PALTEL’s 7th General Assembly Approves Distribution of 12% of Profits to Shareholders

Speakers at PALTEL’s General Assembly

RAMALLAH — In its seventh annual meeting, PALTEL’s General Assembly discussed on Sunday (09.05.2004), in Ramallah and Gaza, administrative reports and financial statements for the year ending 31.12.2003. The meeting was chaired by Mr. Abdel Malek Jaber, vice-chairman of the board. It was also attended by the board members, senior management, company controller, financial auditors, a number of shareholders and interested individuals.

The meeting was held via video conferencing connecting two sessions, one held in Ramallah’s Grand Park Hotel, and the other held in Gaza’s Rashad el-Shawa Hall. PALTEL uses this technology to enable interested individuals to attend its meetings, whether they are in the West Bank or Gaza.

During the meeting, Mr. Abdel Malek Jaber, PALTEL’s vice-chairman of the board, presented PALTEL’s accomplishments. He also spoke of improvements in performance service provision in 2003. PALTEL reported a 50% increase (JD 11.5 million) in profits in 2003.

Company Controller Mr. Omar Al-Horoub confirmed that a quorum was present at the meeting with 61.4% of shareholders in attendance, and then proceeded to open the floor. Mr. Abdel Malek Jaber delivered a speech on behalf of Mr. Sabih Al Masri, PALTEL’s chairman. Mr. Jaber praised PALTEL’s success for “achieving positive results - despite all obstacles during the previous year (2003). These obstacles resulted in enormous damages to infrastructure and affected profits.”

Mr. Jaber continued, “PALTEL has decided to distribute 12% of the share nominal value to its shareholders. This step represents a large increase compared to the previous year, where only 7% was distributed for 2001 and 2002.” He added that this distribution “is due to the strong financial performance of the company: growth of operational revenues and net profits (50% - JD 11.5 million) exceeding all those attained since the company’s establishment. Further, the net shareholders’ profit is JD 11.5 million and the share capital of the company is JD 67.5 million. This fact reflects the strong financial footing of PALTEL. It is worth mentioning that the book value of PALTEL’s stock is JD 1.726, and its market value equals 1.8 times its book value. Compared to the stock value of other telecommunication companies’ in the region (around JD 3), PALTEL’s stock appears to be stronger as its fair value exceeds JD 5.”

The 7th General Assembly meeting ratified the administrative and financial reports of 2003. It also approved PALTEL’s balance sheet and financial statements for 2003. Shareholders discharged the board and management for the financial year ending 31.12.2004 and approved the appointment of Ernst & Young as auditors for the coming financial year, 2005.

“The real asset of PALTEL is Palestinian subscribers’ satisfaction with its performance, and their loyalty to the only Palestinian telecommunications company, connecting 97% of localities with telephone service, including the rural areas,” said Mr. Zahi Khouri, chairman of the board of the Palestine Cellular Telecommunications Company (Jawwal). “PALTEL services currently cover 512 communities, with 265,000 telephone lines.” This is “the most important achievement of our young company since its establishment seven years ago,” Khouri added.

PALTEL’s shareholders expressed their satisfaction after the reading of the financial report. One of them said, “PALTEL is the only Palestinian company to maintain this level of success, despite the severe economic conditions.”

Mr. Farouq Zuaiter, PALTEL executive board member and CEO of Palestinian Development and Investment Company (PADICO), which is the largest shareholder company in PALTEL, stated his satisfaction with PALTEL’s profits for 2003 and the percentage of profits distributed to shareholders.

PALTEL accomplished these profits by enhancing its performance level,” Mr. Zuaiter remarked. “That will reinforce PALTEL’s financial situation in the Palestinian stock market and will assist in financing future expansion projects.”

Mousab Khorma, PALTEL CEO, stated, “as a national Palestinian company, PALTEL assumes corporate social responsibility for assisting Palestinian society. The recent campaigns to cut prices and adopt a theme of creativity and excellence in education are only minor segments of PALTEL’s commitment towards the local society. PALTEL is always seeking the satisfaction of costumers and shareholders by providing the best services and by garnering more profits.”

Mr. Khorma expressed his satisfaction with last year’s achievements. “We are satisfied with what we accomplished in the previous year, despite all challenges and difficulties.” Khorma touched on a few of the most significant achievements in 2003. “PALTEL has adopted the theme of creativity and excellence in education. This project aims at exploring and sponsoring talented children. In addition, PALTEL offered 200 scholarships to students in Palestinian universities. PALTEL also led a campaign during Ramadan to support Palestinian farmers that had sustained damages due to the Israeli apartheid wall by purchasing a quantity of their olive oil that was then distributed to poor families in cooperation with the Agriculture Relief and Zakat [Islamic Charity] Committees in several localities.”

The Annual Report was distributed among shareholders and attendees. It details the most important achievements of 2003. Among these were introduction of e-services and ISDN in Palestine. These services provide technology for videoconferences, leased digital circuits services, cellular communications (Jawwal) and other services. The report allocates one page to describing future projects, mainly Subscription Free Internet (SFI), which will allow customers to connect to the Internet via telephone lines without being required to subscribe through an Internet Service Provider (ISP). The report contains information about the Recorded Voice Message System project, Costumer Care and Pre-paid Calling service.

PALTEL began operations on January 1, 1997 as operator and provider of all telecommunications services, in addition to installation and operation of telecommunications stations and fixed and mobile phone networks, Internet, data and information exchange services and leased digital circuits. PALTEL is the first and only company providing communications services and operating in the territories of the Palestinian National Authority.

PALTEL was established on 1995 as a public shareholding company with a share capital of JD 45 million. The capital was increased through a decision from the General Assembly in 1999, to JD 67.5 million. The total number of PALTEL shareholders reached 4,991 by the year ending on 31.12.2003. The list of shareholders includes a group of Palestinian individuals, companies, associations and investment entities.