Summary of economic news released by SITA on June 7
Construction Output Up 11.1 Percent y/y to SKK 10.4 Bln. in April
In April of this year the output of Slovak construction companies rose 11.1 percent y/y to SKK 10.4 billion. The April development resulted from higher output growth in new construction, modernization and reconstruction reporting an increase of 19.2 percent. For the first time this year output in maintenance and repair works dropped by 2.4 percent. The trend of considerable decreasing of construction output abroad continued over April. It shrank by 42.3 percent, the Slovak Statistics Office informed SITA.
Petrol Prices Down by SKK 0.42 as of June 1
As of June 1 the average retail price of 91- and 95-octane petrol in Slovakia was SKK 41.01 per liter and thus compared with May 19 it shrank by SKK 0.42. The Slovak Statistics Office reported that the price for the 98-octane petrol decreased by SKK 0.43 to SKK 43.62 per liter compared to May 19. The average retail price of one liter of diesel dropped SKK 0.62 to SKK 40.47. The average retail price of LPG fell by SKK 0.08 to SKK 22.23 as of June 1, spokeswoman of the Slovak Statistics Bureau Eva Kelemenova informed.
Car Sale Sector with Biggest Employment Growth in April
In April employment grew at the highest pace in the motor vehicle sale and maintenance sector that reported a y/y increase of 11.4 percent. According to the Slovak Statistics Office report the number of employees in the construction industry went up 10.4 percent, in hotels and restaurants by 8.3 percent. The increase accounted for 7.7 percent in the retail sector and 3.9 percent in the sector of real estate, rental, and other public services. On the other hand, employment continued decreasing in industry going down 2.4 percent y/y. Telecommunications services reported a 0.3 percent decrease in labor force. Postal services posted a drop of 0.5 percent and employment in the transport sector went down 0.6 percent y/y, for the first time this year.
Real Wages in March Grew Most in the Retail Sector
Average real wages in Slovakia posted a year-on-year growth in most monitored branches in the fourth month of this year according to preliminary figures of the Statistics Office. Compared to April 2005, average real wages in the retail sector were 6.7 percent higher. Average real wages grew 3.5 percent in the car sale and maintenance sector, 2 percent in real estate, rental, trade activities and other services and 1.6 percent in transport. They went up also in industry by 1.5 percent while the wholesale sector reported a growth by 1.3 percent. Real wages were also higher in April in postal services, increasing by 1 percent and in the construction sector, going up 0.7 percent. On the other hand real wages were lower in telecommunications with a 3 percent drop and in hotels and restaurants going down 1.2 percent.
CSOB Poistovna Insurer with Q1 Profit of SKK 6.15 Mln.
CSOB Poistovna insurance company closed the first three months of this year with a taxed profit at SKK 6.15 million. Marketing director Radovan Kohut explained that the insurer achieved the positive result instead of the expected loss due to the central bank's decision to increase key interest rates by 0.5 percentage points in the monitored period. For the insurer this enabled the dissolution of a portion of its life insurance reserves. Another important factor contributing to the positive result was that CSOB Poistovna managed to keep the decisive part of its portfolio of clients of mandatory car liability insurance gained during the autumn 2004 special promotion campaign. The insurer closed the first quarter of 2005 SKK 60.7 million in the red.
Wholesale Sector's Growth of Sales in Slows Down in April
Long-term significant growth of sales in Slovakia's wholesale sector slowed down in April. The wholesale sector sales grew 3.1 percent y/y in April in current prices to SKK 59.5 billion. The most significant sales growth was registered in household goods, going up by 12.7 percent and in machinery by 11.6 percent. Wholesale sales in non-farm semi-finished products rose by 11 percent and food, beverages and tobacco by 7.9 percent. Total growth was hampered by a drop in sales in primary farm products by 16.5 percent, wholesale mediation by 4.5 percent and other wholesale by 2.2 percent. Four-month sales of the wholesale sector increased by 10.5 percent y/y, the Slovak Statistics Office informed SITA on Wednesday.
Growth of Sales in Industry in Slovakia Decelerated in April
Industry sales growth in Slovakia decelerated in April. Sales in fixed prices went up by 4.1 percent y/y to SKK 138 billion. This development was largely influenced by a 4.9-percent increase in industrial manufacturing sales, while sales in the mining sector declined 9 percent and the drop in sales for electricity, natural gas and water production and distribution was 1.2 percent. Four-month sales in industry were 9.6 percent higher than a year ago. Of this, industrial manufacturing sales rose 11.9 percent y/y and sales in the mining industry grew 3.5 percent. Sales for electricity, natural gas and water production and distribution decreased 3.9 percent y/y, the Slovak Statistics Office informed SITA on Wednesday.
Annual Report of ZSR Railway Company on Cabinet's Agenda
At its Wednesday meeting the cabinet approved an annual report for 2005 on the performance of railway network operator Zeleznice Slovenskej Republiky (ZSR), as well as the firm's plans for the following years. According to the report ZSR reported sales of its own products and services at SKK 10.068 billion last year, of which it cashed in SKK 6.941 billion for use of the railway network. ZSR drew a non-investment transfer from the state budget of SKK 3.6 billion. On total revenues of SKK 19.278 billion and total costs of SKK 19.56 billion, ZSR thus closed last year SKK 282.4 million in the red.
Flood Damages to be Covered from Land Fund Profit from 2005
The Slovak Land Fund (SPF) closed 2005 with an accounting profit of almost SKK 362.1 million. Based on an agreement between the Finance and Agriculture Ministries, SKK 150 million from this sum will be used to cover damages caused by floods and waterlogged farmland this spring. The remaining SKK 212.1 million will be transferred to the reserve fund. This information comes from the fund's annual report and a proposal for profit distribution approved by the Slovak cabinet on Wednesday.
Slovnaft Group Invested SKK 4 Bln. Last Year
Oil refiner group Slovnaft made total capital investments last year amounting to SKK 4 billion. The biggest portion at more than SKK 2 billion poured into projects in the refinery segment. Investments in projects improving the refinery's profitability exceeded SKK 300 million. The aim of this investment was to improve Slovnaft's production efficiency. Projects securing the smooth operation of production units swallowed up over SKK 760 million. Retail investment activities were concentrated on Slovakia where four new filling stations boosted the refiner's network. The refiner continued liquidating ineffective and ecologically unfit filling stations. Slovnaft closed 31 such filling stations last year. It also invested in information systems to unify the network. Slovnaft invested in projects regarding health, security and environmental protection.
Simonstein & Henriks Confirms SKK 16 Bln. Investment in Slovakia
American financial group Simonstein & Henriks Corporation represented by consulting firm Akerman Advisory Association officially confirmed it plans to invest EUR 438 million in an industrial park in the eastern Slovak village of Spissky Hrhov in eastern Slovakia. Governmental trade and investment development agency SARIO spokesman Michal Novota said the group plans a green-field investment on a 100-hectare area. A robotized plant should manufacture products for the automotive industry and other branches. The US investment should directly create over 1,000 jobs. It is expected to considerably curb unemployment in a region with a jobless rate at over 15 percent.
State Aid Provided in Slovakia Last Year Totaled SKK 10 Bln.
The total volume of state aid granted in the Slovak Republic reached SKK 10.272 billion last year. In comparison with the previous year this translates into an increase by 12.03 percent, while the volume of state aid has been on the increase since 2002. The Finance Ministry writes in its report, approved by the cabinet on Wednesday, that SKK 5.333 billion or 51.92 percent of total sources provided was granted to sector aid. Moreover, SKK 3.894 billion was allocated for regional aid, SKK 740.48 million was allocated for horizontal aid and SKK 304.5 million to agriculture.
Johnson Controls to Get SKK 485.4 Mln. in Investment Stimuli
At its Wednesday meeting the cabinet decided to grant SKK 485.4 million in state aid to Johnson Controls Lucenec, s.r.o. founded by US firm Johnson Controls Holding Company Inc. From the total volume of the approved investment stimuli almost SKK 392.4 million will be provided in the form of tax relief for the company and the remaining SKK 93 million will be direct state aid. From the total direct state aid, a contribution to newly created jobs will account for SKK 68.2 million, while the remaining portion of SKK 24.8 million will be provided for training of employees.
MONEY MARKET: Liquidity Surplus Persists
A large volume of funds left the interbank market after the settlement of regular two-week repo tenders in the National Bank of Slovakia (NBS) on Wednesday, but the liquidity surplus still lasts. Slovenska Sporitelna dealer Pavel Janosik stated that SKK 288.28 billion from repo deals on Tuesday left the market on Wednesday. On the other hand maturing SKK 252.095 billion returned to the market. Commercial banks deposited in their reserve accounts in the central bank SKK 26.211 billion meeting the minimum requirement for June on a cumulative basis at 168.02 percent. Additional SKK 1.63 billion ended in overnight sterilization in the central bank.
Antitrust Office Approves Budamar's Concentration with SPaP
The Antitrust Office of the Slovak Republic (PMU) agrees with the concentration of companies Budamar Transport Limited from Great Britain and shipping company Slovenska Plavba a Pristavy, a.s. (SPaP). The British company will gain indirect control over the Slovak shipping firm through this concentration, since it increased its approximately 24-percent stake in SPaP to 69 percent through the Cyprus based companies Ganeshia Trading Limited and Melush Enterprises Limited. The Antitrust Office approved the concentration, since neither Budamar nor other companies of which this business is in charge, have been operating on the same relevant markets as SPaP. This concentration doesn't create or strengthen a dominant position of Budamar and shipping company SPaP, which could result in serious obstacles to effective competition, said PMU spokesman Miroslav Jurkovic. The Antitrust Office's decision became effective on June 5, 2006.
STOCK MARKET: SAX Slips Slightly on VUB Shares
The official SAX share index value slightly dropped midweek due to weakening shares of VUB bank. The SAX index lost 0.11 percent or 0.43 points to 383.92 points. Turnover on the Bratislava Stock Exchange (BCPB) dived from SKK 15.783 billion on Tuesday to SKK 2.466 billion on Wednesday with less than SKK 2.7 million in share trading.
FOREX MARKET: Crown Fluctuates in a Narrow Band on Wednesday
The FOREX market registered calm trading midweek, while the exchange rate of the Slovak crown against its referential currency the euro moved in a narrow band from 37.710 SKK/EUR to 37.760 SKK/EUR during the day. UniBanka dealer Patrik Malec stated that the market lacked impulses. Although the Czech crown slightly strengthened, it didn't influence surrounding markets.