First general assembly of Royal Jordanian after privatization

Attending were Vice Chairman and RJ President/CEO Samer Majali, the board members, a representative of the companies’ general comptroller and a number of shareholders owning 70 % of the company capital, which amounts to 84.3 million shares/JDs.

The general assembly approved the Board of Directors' financial report for 2007, its future plans and the financial statements. It also discharged the previous Board of Directors and chose Ernest and Young Company as RJ's accounts auditor for 2008.

The general assembly elected the new Board of Directors, consisting of the Jordanian government represented by Nasser Lozi, Samer Majali and Abdel Rahman Khatib, of the Social Security Corporation represented by Sharif Faris Sharaf, of Mikati Group (MINT) represented by Maher Najeeb Mikati and Mohammed Ali Isam Bdeir, in addition to Sharif Zubi, Amr Bilbeisi and Al-Amal Financial Investments Company represented by Samer Muasher.

Nasser Lozi was elected chairman of the board in its first meeting held directly after the general assembly meeting.

At the general assembly meeting, Lozi expressed satisfaction with the positive results the company achieved in 2007, with the remarkable growth in net profits, the financial revenues, the shareholders' equity, the company assets and with the operational indicators like number of passengers, seat factor, flying hours, flight frequencies and others.

He pointed out that the consolidated financial statements for 2007 showed net profits of JD24 million before taxes, triple the profits registered in 2006, despite the steep rise in global fuel prices, which RJ buys at international rates. The return on equity (ROE) was JD0.24 against JD0.085 in 2006, and the net profits after taxes amounted to JD20.4 million, compared to JD6.1m in 2006.

Lozi added that because of the rise in the number of passengers the operational revenues increased from JD447m in 2006 to JD543m last year, marking a 21.5% increase, and the gross profit amounted to JD33m in 2007 against JD13m in 2006.

Lozi said that the shareholders' equity rose from JD88.7m to JD109.1m, a 23% rise. The total assets of the company increased from JD267m in 2006 to JD327m in 2007, an increase of 22.4% due to the introduction of two Embraer 195 aircraft on capital lease out of four aircraft RJ contracted to purchase.

He said that going in parallel with the positive results registered in 2007, the airline also managed to achieve two historic accomplishments this same year.

RJ was the first and only Arab airline to join any of the three global airline alliances, oneworld, alongside nine giant international airlines. Its joining the oneworld airline alliance, on April 1, 2007, has broadened its network of 55 directly served destinations to 700 served by the alliance airlines. Its membership in the alliance also secured many other privileges for its passengers.

The other landmark was the successful completion of the airline's privatization program. This could be considered the most successful privatization process in Jordan, both in terms of performance efficiency and of the results achieved in the interest of all parties: the government, the shareholders and the staff members. The process was completed by floating 71% of the capital through a local and international IPO. There was great demand from Jordanians; the number of investors in RJ reached 29,000. The IPO coverage amounted to 140% of the offered shares and JD164.5m of total proceeds went to the country's Treasury.

Lozi said that Jordanians own 68% of the company shares; the government retains 29% of the company shares, the Social Security Corporation owns 10%, and 7.7% were granted to the RJ employees. The remaining shares are owned by Jordanian retail and institutional investors, whereas 32% of the shares belong to Arab and foreign investors.

He stressed that the airline employees exert all efforts to strengthen its competitiveness and enhance its position in the global markets, and to continue playing a leading role in the Middle East, by investing in its potentials.

He also pointed out that the company will continue implementing its strategic plans for 2008, reviewing its route network, modernizing its fleet and IT systems and improving its air and ground services. Investing in qualified human capital is capable of generating more achievements and growth, he said.

Royal Jordanian will not give up its social responsibility and its pioneering role in serving the community and supporting the needy, said Lozi.

The plan for 2008 includes building a new head office in Amman, on a modern and comprehensive basis to accommodate all activities and offices, and to create a better workplace for the employees. When finished in 2010, it will be a distinguished architectural feature of the capital. The plan also involves setting up a hanger for RJ aircraft maintenance at Queen Alia International Airport.

At the meeting, Nasser Lozi and Samer Majali answered the shareholders' questions regarding the company results and future aspirations.