RJ holds its Annual General Meeting
31-Mar-2013 Lozi: We are proud to reverse the net loss of 2011 into a JD1.1 million net profit in 2012
RJ transported 3.4 million passengers and made JD802 million in revenues in 2012
Hadidi: We endeavor to implement an ambitious plan to achieve revenues other than from transporting passengers and cargo
Amman, March 30, 2013 - The RJ general assembly held its ordinary annual general meeting on March 28 at the Sheraton Hotel, Amman, presided by Nasser Lozi, chairman of the RJ board of directors. Attending were members of the board of directors, RJ President/CEO Amer Hadidi, RJ's Chief Finance Officer Omar Saeed, the companies' general comptroller Burhan Akroush, Ernst and Young auditors of RJ accounts, and a number of shareholders owning 60% of the company capital, which amounts to 84.3 million shares/dinars.
Lozi's speech, which was distributed to the shareholders, said that Royal Jordanian, which celebrates its 50th anniversary this year, endeavors to execute a vision that includes a number of strategic plans that basically aim at optimizing the value of the company. At the forefront of these plans, the airline seeks to increase its capital from JD84.3 million to JD184.3 million.
Lozi pointed out that the government approved to maintain its 26% ownership in RJ's new capital. The company is studying ways to raise the capital.
Lozi said that the company will continue in 2013 and in the coming years to exert all efforts to attract more passengers, increase revenues, continue to modernize the IT systems and the air and ground services. The airline is preparing to introduce the 11 Boeing 787s, the first batch of which is to join the fleet in the third quarter of 2014. They will play a major role in improving the air services, coinciding with opening of the new Queen Alia International Airport terminal.
Operationally, he said that traffic results of 2012 were positive, although the demand on travel decreased globally. The seat factor went up from 70% in 2011 to 73% last year as the number of travelers increased by 6%, from 3.2 million to 3.4 million, even though the number of flights and flying hours remained unchanged, at 40,000 and 116,000, respectively.
Total earnings amounted to JD802 million in 2012, marking a 9% growth over the JD736 million recorded in the previous year.
RJ was capable to lower its operation expenditure by 1%, bringing it down to JD722.8 million last year from JD728.6 million the year before.
The company achieved a JD79.2 million gross profit last year, 968% higher than the JD7.4 million posted in 2011.
Lozi pointed out that the growth in earnings and the relative decline in costs enabled the company to reverse the JD57.9 million net loss of 2011 into a JD1.1 million net profit in 2012.
Royal Jordanian is proud of the hard work, determination and loyalty of its employees, who were behind the major leap achieved in 2012, which helped it offset the losses incurred in 2011 due to the regional events, high fuel prices and drop in tourism activity. Turning the loss into profit is a good reason to be proud, said Lozi, adding that the cost control program that RJ executed in 2012 never affected the level of service.
He stressed that the net profit of 2012 could have been much better had the fuel prices not exceeded $110 per barrel. The fuel bill RJ paid reached JD290 million, similar to the amount paid in 2011.
The fuel bill in 2012 accounted for about 40% of RJ's overall operational costs, despite the fact that RJ signed several fuel hedging contracts that covered around 31% of the total fuel consumption. It is difficult to control the cost of fuel, which has a direct impact on the net profits.
Commending employees for saving energy, the chairman mentioned that pilots executed an ambitious program that culminated in a JD10.3 million saving. They capitalized on their experience and professionalism in managing flights and adhering to flight plans, besides other technical measures taken at the appropriate time.
RJ President/CEO Amer Hadidi said that the airline is planning a strategy for the coming five years that will enable it to tap into sources of revenues other than those generated by the transport of passengers and air cargo, and these include providing ground-handling services to other carriers operating at Arab airports, besides those at Queen Alia International Airport, as well as offering maintenance services to other airlines after RJ's new hangar is inaugurated. This is expected to increase the RJ share value and the return on shares, maximizing the value of the airline in the coming few years.
Hadidi added that another aspect of the strategy will focus on modernizing the fleet and getting into new regional and international markets where RJ has a strong competitive edge. This will lead to increasing the number of passengers and revenues.
He stressed confidence in the staff and its competence to implement this vision in order to bolster RJ's operational and financial results.
During the meeting, Lozi, Hadidi and Saeed responded to the shareholders' questions about the airline's performance and plans.
They thanked the shareholders for their confidence that made them invest in the Kingdom's national carrier, which has the potential to achieve further success.