Ahmed OMAR

Huthaifah OMAR
AL-Khateeb AL-ZAREE
AL-OMARI AL-EROUD
Company information 2
Description 3
Future Plan 6
Industry Overview 9
Porter Five Forces 10
Stage1 “Rivalry among existing firms” 11
“Threat of new entrants” 20
“Threat of substitute products” 23
“Bargaining power of buyers” 24
“Bargaining power of suppliers” 24
Stage2 “Common size” 25
“Financial Ratio” 32
Stage3 “Forecasting” 36
“The valuation” 39
“Recommendation” 40
References 41

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Company information

Symbol Code Market Number Listed shares

APOT 141043 1 83,317,500

 Telephone: 5200520
 Email: ghadeer.q@arabpotash.com
 P. O. Box: (1470) Amman 11118
 Fax: 5684441
 Creation: 07/ 7 / 1956
 Listing Date: 01/ 1/ 1978
 Main Objective: Among the company's
objectives is the extraction of chemical salts
from the Dead Sea, and various industries. The
activity of the company and its subsidiary
companies is limited to the production of
potash, potassium nitrate, chemical chemicals
and other derivative products, and their sale in
the international and local markets.
 General Manager: Mr. Ma’en AL-Nsour

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 ‫شــركـ ـة ال ـبــوت ـاس الــعــرب ـي ـة‬
COMPANY POTASH ARAB
The Arab POTASH Company:
The Arab Potash Company
was established as a public
joint stock company on July
7, 1956.
The Arab Potash Company is
one of the leading
companies in Jordan that
works to attract the best
practices in various fields
and specializations through
best practices in selection,
appointment and training.
In the last statement of the
Arab Potash Company in its
financial report, it stated its
current capital of
83,318,000 JD, divided into
83,317,500 shares, with a
nominal value of one dinar
per share, one is also fixed.

3|Pag
The Arab Potash Company is located in the
Hashemite Kingdom of Jordan in
Shumaysani, near the union’s complex in
Amman.

The company works in the production

and extraction of salts and chemicals from the
Dead Sea and the establishment of industries
that use those salts. The activity of the company
and its subsidiaries is limited to the production of
potash, potassium nitrate and chemicals, and
other derivative products such as bromine and its
derivatives and selling them in global and local
markets.
The company gives absolute priority to providing
a safe environment within the highest standards
and professional safety regulations through a
series of procedures, policies, training and
awareness programs.
The Potash Company obtained a hundred-year
concession to establish the industries necessary
for the extraction of chemicals in the Dead Sea
and to market them all over the world, with the
investment of Dead Sea salts and chemicals
limited to them alone.

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Is to be the most trusted partner for our clients
globally in the extractive and downstream
industries of Dead Sea minerals.

Creating value for shareholders, customers,

employees and other stakeholders by
transforming Dead Sea Minerals into a diverse
range of high quality, innovative and sustainable
products.

The values are categorized into two main

categories; the first relates to the reputation and
image of the company and adopts the
improvement of the external impression, the
second is related to the company’s performance
system and adopts the improvement of the Arab
Potash Company from within.

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 The Jordanian Mining Sector
is based on the exploitation
of many non-metallic mineral
resources (minerals and
industrial rocks) such as
Phosphates, Potash, Basalt,
Glass Sand and
Limestone…etc., and on
manufacturing industries
based on these mineral
resources such as Fertilizers,
Acids and Cement industries.

The mining sector in the

Hashemite Kingdom of
Jordan is progressing towards
positive development and its
contribution to the GDP is
significant and important, as
Jordan is one of the largest
producers and exporters of
phosphate, potash, bromine,
fertilizers and chemical acids
in the world. And the only
Arab country in the
production of potash.

9|Page
 Treat of
New
entranes
The strategy analysis
provides us with an
Rviealry
understanding of the among Threat of
economy and sector in exsidting
Firms Five
supstitutes

which the company

Forces
operates with its Model
competitors and this is to
know the strengths and
weaknesses of the Bargaining Bargaining
bower of bower of
company’s evaluation in suppliers buyers
accounting policies and
the preparation of financial
crimes. The strategy analysis highlights the profit
factors in the company and the main risk areas. And
the analyst can then use this information to
evaluate the company's current performance and
the possibility of maintaining this performance, and
this depends on the five powers of Porter as he
analyzes five competitive forces that help to identify
strengths and weaknesses, and this model has been
named the five strengths according to a professor
College of Business Mr. Michael Porter's.

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 The market capitalization at extraction and
mining industry between our company and
anther competitors:

Company Market Market Capitalization

Capitalization Ratio
The Potash Company 1,749,678,000 JD 78.5997 %
Jordan Phosphate Mines 289575000 13.0084
Northern Cement Company 158400000 7.1157
Jordan Steel 8050000 0.3616
National Aluminum Industrial 8370000 0.3760
ARAB ALUMINIUM INDUSTRY 9517500 0.4275
National Steel Industry 2471085 0.1110
Total 2,226,061,585 JD 100.0000 %

 So the sector is considered one of the sectors

that are characterized by: concentration.

Industrial
The Potash Company
11 | P a g e ARAB
ALUMINIUM
Jordan Phosphate
INDUSTRY
Mines
National Steel Industry
Northern
Cement
Company
Jordan Steel
  Industry Growth rate
Company 2018 2019 2020 GA GB AVG g %
The Arab Potash 482,727,000 504,608,000 456,169,000 0.045327898 -0.095993326 -2.533271398
Jordan Phosphate Mines 674,439,000 640,793,000 606,611,000 -0.049887388 -0.053343279 -5.161533362
Jordan steel 38,717,873 15,905,510 7,384,080 -0.589194634 -0.535753333 -56.24739835
Arab Aluminum 11,669,699 9,991,919 9,355,306 -0.143772346 -0.063712786 -10.37425661
Industry/ARAL
North Cement Company 39,331,004 48,939,677 37,192,010 0.244302764 -0.24004382 0.212947232
𝑮𝑨𝑷𝑶𝑻= − 2.533%
National Steel Industry
National Aluminum
29,805,209
8,427,620
24,246,890
4,826,354
12,358,841
5,644,740
-0.186488174
-0.427317084
-0.490291703
0.169566095
-33.83899387
-12.88754944
Industry 𝑮𝒇𝟐𝟎𝟐𝟐 =-- 1.556%
The industry Growth Rate -- -- -- -- -17.26143%
𝑮𝒇𝟐𝟎𝟐𝟑=0.5%

12 | P a g e
 Degree of differentiation and switching cost:
The international potash companies competing with the Arab
Potash Company, the most important of them are:
1. Canada Potash Corporation (potash Corp).

2. Russia Potash Company (Uralkail).

3. Belarus Potash Company (Belarusian Potash Company).

Although these companies are strong competitors and are

considered one of the world's largest producers of potash and
other industries, the Arab Potash Company is distinguished from
them by several advantages, namely:
1. The lower wages in Jordan than in other potash-producing countries
helps reduce production costs.

2. Using the natural energy of the sun to evaporate the waters of the
Dead Sea from the salt pans is a great advantage because it allows
obtaining free energy in the most important stages of
industrialization.

3. The proportion of what is expected to be produced by the Arab

Potash Company, which amounts to about 250 thousand tons of
potash annually, is equivalent to only 2% of the total global
production, which facilitates the marketing of the production. This
quantity can be increased in the future to one million tons annually.

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 4. Jordan enjoys an excellent geographical location due to its
proximity to the centers of potash consumption in the Arab, Asian,
African and European countries and other countries that are the
natural market for Arab potash. In addition, the consumption of
potash in these areas is constantly increasing to raise its agricultural
production. The company's annual production of potash is
estimated at more than two and a half million dinars, and thus the
project will be able to achieve an annual profit of no less than 10%
of the capital employed. This percentage will rise in the future after
the start of production of other chemicals.

5. The potash project is considered the first economic project that

Arab countries and peoples cooperate in implementing. It is the first
attempt at Arab economic cooperation. Its implementation is
considered a success in this direction.
6. The Arab Potash Company, by virtue of the concession law, enjoys
customs exemption covering all its imports from abroad. Its profits
are also exempt from income and social services tax for a period of
five years starting from the date of potash production in a good
and comfortable manner, provided that these two taxes are
reduced by 5 percent during the following two years.
7. The implementation of the project limits, to a large extent, Israel's
singularity in exploiting the resources of the Dead Sea.
COMPANY PRODUCT
Arab Potash Potash, rock salt, bromine, magnesium, heavy water & salt
Potash Corp Potash, Nitrogen & Phosphate
Uralkail Mineral and potash fertilizers
Belarusian potash Potash and potassium chloride

What distinguishes us from our competitors is that we

produce:
1. Bromine: that we use in the petrochemical and
chemical industries.
2. Heavy Water: that is used in the nuclear industries.
3. Salt: that is used in food and other industries.

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Potash Corp: A Canadian company founded in
1975, the company has been the world's largest
producer of potash and the third largest producer of
nitrogen and phosphate, three essential crop
nutrients used to produce fertilizer. At the end of
2011, the company controlled twenty percent of the
world's potash production capacity, 2 percent of the
nitrogen production capacity, and five percent of
the phosphate supply.

Uralkail: The Company accounts for a significant

share of global potassium chloride production with
80% of the company's products being exported
overseas. The main buyers are Brazil, India, China,
Southeast Asia, Russia, the US and the EU. With the
combined Uralkali accounting for about 20% of the
world's potash production Uralkali
develops Verkhnekamskoye field of potassium and
magnesium salts, world’s second largest in terms of potash ore
reserves. The company’s total ore reserves total approximately
8.2 billion tons. The company accounts for a significant share of
global potassium chloride production with 80% of the
company's products being exported overseas. The main buyers
are Brazil, India, China, Southeast Asia, Russia, the US and the
EU.

Belarusian Potash Company: A Belarusian company

aimed at meeting the full demand for mineral
fertilizers was established in 2013. It coordinates the
company's global operations with the support of its
four regional offices in Beijing, Kuala Lumpur, New
Delhi and Sao Paulo. BPC supplies mineral fertilizers
to Europe, India, China, Central and South America,
USA, Asia Pacific, Africa and the Middle East.

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 Switching Cost:
When choosing another alternative company,
customers will incur switching costs such as shipping
the goods and the time of arrival, and also the
customers will have to pay the costs of canceling the
contract and paying the amount of a new contract
with the other alternative company.

 Excess Capcity:
The capacity of the volume is done in the Arab Potash
Company. If the price is reduced, this will lead to an
increase in the demand for the materials produced by
the Arab Potash Company, and vice versa. If the
demand for the produced materials is low, this is
caused by raising the price, so the appropriate solution
for the company when the demand for the materials
produced by company is (Cut their price)
- Global production of potash:
Production capacity during 2020 The Russian
company Eurochem has increased its production
capacity of potash by nearly one million tons,
bringing its production to 2.3 million tons. And the
Chinese company, Shanghai Salt Lake, increased its
production by 1.51 million tons, knowing that this
increase did not affect the total volume of domestic
production of potash in China because it coincided
with the suspension of many small potash
manufacturing companies. As for North America, it

16 | P a g e
was estimated that potash production would
increase in 2020 by about 22.5 million tons,
compared to 22 million tons in 2019. Although IC
closed the Spanish “Villaferonce” mine later in 2020
(whose capacity is estimated to Production with a
number 500 a thousand tons of Botas due to the
expensive operational tights, so the impact of the
improvements that the company started with its
implementation in 2019 began in its facilities in the
dead sea in the year 2020, which led to the increase
in the company of the age of 2020, which led to the
increase in the company of the age of 2020. 5.4)
million tons compared to (2.4) million tons in 2020. On
the other hand, the miners of the Belarusian
Company in Belarus carried out a strike that lasted
for several days. The company’s production activity
increased by about (200) thousand tons during the
year, compared to 2019. It is worth noting that BHP
Billiton postponed the decision to “Jansen” Potash
production or its postponement, until mid-2021, and it
is known that BHP Billiton intends to establish .A
potash production project in Canada with a
production capacity of about (8) million tons
annually, which is equivalent to 12% of the world's
potash production rate. Global production of potash

25
20
15
2020
1
5
2018
0

17 | P a g e
2018 2019 2020
- Management of storage, handling and packaging of
potash: The Arab Potash Company has embarked on
implementing a project for managing, storing and
handling potash, in line with its plans to develop
operations, improve product quality and increase
storage capacity, in order to meet the requirements
and regional growth requirements. This project was
launched within (8) packages of construction, which
started at the end of 2019, and the project included
the following units:
1. Establishment of a red potash warehouse with a
total area of (3,150, 000) square meters of product,
with a storage area of 10.000 square meters.
Potash is one of the red potash with special
specifications, which is produced in the company's
factories with the highest quality standards,
followed by the establishment and construction of
a system for handling and transporting the red
granular product automatically.
2. Establishing and providing a new storage space for
the various products of the Arab Potash Company,
with a storage area of (45) dunums and a storage
capacity of (450,000) tons.
3. Establishment of the main storage warehouse,
which constitutes the largest part of the project,
which consists of a warehouse with an area of
12,000 square meters and a capacity of (40,000)
tons of various types of potash.

18 | P a g e
4. Equipping four container loading lines designed
according to the latest international specifications
to load the company's products.
5. Preparing a mixing unit with a capacity of (150) tons
/ hour in line with the requirements of international
markets.
6. Implementation of a truck loading unit with a
capacity of (250) tons / hour.
7.Establishment and supply of a bagging unit with
two systems, one of them of medium size, ranging
from (18 - 50) kg, with a production capacity of (50)
Tons/hour, and the other is large (500 - 1.000).
8. Establishment of a warehouse to store coated
bags with an area of (6000) square meters and a
storage capacity of (8000) tons.
9. Establish a handling unit for all the company's
products from the factories to the existing and new
storage warehouses that will be established in the
project.
10. Establishing a screening unit for potash products
in Aqaba before shipment in order to raise the
quality of the product and raise the export
efficiency from (1000) tons / hour to (2000) tons /
hour.

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 It is one of the forces that shape the competitive
landscape of an industry and that helps determine the
attractiveness of an industry.
The entry of new arrivals will be difficult for several
reasons, including: At the local level, there are 7
companies, led by the Potash and Phosphate
Company, and they are considered the two most
important companies in the sector because they have
a very large capital. This threat will be very little for the
Potash Company. On the external level, it is very
difficult for the company, because there are 10 strong
international companies in the same field, and the sixth
Arab Potash Company is in this arrangement, so there
will be a threat if the newcomer is from abroad,
especially from a wealthy country such as North Korea
and Iran.

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 Legal barriers:
The rights and privileges granted to the Arab Potash
Company and its products under the concession
agreement concluded with the international
government of the Kingdom of Jordan and its
amendments and ratified under the Franchise
Ratification Law No. (16) for the year 1958 are as
follows:
1. Preventing the Arab Potash Company from
importing licenses for all devices, tools, means of
transportation, machinery and building materials that it
needs for the entire project, expansion or completion of
the project, continuation of work and transferring the
project, and granting the Arab Potash Company
exemptions from import duties, customs duties and all
additional fees and other fees that are collected on
imported goods Above, provided that they are used
for the company’s purposes. If the company sells duty-
free goods, these goods are subject to duties
according to the customs law.
2. Exempting the company's products from issuing
export licenses and from all fees on exported goods.
3. The exclusivity of the company's right throughout the
concession period and the exercise of mining rights
without the government, any person, body or company
having to exercise those rights.
4. The company's priority right to extract salts and
minerals in the Dead Sea or the concession area, other
than the above exclusive rights.

21 | P a g e
 5. The company’s right to obtain all necessary of pure
water in the Jordan River, Al-Mujib, Ma’in and
Suwayma for use in the extraction process of reform,
minerals, drinking, washing, health affairs and all that is
necessary for the project, and the right to dig wells in
the Al-Metiar area to obtain pure water, and the right
to benefit from the water Springs outside the
concession area without registered special rights and
have the right to request expropriation at the expense
of the company.
6. The right to establish stone quarries for the project
from the princely lands exempted from fees and
licenses There are no patents in the name of the Arab
Potash Company registered with any official authority
in the Hashemite Kingdom of Jordan or additional
obtained by the company.

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 Potash uses:
 Potash has been used since ancient times by the Romans to
wash clothes. This was due to the alkaline properties of
potash; Whereas, when potash reacts with water, it forms
an alkaline medium, which is able to remove stains due to
its dissolution of fats. As the alkaline nature of potash, it
encourages its use in soap making, and in disinfection
operations.
 Potash is used in making food, as it is considered as a
food additive.
 Potash is widely used in the agricultural sector; Where it
is used in the fertilizer industry.
 Potash helps in the process of mixing materials that
are immiscible in nature, such as water and oil.
 Potash is used as an acidity regulator; As it maintains
a certain pH value in products that need it.
 Potash is used in the medical field; As it has been added to
medications for eczema and some other skin diseases; So
as to enhance the effect several times.
 Potash is used in the manufacture of glass and margarine.
There are many alternatives to the potash company such as:
Humberstone and Santa Laura Stifalbee Food
Saltpeter Works Company
Sodium extraction for soap and glass Food additives
industry

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 Customers who make up 10% or more of the
company's total sales:

Number Buyers Dealing percentage of

name total sales
1 SINOCHEM FERTILIZER COMPANY
LIMITED/China 23.6%

2 Indian Potash Limited (IPL)/India 11.7%

Major Suppliers Total Company Purchases: (Required for thos

the company’s total purchases):

Number Suppliers Name Dealing Percentage of

total purchases
1 NBL EASTERN MEDITERRANAN 10%
MARKETING LIMITED

2 BAUER International FZE 10%

3 HIDROCONSTRUCTIA S.A 5%

2244||PPaaggee
A common-size financial statement is displays line
items as a percentage of one selected or
common figure, creating common-size financial
statements makes it easier to analyze a
company over time and compare it with its
peers.
Using common size financial statements helps
investor's spot trends that a raw financial
statement may not uncover. The common figure
for a common-size balance sheet analysis is total
assets. Based on the accounting equation, this
also equals total liabilities and shareholders’
equity, making either term interchangeable in
the analysis. It is also possible to use total liabilities
to indicate where a company’s obligations lie
and whether it is being conservative or risky in
managing its debts.

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Assets(JD) 2018 2019 2020
Cash on Hand & at Banks 245,958,000 240,135,000 150,908,000
Account Receivables, Net 66,778,000 102,747,000 64,064,000
Notes Receivable 0 0 0
Post Dated Cheque 0 0 0
Short Term Investments 0 0 0
Inventory 21,949,000 30,078,000 33,089,000
Spare Parts 43,723,000 44,746,000 43,668,000
Total Current Assets 434,688,000 459,334,000 382,915,000

Long Term Investments 195,498,000 192,812,000 222,169,000

Fixed Asset ,Net 240,256,000 211,858,000 251,852,000
Lands 3,011,000 3,011,000 3,011,000
Projects in Progress 25,166,000 105,467,000 141,967,000
Total Fixed Assets 268,433,000 320,336,000 396,830,000
Other Assets 111,986,000 116,091,000 117,125,000
Total Assets 1,010,605,000 1,088,573,000 1,119,039,000

Liabilities(JD) 2018 2019 2020

Accounts and Notes Payable 21,961,000 12,625,000 9,957,000
Credit Banks 3,688,000 10,499,000 3,582,000
Short Term Loans 0 0 0
Accrued Part of Long Term Loans 3,798,000 5,845,000 6,343,000
Total Current Liabilities 83,219,000 118,903,000 112,518,000
Long Term Loans & Notes Payable 15,861,000 11,690,000 6,343,000
Corporate Bonds 0 0 0
Other Liabilities 66,431,000 66,279,000 67,401,000
Total Liabilities 165,511,000 196,872,000 186,262,000

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Shareholders’ Equity (JD) 2018 2019 2020
Authorized Capital 83,318,000 83,318,000 83,318,000
Subscribed Capital 83,318,000 83,318,000 83,318,000
Paid-in Capital 83,318,000 83,318,000 83,318,000
Compulsory Reserves 50,464,000 50,464,000 50,464,000
Voluntary Reserve 80,699,000 80,699,000 80,699,000
Other Reserves -8,190,000 -13,314,000 -15,834,000
Issuance Premium 0 0 0
Issuance Discount 0 0 0
Treasury Stocks 0 0 0
Cash Dividends 99,981,600 83,318,000 83,318,000
Stock Dividends 0 0 0
Accumulated Change in -89,000 -72,000 -48,000
Fair Value
Retained Earnings 538,910,400 607,288,000 650,860,000
Total Shareholders 845,094,000 891,701,000 932,777,000
Equity
Non-controlling Interest 0 0 0
Total Liabilities & 1,010,605,000 1,088,573,000 1,119,039,000
Shareholder’s Equity

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Income Statement (JD) 2018 2019 2020
Operating Revenues 482,727,000 504,608,000 456,169,000
Operating Expenses 316,030,000 278,429,000 273,035,000
Gross Profit 166,697,000 226,179,000 183,134,000
General and Administrative Expenses 14,959,000 19,080,000 16,310,000
Selling and Distribution Expenses 20,501,000 19,637,000 19,833,000
Depreciation (period) 67,937,000 50,099,000 45,404,000
Other Operating Expenses 15,390,000 25,660,000 14,722,000
Net Operating Income 115,847,000 161,802,000 132,269,000

Other Revenues 48,098,000 66,753,000 63,860,000

Other Expenses 9,815,000 11,319,000 30,240,000
Income Before Interest & Tax 154,130,000 217,236,000 165,889,000
Interest Expenses 10,838,000 8,499,000 5,822,000
Net Income before Tax 143,292,000 208,737,000 160,067,000
Income Tax (Period) 18,418,000 57,042,000 33,177,000
Income Tax ( Previous Years) 0 0 0
Universities and Research Train Fees 0 0 0
Board of Directors Remuneration 0 0 0
Net Income 124,874,000 151,695,000 126,890,000
Non-controlling Interest 0 0 0
Net Income Pertains to Shareholder’s 124,874,000 151,695,000 126,890,000

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Assets(JD) 2018 2019 2020
Cash on Hand & at Banks 24.34% 22.06% 13.49%
Account Receivables, Net 6.61% 9.44% 5.72%
Notes Receivable 0.00% 0.00% 0.00%
Post Dated Cheques 0.00% 0.00% 0.00%
Short Term Investments 0.00% 0.00% 0.00%
Inventory 2.17% 2.76% 2.96%
Spare Parts 4.33% 4.11% 3.90%
Total Current Assets 43.01% 42.20% 34.22%
Long Term Investments 19.34% 17.71% 19.85%
Fixed Assets Net 23.77% 19.46% 22.51%
Lands 0.30% 0.28% 0.27%
Projects in Progress 2.49% 9.69% 12.69%
Total Fixed Assets 26.56% 29.43% 35.46%
Other Assets 11.08% 10.66% 10.47%
Total Assets 100.00% 100.00% 100.00%

Liabilities(JD) 2018 2019 2020

Accounts and Notes Payable 2.17% 1.16% 0.89%

Credit Banks 0.36% 0.96% 0.32%

Short Term Loans 0.00% 0.00% 0.00%

Accrued Part of Long Term Loans 0.38% 0.54% 0.57%

Total Current Liabilities 8.23% 10.92% 10.05%

Long Term Loans & Notes Payable 1.57% 1.07% 0.57%
Corporate Bonds 0.00% 0.00% 0.00%

Other Liabilities 6.57% 6.09% 6.02%

Total Liabilities 16.38% 18.09% 16.64%

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Shareholder’s Equity (JD) 2018 2019 2020
Authorized Capital 8.24% 7.65% 7.45%
Subscribed Capital 8.24% 7.65% 7.45%
Paid-in Capital 8.24% 7.65% 7.45%
Compulsory Reserves 4.99% 4.64% 4.51%
Voluntary Reserve 7.99% 7.41% 7.21%
Other Reserves -0.81% -1.22% -1.41%
Issuance Premium 0.00% 0.00% 0.00%
Issuance Discount 0.00% 0.00% 0.00%
Treasury Stocks 0.00% 0.00% 0.00%
Cash Dividends 9.89% 7.65% 7.45%
Stock Dividends 0.00% 0.00% 0.00%
Accumulated Change in Fair Value -0.01% -0.01% 0.00%
Retained Earnings 53.33% 55.79% 58.16%
Total Shareholder’s Equity 83.62% 81.91% 83.36%
Non-controlling Interest 0.00% 0.00% 0.00%
Total Liabilities & Shareholder’s 100.00% 100.00% 100.00%
Equity

30 | P a g e
Income Statement (JD) 2018 2019 2020
Operating Revenues 100.00% 100.00% 100.00%
Operating Expenses 65.47% 55.18% 59.85%
Gross Profit 34.53% 44.82% 40.15%
General and Administrative 3.10% 3.78% 3.58%
Expenses
Selling and Distribution 4.25% 3.89% 4.35%
Expenses
Depreciation (period) 14.07% 9.93% 9.95%
Other Operating Expenses 3.19% 5.09% 3.23%
Net Operating Income 24.00% 32.06% 29.00%
Other Revenues 9.96% 13.23% 14.00%
Other Expenses 2.03% 2.24% 6.63%
Income Before Interest & Tax 31.93% 43.05% 36.37%
Interest Expenses 2.25% 1.68% 1.28%
Net Income before Tax 29.68% 41.37% 35.09%
Income Tax (Period) 3.82% 11.30% 7.27%
Income Tax ( Previous Years) 0.00% 0.00% 0.00%
Universities and Research 0.00% 0.00% 0.00%
Train Fees
Board of Directors 0.00% 0.00% 0.00%
Remuneration
Net Income 25.87% 30.06% 27.82%
Non-controlling Interest 0.00% 0.00% 0.00%
Net Income Pertains to 25.87% 30.06% 27.82%
Shareholders

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Ratio 2018 2019 2020 Comment
CR 5.223 3.863 3.403 The CR decreased by 1.357 between
2018 and 2019, and also decreased
by 0.46 between 2019 and 2020
QR 4.960 3.610 3.109 The QR decreased by 1.35 between
2018 and 2019 and also decreased by
0.501 between 2019 and 2020
DA 0.16 0.18 0.17 The DA increased by 0.02 in 2018 and
2019 and decreased by 0.01 in 2019
and 2020
DE 0.20 0.22 0.20 The DE increased by 0.02 between
2018 and 2019 and decreased by
0.01 between 2019 and 2020
ROE 0.15 0.17 0.14 The ROA increased by 0.02 between
2018 and 2019 and decreased by
0.03 between 2019 and 2020
ROA 0.124 0.139 0.113 The ROA in 2018 0.124, increased in
2019 to 0.139 and decreased in 2020
to 0.113.
EM 1.20 1.22 1.20 EM: the ratio increased between 2018
and 2019 to 0.02, and the ratio
decreased between 2019 and 2020 to
0.02.
ROS 0.26 0.30 0.28 NPM the ratio decreased between
2018 and 2019 to 0.4 and also
(NPM) decreased between 2019 and 2020 to
0.2
ATO 0.48 0.46 0.41 ATO the ratio increased between
2018 and 2019 0.2 and decreased
between 2019 and 2020 to 0.5
CASH 2.96 2.02 1.34 Cash The ratio decreased between
2018 and 2019 by 0.94, while in the
period between 2019 and 2020, it
decreased by 0.68.

Financial ratio explanations for year 2020:

1) Current Ratio:
Each 1JD of short term liabilities, covered by 3.403
short term assets.

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2) Quick Ratio:
This indicates that the company current assets
are enough to finance its short term obligations
3.109 times without relying on inventory.
3) Debt to Assets:
The means the company finance 0.17 of its assets
with debt, meaning that 0.83 of its assets are
financed through equity.
4) Debt to Equity:
That means that 0.20 of a firms growth is financed
by debt while other 0.80 of that growth is
financed by equity.
5) Return on Equity:
For each 1 JD of shareholder’s equity, company
has generated 0.14 in net income.
6) Return on Assets:
For each 1 JD of total assets, company has
generated 0.113 in net income.
7) Equity Multiplier:
Implies that 1.20 of assets have been financed by
equity.

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8) Net Profit Margin (ROS):
This ratio indicates that each 1JD of sales
generates profit 0.28.
9) Assets turnover:
For each 1D of total assets, company has
generated 0.41 in sales.
10) CASH
That means the company have each and cash
equivalent enough to cover 1.34 times of short
term financial obligation.

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35 | P a g e
 Balance Sheet 2020 (A3) 2021 (F1) 2022 (F2) 2023 (F3)
Assets(JD)
Cash on Hand & at Banks 150,908,000 147,090,028 149,378,748 150,125,642
Account Receivables, 64,064,000 62,443,181 63,414,797 63,731,871
Net
Notes Receivable 0 0 0 0
Post Dated Cheques 0 0 0 0
Short Term Investments 0 0 0 0
Inventory 33,089,000 32,251,848 32,753,687 32,917,455
Spare Parts 43,668,000 43,668,000 43,668,000 43,668,000
Total Current Assets 382,915,000 373,227,251 379,034,667 380,929,840
Long Term Investments 222,169,000 222,169,000 222,169,000 222,169,000
Fixed Assets Net 251,852,000 245,480,144 249,299,815 250,546,315
Lands 3,011,000 2,934,822 2,980,488 2,995,390
Projects in Progress 141,967,000 138,375,235 140,528,354 141,230,995
Total Fixed Assets 396,830,000 386,790,201 392,808,657 394,772,700
Other Assets 117,125,000 114,161,738 115,938,094 116,517,785

Total Assets 1,119,039,000 1,090,727,313 1,107,699,030 1,113,237,525

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 2020 (A3) 2021(F1) 2022(F2) 2023(F3)
Liabilities(JD)
Accounts and Notes 9,957,000 9,705,088 9,856,099 9,905,380
Payable
Credit Banks 3,582,000 3,582,000 3,582,000 3,582,000
Short Term Loans 0 0 0 0
Accrued Part of Long 6,343,000 6,182,522 6,278,722 6,310,116
Term Loans
Total Current Liabilities 112,518,000 109,671,295 111,377,780 111,934,669
Long Term Loans & Notes 6,343,000 6,343,000 6,343,000 6,343,000
Payable
Corporate Bonds 0 0 0 0
Other Liabilities 67,401,000 65,695,755 66,717,981 67,051,571
Total Liabilities 186,262,000 181,549,571 184,374,483 185,296,355

Shareholder’s
Equity (JD)
Authorized Capital 83,318,000 83,318,000 83,318,000 83,318,000
Subscribed Capital 83,318,000 83,318,000 83,318,000 83,318,000
Paid-in Capital 83,318,000 83,318,000 83,318,000 83,318,000
Compulsory Reserves 50,464,000 49,187,261 49,952,615 50,202,378
Voluntary Reserve 80,699,000 80,699,000 80,699,000 80,699,000
Other Reserves -15,834,000 -15,834,000 -15,834,000 -15,834,000
Issuance Premium 0 0 0 0
Issuance Discount 0 0 0 0
Treasury Stocks 0 0 0 0
Cash Dividends 83,318,000 83,318,000 83,318,000 83,318,000
Stock Dividends 0 0 0 0
Accumulated Change in -48,000 -48,000 -48,000 -48,000
Fair Value
Retained Earnings 650,860,000 691,104,916 733,344,286 776,234,518
Total Shareholders Equity 932,777,000 909,177,742 923,324,548 927,941,170
Non-controlling Interest 0 0 1 2
Total Liabilities & 1,119,039,000 1,090,727,313 1,107,699,030 1,113,237,525
Shareholders Equity

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 Income Statement 2020 (A3) 2021 2022 (F2) 2023 (F3)
(F1)
Operating Revenues 456,169,000 444,627,924 451,546,335 453,804,066
Operating Expenses 273,035,000 266,127,215 270,268,154 271,619,495
Gross Profit 183,134,000 178,500,710 181,278,181 182,184,572
General and Administrative 16,310,000 15,897,357 16,144,720 16,225,443
Expenses
Selling and Distribution 19,833,000 19,331,225 19,632,019 19,730,179
Expenses
Depreciation (period) 45,404,000 44,255,279 44,943,891 45,168,610
Other Operating Expenses 14,722,000 14,349,533 14,572,812 14,645,676
Net Operating Income 132,269,000 128,922,594 130,928,630 131,583,273
Other Revenues 63,860,000 62,244,342 63,212,864 63,528,928
Other Expenses 30,240,000 29,474,928 29,933,558 30,083,226
Income Before Interest & 165,889,000 161,692,008 164,207,936 165,028,976
Tax
Interest Expenses 5,822,000 5,822,000 5,822,000 5,822,000
Net Income before Tax 160,067,000 155,870,008 158,385,936 159,206,976
Income Tax (Period) 33,177,000 32,307,092 32,828,567 32,998,743
Income Tax (Previous 0 0 0 0
Years)
Universities and Research 0 0 0 0
Train Fees
Board of Directors 0 0 0 0
Remuneration
Net Income 126,890,000 123,562,916 125,557,369 126,208,232
Non-controlling Interest 0 0 0 0
to Shareholder’s 26,890,000 123,562,916 125,557,369 126,208,232

38 | P a g e
 2021 2022 2023
Growth Rate -2.53% 1.56% 0.50%
Forecasting 0.9747 1.01556 1.005
Tax (%) 21% 21% 21%
Retained Earnings 40,244,916 42,239,369 42,890,232
AFN 0 0 0

K = Rf + B (Rm – Rf) --- #Rb= Rm-Rf

K = 5.1% + 1.4 (7.2%)
K = 15.18%
𝐶𝑎𝑠ℎ 𝐷𝑖𝑣
DPS = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒
83,318,000
DPS = 83,317,500
DPS = 1.000006
𝐷𝑃𝑆
PRICE =
𝐾
1.000006
PRICE= = 6.5880
15.18%

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Price of firm stock “Intrinsic value” =6.6JD
Price of market stock "Market value" =21JD

Because the market price is greater

than the company's price, it will be the
choice:

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- Annual report of the Arab Potash
Company
https://www.ase.com.jo/ar/zip/discl
osure/100001524

- Official company link

https://careers.arabpotash.com/ar/

- Company Logo
‫شــركـــة الــبــوتــاس الــعــربــيــة‬
ARAB POTASH COMPANY

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 ‫د‪ .‬غيث النادر‬

‫‪42 | P a g e‬‬