JPMC records mid-year net losses of JD59m
The Jordan Phosphate Mines Company recorded heavy losses in mid-year results due to the financial allocations for early retirement, a decline in sales and an increase in operational costs, a company source said on Sunday.
The JPMC's half-year results showed that net losses amounted to JD59 million, where JD41 million went to the Early Retirement Program. (ERP), the source, who asked not to be named, said.
The source indicated that the JPMC's mid-year sales also declined to JD99 million compared to JD120 million in the same period of the previous year.
The ERP was initiated upon a recommendation from Arthur Anderson Consulting, which was submitted to the company as part of the firm's restructuring plan to resolve the overstaffing problem.
At least 1,500 employees are expected to benefit from this program. The company has delayed its half-year results despite instructions from the Amman Stock Exchange which demand the disclosure of its mid-year results by the end of July.
The JPMC said the delay was due to the “technical reasons.” Among the reasons behind the delay was differences over which auditing rules that should be applied.
The JPMC was insisting on the local auditing standards while the auditing firm demanded the implementation of international standards. The JPMC losses in 1999 amounted to JD20 million.
The company's last year report showed that it has lost some of its traditional markets, namely South Korea, Bangladesh and Pakistan.
The firm's sales was affected by restrictions imposed by some countries, especially European countries, due to the environmental reasons which led to the closure of some factories in those countries.
The company's major markets are: India, Indonesia and Thailand. JPMC is looking for penetrating the markets in South Africa, Lithuania, Ukraine and Russia but it faces competitions from Morocco, Tunisia and the United States.
Earlier this year, the JPMC decided to freeze the second stage of expansion of the Shidiyeh mine with reserves of 804 million tones. It produces 60 percent of the Kingdom's annual phosphate production.
Observers believe that the JPMC might undertake privatization of some of its activities such as mining works, transportation of the company's product and maintenance work.
Meanwhile, the Arabic daily Al Arab Al Yawm reported that the JPMC is negotiating with two companies to sell its industrial complex in Aqaba.
Quoting unidentified sources, the daily said the company is negotiating with a French and a Norwegian company to privatise the complex, which produces cement.
The source was quoted as saying that the negotiations with the two firms was part of the JPMC's strategy to reduce losses and repay its debt to Citibank.
Last month, the director of the World Bank's Middle East and North Africa Department, Inder Sud, said that the mining industry should be included in the privatization program the Kingdom has launched in the past five years.
Currently, the mining sector is off-limit and is not included in the privatisation Law which was endorsed by the Lower House of Parliament in August.
( Jordan Times )
By Tareq Ayyoub
© 2000 Mena Report (www.menareport.com)