JOCM - Jordan ( September Financials)

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1 Jordan Cement Factories (Lafarge) PLC Mining and Extraction Industries JOCM.AM : ASE - Jordan Company Equity Report - (As of December 22, 204) مجموعة الاهلي للا سواق المالية والا ستثمارات Research & Studies Department Researchdept@ahlibank.com.jo Corporate Finance Department Corporatefinance@ahlibank.com.jo Market Cap.: JOD 02.8 Million Free Float: 7.6% Turnover Ratio : 8.95 Year High: JOD.57 Year Low: JOD 0.89 Closing Price: JD.7 JOCM - Jordan ( September Financials) Company Fair Value: JOD.9 52 Weeks Performace & Stock Details Undervalued by: 2% JOCM Sales and Profits The company s sales have drastically dropped over the past 5 year period as they have reached JD9.5 million by the end of opposed to sales of JD284.8 million recorded by end of year. Such decline resulted in a loss of JD27.6 million recorded by the end of. In the same context, JOCM did not record any profits since end of year, whereby the company s declining sales have resulted in losses of JD953 thousand, JD20.5 million, JD2. million and JD27.6 million during years 200, 20, and respectively. What seems to have also contributed to the recorded losses is the high managerial expenses of Jordan Cement Factories that ranged between JD8 million and JD4 million over the past 5 years. Most recent figures show that JOCM managed to increase its sales over the course of the first 9 months of year 204 reaching JD86.7 million compared to JD67.6 million recorded during the same period of. This was mirrored in achieving a modest JD54.7 thousand net income during the first 3 quarters of the current year. JOCM Liquidity Ratios With relevance to the company s liquidity ratios, JOCM s current ratio reached 0.7x during Q3 of 204 relative to 0.66x recorded by the end of. The company s quick ratio stood at 0.35x during the first 9 months of the current year in comparison to 0.3x recorded by the end of. Moreover, JOCM s cash ratio stood at 0.05x by the end of Q3 of 204 similar to that recorded by the end of. It is safe to say that the company needs to enhance its liquidity ratios especially with regards to its current ratio whereby the company needs to manage its assets and liabilities in a more efficient manner. JOCM Profitability Ratios and Efficiency JOCM s total assets stood at around JD87 million by the end of September 204 decreasing by 0.42% compared to their levels at the end of, which was mainly due to a decline of 3.6% in the company s fixed assets as well as a 7.7% decrease in its current assets. Furthermore, the company s Total Asset Turnover is considered to be relatively low as it stood at almost 46% by the end of Q Additionally, the company s Return on Assets is considered to be very weak as it stood at 0.03% while its Return on Equity is also considered to be very low as well standing at 0.% by the end of September 204. Share Details Closing Market Price 52-Weeks High 52-Weeks Low Range (High - Low) - JOD Outstanding Shares (Million) Market Cap. - JOD Million ,444,460 05,777,805 Ownership Structure - (As of Report Date) Board of Directors Member Seat Financiere Lafarge Sas 3 Social Security Corporation Mr. Omar Mohammad Bdair Rama Investments and Savings Co. Arab Concrete Supply Co. Top Shareholders (% of Capital) Shareholder Name Financiere Lafarge Sas Social Security Corporation Mr. Mayloud Shoaiby ,444,460 60,444,460 82,808,90 80,995,576 Nationality Shares France 50.3% Jordanian 2.8% Jordanian 0.09% Jordanian 0.07% Jordanian 0.003% % of Capital 50.3% 2.8% 0.3%

2 Company Profile Lafarge Cement Jordan is one of the largest and oldest industrial companies in Jordan, founded in 95 as a public shareholding company, with concession granted by the Jordanian government at that time. The company has two plants in Fuhais and Rashadiyeh, and an export terminal in Aqaba, which was established in 992. Production Capacity of the company is (4.8) million tons. In 998. Jordan government sold 33% of its share to Lafarge Group, that presently owns (50.2%) of the company. Lafarge Group was founded in 833, and is now the world leader in building materials; active in 64 countries, with,570 industrial sites and 65,00 employees worldwide. JOCM Subsidiaries - Sudan Company CT S- SUDAN: The subsidiary (CTS Company -SUDAN) is managed by CEMENTIA which in turn manages Eritrea & Sudan terminals, Lafarge Cement Jordan is no longer controlling the Financial and operational strategies for this company. 2-Arab Concrete Supply Company: Is a limited liability company established with a capital of JD,95,000 which main activity is to produce ready mix. Valuation Model Models Market Multiples Relative Valuation - JOD Fair Value.9 2

3 Balance Sheet Q3 204 Current Assets Total Assets T. Assets 6,470, ,459,54-65,33, ,383, % 59,87,264 23,962, % 53,992,83 98,493,28-7.2% 52,422,737 87,9,09-5.3% 56,473,989 87,24, % Total Assets reached JD87 million by end of Q3 204 Current Liabilities Total Liabilities T. Liabilities 79,436,00 99,893,406-65,73,62 83,203,62-6.7% 60,897,428 77,676, % 64,394,647 82,092, % 79,738,00 03,044, % 8,52,989 02,939,4-0.% Total Liabilities reached JD03 million by end of Q3 204 Total Owners Equity 96,565,748 56,70, % 36,286, % 6,400,57-4.6% 84,866, % 84,90, % Total Owners Equity reached JD84.2 million by end of Q3 204 Income Statement Q3 204 Sales Revenue Cost of Sales Cost of Sales - to - Sales 284,774,974 93,936,752 68% 69,685,0 39,207,095 82% 34,483,593 23,326,703 92% 06,700,873 0,265,209 03% 9,489,56 02,065,547 % 86,724,632 73,648,655 85% Revenues Declined by over 65% over the past 5 years Gross Profit Gross Profit Margin (%) 90,838,222 32% 30,477,96 8%,56,890 8% -3,564,336-3% -0,576,39-2% 3,075,977 5% Average Gross Profit Margin stood at 8.6% Net Profit Net Profit Margin 45,708,434 6% -953,304 -% -20,504,575-5% -2,09,508-20% -27,603,390-30% 54, % Average Net Profit Margin stood at -9.5% Cash Flow Statment Q3 204 CF From Operations - CFO CF From Investing - CFI 75,739,273 (7,80,54) ),946,290( ),820,260(,926,2 (3,535,60) )23,82,436( (,0,20) )38,46( )96,472( 5,544,77 (230,772) CF From Financing - CFF )40,892,90( )40,920,905( ),384,43( )3,07,330(,38,906 )9,36,98( 3

4 DuPont Analysis. DuPont Analysis Q3 204 NPM 6.% -0.6% -5.2% -9.8% -30.2% 0.% x T. A. Turnover 96% 7% 63% 54% 49% 46% = ROA 5.42% -0.40% -9.58% -0.63% -4.69% 0.03% x E. Multiplier = ROE 23.3% -0.6% -5.0% -8.% -32.5% 0.% Return on Owners Equity reached 0.% by the end of Q3 204 compared to -32.5% recorded by the end of. Return on Assets reached 0.03% by the end of Q3 204 compared to -4.7% recorded by the end of. Net Profit Margin reached 0.% by the end of Q3 204 compared to -30.2% recorded by the end of. Total Assets Turnover reached 46% by the end of Q3 204 compared to 49% recorded by the end of. JOCM Key Figures and Ratios - Summary Revenues 284,774,974 69,685,0-40% 34,483, % 06,700, % 9,489,56-4.3% EBIT EBIT Margin (%) 57,80,27 20.% 45, % 0.3% -6,855,56 -,68% -5.% -22,390, % -2.0% -27,546,66 23% -30.% Net Income Net Income Margin (%) 45,708,434 6% -953,304-02% %- -20,504, % -5% -2,09,508-3% -20% -27,603,390-3% -30% Current Ratio (x) Quick Ratio (x) Cash Ratio (x)

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