Summary of economic news revealed on Tuesday, August 22
Istrochem Plans Sales of SKK 2.54 Bln. in 2006
Chemical company Istrochem, a branch of Duslo, a.s. Sala, plans to reach total sales at SKK 2.54 billion this year. The company should generate an added value of SKK 544.4 million this year, reads an annual report of Istrochem for 2005. Labor productivity should reach SKK 965,000. The chemical company plans to close this year with a pretax profit of SKK 62.4 million, while investments should represent SKK 134.8 million.
Seven-Month Tax and Customs Revenues at SKK 139.02 Bln.
Tax and customs offices in the Slovak Republic collected SKK 139.02 billion in the first seven months of 2006. Of this tax revenues made up SKK 135.466 billion and non-tax revenues the remaining SKK 3.554 billion. The collection thus represented 62.5 percent of the annual budget for tax and customs offices. Local tax collection on goods and services of SKK 101.587 billion dominated tax revenues in seven months of this year, constituting 59.1 percent of the annual target set by the Finance Ministry. Value added tax (VAT) collection amounted to SKK 72.831 billion and excise tax collection reached SKK 28.756 billion, Central Tax Directorate spokesman Robert Merva informed SITA on Tuesday.
VUCHT Reports H1 Loss of SKK 3 Mln.
Rubber industry chemicals research company VUCHT, a.s. Bratislava closed the first six months SKK 3 million in the red. The company reported an operating loss of SKK 2.5 million. The loss from financial operations amounted to over SKK 500,000. Company's revenues reached SKK 52.5 million and expenditures achieved SKK 55.5 million.
Novaky Thermal Power Plant Can Use Slovak Brown Coal until 2030
Brown coal should be extracted in Slovakia to supply Novaky (ENO) thermal power plant until 2030. Representatives of the Association of Mining Unions and Guilds and representatives of coal mining company Hornonitrianske Bane a.s. informed Economy Minister Lubomir Jahnatek of this development on Monday. The Economy Ministry told SITA news agency that they discussed issues of coal extraction and energy use in the Horna Nitra region. The minister also met mineworkers' trade union chairman Miroslav Gazdik and vice-chairman Lubomir Novak.
Majetkovy Holding Posts H1 Profit of SKK 30.8 Mln.
The company Majetkovy Holding, a.s. Bratislava reported revenues from the sale of stocks, bonds and deposits of SKK 106 million in the first six months of this year. The firm posted sold stocks, bonds and deposits at a value of SKK 105.9 million. These figures increased by one third y/y or two fifths. Majetkovy Holding posted revenues from financial investments at SKK 16.1 million and interests received at SKK 13.7 million. The company closed the first six months with a profit of SKK 30.8 million. The profit from financial operations at SKK 38.1 million was reduced by an operating loss at SKK 7.3 million.
New Industrial Orders in Slovakia Grew 25.1 Percent y/y in June
New industrial orders rose 25.1 percent in Slovakia in June 2006 compared with the same period of the previous year. Eurostat, the Statistical Office of the European Communities announced this was the second strongest growth within the EU. Poland reported the highest growth in industrial orders at 27.4 percent. On a monthly basis industrial orders in Slovakia went up by only 0.8 percent. Within the 25-member EU, new industrial orders rose by 6.4 percent, however they dropped by 1.2 percent in comparison with May. In the 12-member EU zone industrial orders went up by 5.2 percent y/y and decreased by 2.5 percent on a monthly basis. Apart from Poland and Slovakia, also Lithuania reported a 21.8 percent y/y growth in industrial orders and Estonia had 21.5 percent growth.
Dunaj Obchodne Domy with Lower SKK 6 Mln. Profit over H1 2006
Trading company Dunaj, Obchodne Domy a.s. Bratislava continued its high profitability trend from previous years in the first half of this year when it reported a profit of almost SKK 6 million. This is a y/y drop by SKK 1.1 million, however, it managed to achieve this result with only operating revenues of SKK 25.2 million. Operating costs climbed to almost SKK 19 million during the first half of 2006. Operating profit thus amounted to SKK 6.2 million but was reduced by losses from financial operations at SKK 253,000.
Central Bank Reports H1 SKK 1.4 Bln. Gap
The National Bank of Slovakia (NBS) reported a loss of SKK 1.4 billion at the end of June. Central bank spokesperson Igor Barat said losses from monetary policies' performance due to the sterilization of surplus liquidity in the banking sector at SKK 6.9 billion and profit from FOREX reserves administration at SKK 6.2 billion most influenced the central bank's H1 result. NBS revenues achieved SKK 14.2 billion in the first half of this year on SKK 15.6 billion costs.
PMU Approves Concentration of French Veolia and PVS Subsidiary
The Slovak Antitrust Office (PMU) has approved the concentration of French concern Veolia and regional water utility Podtatranska Vodarenska Prevadzkova Spolocnost, a.s. The authority concluded that the concentration does not create or boost a dominant position that could result in serious obstacles to effective competition on the relevant markets of operating the public water pipeline and sewage network. The decision came into force on August 4.
Businesspersons Can Again Apply to EU Structural Funds
Slovak businesspersons can again ask for money from European Union structural funds. The Economy Ministry and the National Agency for the Development of Small and Medium-Sized Entrepreneurs (NARMSP) publicized a second invitation last week to submit projects within the Sector Operational Program Industry and Services. This measure will support the development of new and already existing companies and services within the so-called "de minimis" aid scheme. NARMSP director general Bystrik Berthoty said that at least SKK 215 million was earmarked for this measure while this sum could be even moderately higher, drawn from a reserve that serves to cover the foreign exchange difference.
Polnosluzby Bebrava Reports SKK 19.4 Mln. H1 Profit
Farm services company and producer of fodder mixtures Polnosluzby Bebrava a.s., resided in Rybany, generated a profit of almost SKK 19.4 million during the first half of 2006. Compared with the previous year's period this means an improvement by almost SKK 15 million, when it earned less than SKK 5 million. Results revealed by the company further read that sales of goods rose 14.1 percent over the year to SKK 211.4 million. The company reported sales of its own products and services of SKK 148.6 million, a year-on-year increase by over 5.8 percent. Added value generated by the company jumped by over 50 percent to SKK 43.1 million. At the end of June total assets amounted to SKK 385.5 million.
Bost SK H1 Sales Up to SKK 77.4 Mln.
Engineering company Bost SK a.s. Trencin reported sales of SKK 77.4 million over the first half of this year, translating into a more than 20-percent increase y/y when the company showed almost SKK 64 million in sales in H1 2005. In the second half of this year Bost SK expects sales to grow as a new production hall opened at the beginning of August will gradually start full operation. The company's H1 operating profit increased by 74 percent to almost SKK 4 million over the first six months of this year. The company plans to invest SKK 20 million in development in 2006.
Savers' Assets in Pension Funds Approach SKK 20 Bln. on August 18
Six Slovak pension fund management companies administered savers' assets with a net value exceeding SKK 19.9 billion as of August 18. The value of assets thus grew by SKK 604.3 million last week. Assets in growth funds stood at nearly SKK 13.08 billion and in balanced funds at SKK 6.05 billion. Savings in conservative funds reached SKK 824.4 million at the end of last week. The current value of a pension unit in growth funds was between SKK 1.0462 to SKK 1.0605; in balanced funds the pension unit ranged from SKK 1.0450 to SKK 1.0598, while in conservative funds it stood at between SKK 1.0418 to SKK 1.0497.
Coop Jednota Levice Reports 1.9-Pct. Rise in 2005 Sales
Coop Jednota Levice closed last year with sales of goods at SKK 429.1 million, up 1.9 percent y/y. Cost of sales increased by 2.1 percent to SKK 358.4 million compared to 2004. The company thus reported a gross trade margin only SKK 700,000 higher in comparison with the previous year, i.e. SKK 70.7 million. Coop Jednota Levice closed last year's operation with a profit of SKK 58,000, while in 2004 it was SKK 100,000, reads data released in the Commercial Bulletin on the www.epi.sk portal.
MONEY MARKET: Banks almost Rolled over Full Volume of Maturing Repo
Bank bids in the regular sterilization repo tender of the National Bank of Slovakia (NBS) on Tuesday totaled SKK 165.698 billion. Slovenska Sporitelna dealer Pavel Janosik stated that the central bank accepted them all at a single yield of 4.5 percent p.a. Banks thus almost rolled over the equal volume, since a maturing SKK 165.401 billion will return to the market on Wednesday after two weeks. Therefore the liquidity surplus will even persist on the interbank market after the settlement of repo tenders.
Health and Finance Ministries Debate State Budget
Health Minister Ivan Valentovic views relations between the ministries of health and finance as standard. "The state budget is being prepared and this preparation will take some time. We are holding negotiations with the Finance Ministry every day and no conflict exists there," said Mr. Valentovic. "Our arguments are relevant and we expect relevant reactions too," stressed the health minister. The Health Ministry has prepared a draft revision to the health insurance law, which increases premiums the state pays for its policyholders. It increases monthly preliminary premiums from the originally planned SKK 691 per capita to SKK 864. It wants to achieve this by increasing the premium rate from 4 percent to 5 percent of the average monthly wage in the country's economy. Thus the state should spend SKK 31.354 billion on its policyholders in 2007 while this would only be SKK 25.085 billion under the current legislation.
STOCK MARKET: SAX Index Improves 0.6 Pct. to 401.66 Points
The official SAX share index again climbed over the 400-point limit on Tuesday when shares of Slovak crude oil refiner Slovnaft and power engineering company SES Tlmace helped the SAX index strengthen 0.6 percent or 2.41 points to 401.66 points. Turnover on the Bratislava Stock Exchange (BCPB) slightly dropped from SKK 455.408 million on Monday to SKK 414.341 million on Tuesday with SKK 5.987 million in share trading.
INVESTING: Further SKK 368.7 Mln. Withdrawn from Bond Funds Last Week
Investors further continue to withdraw money from bond funds, which reported an SKK 368.7 million fund outflow last week. The biggest amount of money was directed to equity funds, representing net sales of SKK 115.2 million and SKK 38 million went to master funds. Money market funds registered net sales of SKK 12.2 million and SKK 7.7 million was directed to mixed funds. Open-end mutual funds managed by members of the Slovak Asset Management Companies Association (SASS) again reported an outflow of money last week, amounting to SKK 188.8 million.
FOREX MARKET: Crown Attracts Little Interest on Tuesday
FOREX market trading on Tuesday was very calm and balanced. Tatra Banka dealer Boris Somorovsky further stated that the local currency opened at 37.680/37.720 SKK/EUR and the exchange rate of the Slovak crown against its referential currency the euro stood at 37.640/37.680 SKK/EUR before the close of trading. "Generally the Slovak crown attracted little interest on Tuesday," commented the dealer. Market players await a certain impulse, either from surrounding markets in the region or from the local political scene, thinks the dealer. The US dollar was traded against the euro at 1.2805/1.2810 USD/EUR. The Slovak crown was thus quoted at 29.400/29.440 SKK/USD. The cross exchange rate of the Slovak and Czech crowns was 1.3365/1.3388 SKK/CZK.
Construction Law Revision a Priority for Businesses
Amending the Construction Law together with a new Expropriation Law should be a priority in cooperation between the Construction Ministry and the Slovak Construction Business Association (ZSPS) said association president Jan Majersky. ZSPS representatives met with Construction Minister Marian Janusek on Tuesday. Mr. Majersky further said that the outcome of the meeting reads that the Construction Law draft should be submitted to parliament in 2007. The ZSPS has imminent interest in active participation in elaborating the draft stated its chairman.