Summary of economic news released on Monday, March 26
Gross Profit of Construction Company IS Kosice up 80 Pct. in 2006
One of large Slovak construction companies, Kosice-based Inzinierske Stavby (IS) Kosice reported a gross profit of SKK 269.2 million last year. The company financial director Stefan Tarasek said that it is a y/y increase of 80.6 percent. Total revenues were SKK 8.712 billion, up 1.1 percent y/y. Total costs posted a drop of 0.3 percent to SKK 8.443 billion. In 2006 unfavorable weather conditions had the biggest impact on the company's performance in 2006, said Mr. Tarasek
SE, a.s. Wants to Modernize a Detection System for NPP Mochovce
Slovakia's dominant power producer Slovenske Elektrarne, a.s. (SE) plans the modernization of a detection system in the nuclear power plant in Mochovce. SE is seeking a company that would modernize the Akoboje detection system. The contract should be completed by the end of May 2008. SE said they want to switch to a new detection system working on the basis of digital microwave detectors.
Minimum Investment in Real Estate Fund be Canceled from May
Real estate funds should become more accessible also for smaller investors this year. From May, the current requirement of minimum investment of EUR 3,000 (about SKK 100,000) into a real estate fund should be canceled. "All limits for investors are canceled in order to enable investing assets in special real estate mutual funds," explains the Finance Ministry in the draft amendment, approved by the Slovak Parliament on Friday. The Slovak legislation enables launching real estate funds in the country since last May.
Sect Producer Hubert J.E. Reports SKK 507 Mln. Sales in 2006
The biggest traditional producer of sparkling wine in Slovakia Hubert J.E., s.r.o., Sered, reported total sales of SKK 507 million in 2006. This is a decrease of 2.4 percent when compared with the previous year. In 2006 the company sold a total of 7.3 million 0.75-liter bottles. Of this its production accounted for 82 percent. Exports made up about three percent of total sales with the biggest portion of them heading to the Czech Republic, the sect producer announced on Monday.
Vetropack Nemsova Reported Sales of SKK 1.529 Bln. in 2006
The biggest Slovak packaging glass producer Vetropack Nemsova, s.r.o. reported total sales of SKK 1.529 billion in 2006, up 8.8 percent y/y. Vetropack Nemsova sold 400.1 million glass products, up 3.1 percent y/y. The company exported 39.2 percent of products sold, accounting for 156.8 million pieces. At the end of last year the Slovak company employed 369 people, reads the company's annual report.
Railway Firm ZSR Plans Capital Investments of SKK 10 Bln. this Year
According to the 2007 business plan, railway network operator Zeleznice Slovenskej Republiky (ZSR) wants to invest SKK 10.104 billion this year. Of this, SKK 7.604 billion is to be covered by external resources and SKK 2.5 billion from its own cash flow, ZSR representatives informed SITA. The company wants to finance the biggest portion, amounting to SKK 4.594 billion or 45.5 percent of this year's planned investment volume, from European Union (EU) funds. In particular, funding from the Cohesion Fund should account for SKK 2.991 billion, SKK 1.403 billion should be covered by the European Regional Development Fund (ERDF) and SKK 199.5 million within the TEN-T trans-European transport network project.
Slovak Banking Sector Employed 20,699 People at the End of Last Year
The Slovak banking sector employed 20,699 people at the end of last December, a decrease of 1.5 percent from the end of 2005. The drop can chiefly be attributed to commercial banks, since their labor force fell by 325 people to 19,525 at the end of last year. The National Bank of Slovakia (NBS) reported only a moderate decrease of five people y/y to 1,174 in late December 2006, according to data published by the NBS.
HDO SK Employees Held a Warning Strike for Higher Wages
Workers at the HDO SK, s.r.o. engineering company in Myjava, which makes cast metal products, entered into a one-hour strike on Monday morning. They were demanding higher wages. Pavol Ondris from Metalworkers Union KOVO reported that around 150 employees from the morning shift gathered in front of the factory. The company has 240 people on its payroll.
Money Market in Expectation of NBS Bank Board Decision
The Slovak money market reported minimum trading activity on Monday; UniBanka dealer Jozef Hempfinger explained that the market is waiting for Tuesday's decision of the National Bank of Slovakia (NBS) Bank Board in the setting of key interest rates. The market currently leans toward the opinion that the central bank will decide to cut interest rates due to the strong crown.
Association Chairman Expects Continued Construction Growth
Slovak Construction Entrepreneurs Association (ZSPS) chairman Jan Majersky expects that favorable developments in the domestic construction sector will continue this year. His assumption is based on the high growth of construction output and company sales in the first month of this year. "The outlook of construction sector development is very good, as confirmed by statistical results for January, when construction industry output went up 24.1 percent y/y". Construction companies have contracts for the following ten months. Higher investment is expected mainly in transportation infrastructure and in non-housing construction projects. Mr. Majersky thinks that industrial construction projects resulting from big investments in the automotive industry are of great importance to construction companies.
FOREX MARKET: Crown Weakens by About Five Hallers on Monday
The Slovak crown lost about five hallers at the beginning of the week. Tatra Banka's Boris Somorovsky said that market players behaved anxiously before the meeting of the National Bank of Slovakia's (NBS) Bank Board and the two-week repo tender on Tuesday. Their anxiety caused that the exchange rate of local currency slipped against the euro from its opening 33.56/33.60 SKK/EUR to a closing 33.62/33.66 SKK/EUR. "The market expects the central bank to decrease Slovakia's key interest rates and to turn down a part of bank bids in the repo tender," Mr. Somorovsky commented. This could cause the crown to weaken up to 33.85 SKK/EUR.
STOCK MARKET: SAX Index Weakens 2.19 Pct at Beginning of the Week
The Bratislava Stock Exchange (BCPB) registered losses at the beginning of the week. Two traded VUB shares pulled down the official SAX share index by 0.53 percent or 2.19 points to 412.04 points. Turnover on the Bratislava Stock Exchange (BCPB) increased from SKK 76.82 million on Friday to SKK 307.028 million on Monday with SKK 1.077 million in share trading.
Slovakia's General Government Deficit in 2006 was 3.6 Pct. of GDP
Slovakia's general government deficit in 2006 reached SKK 59 billion, according to the Finance Ministry's preliminary figures calculated in line with ESA 95 methodology. This accounts for 3.6 percent of Slovakia's GDP including the influences ensuing from the implementation of capitalization pillar of the retirement pension-scheme. In comparison with the approved budget, performance of the general government was thus by 0.6 percentage points better. The introduction of capitalization pension pillar contributed SKK 18.2 billion to the general government deficit, representing 1.1 percent of GDP. The deficit of the general government budget excluding the influences of the pension reform was 2.5 percent of GDP.