Economic news released by SITA on Thursday, November 9
September Employment Growth Was Highest in Wholesale Businesses
In September, employment grew most in the wholesale business, where y/y increase of 13.1 percent was reported. According to the Slovak Statistics Office report the number of employees in the building industry went up 8.6 percent, in hotels and restaurants 8.4 percent and in retail sector 6.2 percent. The increase accounted for 5.2 percent in the motor vehicle sale and maintenance sector and 4.1 percent in the sector of real estate, rent and other public services. The number of employees in postal services remained unchanged. The telecommunications sector reported a decline of 2.7 percent, in transport it was 0.9 percent down and 0.8 percent drop was registered in industry.
Slovakia's Industrial-Sales-Growth Continued throughout September
The growth of Slovakia's industrial sales continued in September, increasing 15.5 percent y/y in fixed prices to SKK 164.7 billion. This development resulted from a 16.4-percent growth in industrial manufacturing sales propelled by an 55.7-percent increase in the production of chemicals and chemical products, a 39.2 percent increase in manufacturing electrical and optical appliances and a 34.7 percent growth in the production of motor vehicles. Sales of electricity, natural gas, and water production and distribution went up 8.7 percent. In contrast, sales in the mining sector fell 20 percent, the Slovak Statistics Office informed on Tuesday.
FinMin Reshuffles Whole Management of Tipos Lottery Company
The Finance Ministry as the exclusive owner of Slovakia's largest lottery company Tipos, a.s., has reshuffled the whole board of directors and the supervisory board as well. Ministry's spokesman Miroslav Smal informed that Peter Kapusta will replace the recalled director general and head of the board of directors Stanislav Ziacik. The new chairman of the supervisory board is Roman Ozvold who comes instead of Peter Malik. The ministry said that the change of government is always accompanied by replacements of certain people. The new people on Tipos senior bodies have certain practice and the minister fully trusts them, explained Mr. Smal.
Retail Sales in Slovakia Posted Robust Growth also in September
Retail sales in Slovakia continued significantly growing in September. According to the Statistics Office, retail sales rose 10.6 percent y/y in fixed prices to SKK 36.5 billion. Compared with August the retail-sale growth accelerated 2.6 percentage points. The growth chiefly resulted from a 16.8-percent increase in other retail sales and non-specialized outlets where sales of food products do not dominate. Also retail sales of pharmaceutical products and cosmetics reported a high growth of 15.1 percent. Retail sales in specialized and non-specialized outlets selling food products rose 12.6 percent and other specialized retail sales increased 11.8 percent, However retail sales outside outlets dropped 5.2 percent. Since the beginning of the year retail sales increased 8.8 percent from the same period of last year.
Panasonic AVC Networks Slovakia with 2005 Sales of SKK 6.181 Bln.
Electronics company Panasonic AVC Networks Slovakia, s.r.o., resided in Krompachy increased its sales by 43.7 percent to nearly SKK 6.181 billion last year. Production costs grew by nearly 42.9 percent y/y to SKK 5.699 billion. The firm generated added value of SKK 479.6 million, which is up SKK 209 million from a year ago.
Vranov is Getting Ready for an Investment by Knudsen Plast
Danish company Knudsen Plast that will make plastics products for the medical sector in the eastern Slovak town of Vranov nad Toplou should employ hire people in the first phase of the project. Within two years it should give job to 200 people. The investor will operate in premises of the former textile company Slovenka. Vranov based company Uniplast MH, s.r.o. bought a part of these premises and then rented 3,500 square meters to Knudsen Plast. Uniplast MH manager Jan Hrubovsky said they will invest SKK 6 million to reconstruct the premises to accommodate Knudsen Plast's requirements.
Healthcare Supervision Office Clears a Merger of Two Health Insurers
The Healthcare Supervision Office (UDZS) issued its consent on October 24 to a merger of health insurance companies Sideria, a.s. and Dovera, a.s. The decision will come into force on November 12, informed UDZS spokesperson Radoslava Miklasova. The health insurance companies should merge within ninety days from the date the decision comes into force.
UniBanka and HVB Bank Operate Under the Name UniCredit Bank
After the integration process of UniBanka and HVB Banka Slovakia finishes, a new bank with the name UniCredit Bank in 2007 will be presented on the Slovak banking market. "The new name will emphasize the interconnection between the new bank and UniCredit," said the future UniCredit Bank director general Jozef Barta. The merger will create the fourth largest bank in Slovakia with total assets of SKK 127 billion, 93 branch offices and 172,000 clients.
Antitrust Office Council Confirms a Verdict on Cartel Agreement
The Antitrust Office (PMU) Council confirmed the first instance verdict obliging six construction companies to pay a fine totaling SKK 1.349 billion for the price cartel in the tender for construction of the D1 highway section between Mengusovce and Janovce. The verdict took effect on Monday, November 6. "Similarly as the first-instance body, the PMU Council came to the conclusion that construction companies Skanska DS, a.s., Inzinierske Stavby, a.s., Strabag, a.s., Doprastav, a.s., Betamont, s.r.o. and Mota Engil coordinated in advance their actions in the tender," said PMU spokesperson Alexandra Bernathova. She added that high fine should discourage businessmen from similar anti-competitive practices.
Slovanet Will Limit Purchase of Services from Slovak Telekom
Alternative telecommunications operator Slovanet wants to wind down its business relations with dominant fixed-line former monopoly Slovak Telekom, a.s. (ST). It will significantly reduce its purchase of data services and marketing support of telecommunications services from ST's wholesale offer. "Several-years lasting negotiations with ST on a suitable trade models did not bring acceptable result. We are gradually losing a faith that we might find a satisfactory solution to the current situation and, therefore, we cancelled a large number of data lines rented from ST," Slovanet PR manager Ivica Hricova told SITA. The company's' executive director Peter Macaj added that Slovanet will focus on provision of Internet, data, and voice services built on its own infrastructure.
Slovakia Will Not Lose on Giving up SE Dividends, Says Miklos
Slovakia will not lose on giving up dividends from Slovakia's dominant power producer, Slovenske Elektrarne, a.s., (SE), until 2010, stated MP and former Finance Minister Ivan Miklos. "If dividends are not paid out, they will remain in the company and will be invested, which will increase the value of the company shares and future dividends and, thus, also the value of one-third of state-controlled stake and future dividends of the state. The state, thus, did not lose anything because in principle it does not mater whether the money is paid out or well invested," Mr. Miklos told SITA.
FNM Disagrees with Proposed Power Distributor ZSE's Unbundling
The government privatization agency, the National Property Fund (FNM), as a 51-percent shareholder in western Slovakia's regional power distributor, Zapadoslovenska Energetika, a.s., (ZSE), disagrees with the prepared proposal for unbundling parts of the company. "As for us, this process has not been concluded. We have a bit different opinion on how the new subsidiaries should function. We submitted proposals and now we are waiting when the other side will come to the talks. If an agreement is concluded, then the unbundling will be approved," FNM Vice President Vladimir Kocourek told journalists on Thursday. FNM President Peter Simko said that the reflection of a shareholder structure in subsidiaries and the strengthening of the FNM's influence would be high on the agenda of shareholders' talks. The power distributor is obliged to separate distribution from all the other activities by July 1, 2007. Other shareholders in ZSE are the German E.ON Energie, controlling 40 percent, and the European Bank for the Reconstruction and Development (EBRD), owning 9 percent.
Slovak Telekom Group Posts Nine-Month EBIT of SKK 2.995 Bln.
Telecommunications operator Slovak Telekom (ST) reported a 4.1-percent year-on-year rise in total consolidated revenues to SKK 22.565 billion in nine months of 2006. The group informed that revenues from fixed-network services made up SKK 11.828 billion of total revenues before consolidation. Revenues from mobile communication were almost SKK 11.778 billion. Consolidated operating costs without depreciation amounted to SKK 11.763 billion on a 7.7-percent y/y increase. The group registered a growth in operating costs in mobile-network services, mainly because ST focused on the stabilization and further expansion of the client base. The nine-month consolidated taxed profit dropped 12.8 percent y/y to SKK 2.26 billion. The figures were calculated according to international financial reporting standards (IFRS). Results of the mobile operator T-Mobile Slovensko a.s., are fully consolidated in the operating results of Slovak Telekom because ST is the sole owner of the mobile operator.
MONEY MARKET: Trading Atmosphere Calms Down on Thursday
Calm trading atmosphere marked Thursday's trading on the interbank market, in contrast to Wednesday. ING dealer Martin Koska assumes that trading calmed down owing to the stabilization of the Slovak currency. While the crown continued to improve its high against the euro on Wednesday, it was almost flat on Thursday. Commercial banks deposited SKK 25.158 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Thursday, meeting the minimum requirement for November on a cumulative basis at 121.73 percent.
STOCK MARKET: SAX Index Strengthens Moderately
Slovakia's official SAX share index improved on Thursday 1.06 points or 0.27 percent to 396.87 points. Shares of the Slovak crude-oil refiner Slovnaft were behind these gains. Turnover on the Bratislava Stock Exchange (BCPB) rose very little, from SKK 241.9 million on Wednesday to SKK 244.76 million on Thursday, with SKK 1.456 million in share trading.
FOREX MARKET: Crown's Exchange Rate Almost Flat on Thursday
The exchange rate of the Slovak currency barely moved during Thursday's trading on Slovakia's foreign exchange (FOREX) market after having reached a new record against the euro on Wednesday. Ludova Banka dealer Daniel Pavlovic commented that the exchange rate stayed in a narrow band around 36.100 SKK/EUR, and trading atmosphere was very quiet.