicated that the company's labor force at the end of last year comprised 265 employees.
Cash dividends to shareholders for the year 2014 amounted to JD0.6 million ($850,000), at a rate of 15 percent.
For 2013, the company distributed JD0.4 million ($560,000) in cash dividends to shareholders, at a rate of 10 percent.
By Samir Ghawi
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