Specialised Trading & Investments downsizes, returns unneeded excess funds to shareholders

AMMAN — Specialised Trading & Investments Company (STI) is returning JD1.2 million in cash to shareholders, describing the amount as unneeded excess funds.

The disbursement culminates a capital reduction by JD2.1 million, from JD3.1 million to JD1 million, that was previously approved by the general assembly of shareholders and the minister of industry and trade.

The company informed the Jordan Securities Commission in a disclosure that an announcement was published in Ad-Dustour Arabic daily on September 28, 2015, requesting investors who were in possession of STI shares on August 30, 2015, to contact its offices in Sweifieh to collect the money they are entitled to.

The general assembly agreed during an extraordinary session at the end of May 2015 to tap the voluntary reserve balance and write off JD45,422 of the company’s accumulated losses bringing it down to JD858,398.

The next step was to lower the capital to JD1 million from JD3.1 million, use JD858, 398 to write off the remaining losses, and return the JD1.2 million balance to approximately 250 shareholders.

According to the interim financial statements as of June 30, 2015, STI posted a JD57,069 gross profit generated from JD0.7 million in sales, during the first half of this year, down from JD72,277 registered during the same period of last year when sales were higher at JD0.9 million.

The company’s balance sheet showed total assets at JD2.6 million, JD1.4 million of which was cash and quasi money,  JD0.5 million were property, machinery and equipment and the remaining JD0.7 million were inventory and receivables. 

Chairman Munir Ahmad Al Quqa wrote in the annual report that the board of directors decided last year to build warehouses, stop trading in steel and substitute that by investing in other products with a suitable return.

In a foreword, he expressed hope that market conditions would improve in 2015 and that the company would achieve profit in the future, noting that STI ended 2014 with a JD253,516 loss.

The loss resulted after deducting expenses and provisions from the JD115,232 gross profit generated last year.

Although 2014 sales amounted to JD1.9 million,  26 per cent higher than the JD1.5 million posted at the end of 2013, the report attributed the slight decline in gross profit to the drop in steel prices and the disposal of steel inventory as the company shifted away from this commodity.

“The performance was affected by the continued fluctuation of steel prices in international markets during 2014 coupled with lower demand for steel in light of diminished economic and construction activity in the Kingdom,” the report said in mentioning the most important developments that impacted the company last year.

It added that the plan for 2015 was to look for other investment resources, build warehouses for storage, and increase the company’s local market share by boosting the sales volume of products that will be handled with a suitable rate of return.

Reflecting the business regression, the balance sheet as of December 2014 showed total inventory at JD0.3 million compared to JD0.5 million at the end of the previous year.

“Inventory represented 9 per cent of total assets at the end of 2014 compared to 17.5 per cent in 2013,” the report indicated.

It said that the 19.5 per cent fall in current assets from JD2.5 million to JD2 million was due to reduced stocks and other receivables.

Current liabilities stood at JD0.1 million, a 70.4 per cent fall from JD0.4 million at the end of 2013.

Consequently, total liabilities and shareholders equity dropped from JD3.1 million to JD2.6 million at the end of last year.

STI’s capital investment was calculated to be JD2.6 million as of December 31, 2014.

Ten employees worked at the company’s offices in Amman’s Sahab neighbourhood.

At the end of last year, the main STI shareholders were Al Salem Investments (23.3 per cent), Nadim Abdul Ahad Qattan (22.8 per cent),  Future Arab Investment Company (22 per cent), and Awni Al Saket and Partners Company (5.3 per cent).