Summary of economic news released by SITA on Tuesday, August 8
Banks Generated H1 Pretax Profit of SKK 9.559 Bln.
The banking sector in Slovakia closed the first six months of this year with an aggregate pretax profit of SKK 9.559 billion. The share of three biggest Slovak banks i.e., Slovenska Sporitelna, VUB Banka, and Tatra Banka on the total pretax profit was 64 percent. Information released by banks show that nearly all banks operating on the Slovak market ended in the black in the first six months of the year. Two branches of foreign banks, Banco Mais and J&T Banka ended in the red. They have been operating on the Slovak market only for a short time and they ascribe their loss to increased investments into development of their branches. HSBC Bank managed to generate a profit already after ten months of operations in Slovakia.
Slovak Construction Output Increased by 16.3 Percent y/y in June
Construction output of Slovak companies rose by 16.3 percent on a year-on-year basis to SKK 13.7 billion in June of this year. The development in June results from higher growth in new construction, modernization and reconstruction reporting an increase by 25.3 percent. Construction output in maintenance and repair works dropped for the second time this year by SKK 8.6 percent. Construction output abroad by Slovak companies kept shrinking by 21.2 percent, the Slovak Statistics Office informed SITA on Tuesday.
Dairy Milex Nove Mesto nad Vahom with H1 Sales of SKK 472.7 Mln.
Dairy Milex Nove Mesto nad Vahom, a.s. generated total sales of SKK 472.7 million in the first six months of this year. Sales of its products and services stood at SKK 367.2 million. Revenues from goods sold reached SKK 105.5 million, while cost of sales were SKK 85.1 million. The trade margin was SKK 20.4 million, reads non-audited, non-consolidated data calculated in line with Slovak Accounting Standards (SAS) released by the Bratislava Stock Exchange (BCPB). The firm generated an added value of SKK 100.3 million.
Industrial Output in Slovakia Up 11.9 Percent y/y in June
Industrial output in Slovakia grew 11.9 percent y/y in June. Behind this growth was, among other things, a 13-percent increase in industrial manufacturing. Electricity, natural gas and water production and distribution was 9.8 percent higher than a year ago, while mining and mineral extraction decreased 12.7 percent y/y, the Slovak Statistics Office informed SITA on Tuesday.
Midyear Profit of ZSSK Cargo was SKK 350.9 Mln.
Railway cargo company Zeleznicna Spolocnost Cargo Slovakia, a.s. (ZSSK Cargo) earned a profit of SKK 350.9 million in the first half of this year. "Since the company planned a loss of SKK 355 million in H1, its economic result is SKK 706 million better than planned," ZSSK Cargo spokesman Ladislav Jandosek informed SITA. Costs of the company reached SKK 9.64 billion, which is SKK 31 million above projection. Revenues amounted to SKK 9.991 billion, which is SKK 737.9 million above the plan for the monitored period. Mr. Jandosek ascribed higher revenues to SKK 330 million growth of transport sales, sale of assets for SKK 169 million and SKK 91 million higher financial revenues.
Telecom Sector Achieved Total Sales of SKK 58.3 Bln. in 2005
Total sales of the Slovak telecommunication sector rose by 8.3 percent to SKK 58.3 billion over 2005. Mobile operator Orange Slovensko with sales of nearly SKK 21.429 billion accounted for the biggest share of 36.8 percent. Fixed-line operator Slovak Telekom followed with sales of SKK 16.012 billion and a market share of 27.5 percent, while the market share was 31.4 percent in the previous year. Slovak Telekom has announced that its 100-percent affiliated mobile operator T-Mobile Slovensko occupied 25 percent of the market and its sales amounted to SKK 14.59 billion. Alternative operators managed to increase their market share by 2.8 percentage points to 10.8 percent when their aggregate sales amounted to around SKK 6.269 billion.
Slovakia Applying for EU Funds for a Water Project in Trencin County
Slovakia applies for EUR 23.3 million. from the European Union Cohesion Fund for a project of protection of water resources in the Trencin County, reads a draft application on providing of aid from the Cohesion Fund, which the Construction Ministry submitted for interdepartmental review on Tuesday. Total eligible budgeted costs of the project, which involves a sewage system in twelve villages, should reach EUR 27.879 million, which is approximately SKK 1.05 billion. A total of 83.6 percent of funds needed for the project should come from the Cohesion Fund, 10 percent of funds should be allocated from the state budget and 6.4 percent should be secured by water utility Trencianske Vodarne and Kanalizacie, a.s.
New Contracts Helped Improve Bratislava Airport's Profitability
The largest airport in Slovakia, M. R. Stefanik Airport in Bratislava reported earnings before interest, tax, depreciation and amortization (EBITDA) of SKK 217 million in seven months of this year. The airport's pretax profit amounted to SKK 95.3 million, almost 145-fold the company showed for the same period of last year. The airport's executive director Milan Kajan ascribed the increase to rationalization measures, when despite extensive investments, labor force increases, and rising wage costs the airport managed to maintain total costs at a comparable level, while revenues rose 30 percent. He added that chiefly contracts with new airline companies contributed to this.
Slovak Finance Ministry Says Euro Zone Entry is on Schedule so Far
Preparations to join the euro zone are progressing according to schedule so Slovakia could adopt the single European currency as of January 1, 2009, reads a report on meeting the national euro adoption plan. The cabinet should deal with the report at its regular meeting on Wednesday. According to the report Slovakia is meeting the criterion for general government debt and long-term interest rates at the moment. Current development of exchange-rate stability indicates that its meeting should not pose a serious problem.
INVESTING: Pension Fund Companies Managed SKK 19 Bln. on August 4
Pension fund management companies (DSS) managed savers' assets amounting to a net value of SKK 19.02 billion as of August 4, 2006. The value of assets in pension funds of six Slovak DSS thus grew by SKK 242.1 million last week. Of the total, SKK 12.458 billion was in growth funds, SKK 5.774 billion in balanced funds and SKK 790.5 million in conservative funds.
Entrepreneurs Group is Critical of Planned Changes to Labor Code
The Slovak Association of Entrepreneurs (ZPS) is disappointed by Labor Code changes proposed in the government's program statement. ZPS chairman Jan Oravec assumes that employment and labor market policy modifications will, in the final effect, raise unemployment. He warns that employers will be put off hiring new people if plans elaborated in the government's program statement are put into practice. Mr. Oravec in particular has in mind higher protection of employees against dismissal, restrictions of flexible forms of labor relations, and higher minimum wage.
Komarnanske Tlaciarne Printing House with SKK 300 Mln. H1 Sales
Sales of products and services of printing house Komarnanske Tlaciarne s.r.o. exceeded SKK 300 million over the first six months of this year. The company's director general Stefan Meszlenyi said sales increased by 14 percent y/y and the firm generated added value of SKK 43.9 million.
Slovnaft Supports Government's Efforts to Buy Back Transpetrol Shares
Hungarian-owned Slovak crude oil refiner Slovnaft stated on Tuesday that the company is ready to support the Slovak government's effort that would result in buying back 49-percent shares in crude oil pipeline company Transpetrol, currently in the hands of ailing Russian oil major Yukos. Slovnaft is ready to financially participate in the transaction. Slovnaft spokeswoman Hana Simkova specified that if the main obstacle to buying back the Transpetrol stake is a lack of finances, then Slovnaft could provide the government a short-term loan. Slovnaft director general Oszkar Vilagi told Economy Minister Lubomir Jahnatek about the offer during their Monday meeting.
Vipo Partizanske Reports H1 Sales of SKK 96.4 Mln.
Research and production company Vipo, a.s, Partizanske, a member of the Matador group, reports sales of products and services of SKK 96.4 million for the first half of 2006. Compared with the previous year's period this is an increase by 2.4 percent. Production costs dropped by 13.9 percent to SKK 61.5 million. The company generated added value of SKK 39.9 million, meaning an annual increase of SKK 8.8 million.
Power Distributors have yet to Calculate Next Year's Prices
Regional power distribution companies Zapadoslovenska Energetika, a.s. (ZSE) and Vychodoslovenska Energetika, a.s. (VSE) do not yet know what electricity prices will look like next year. "Results of the first electricity auction by Slovak dominant power producer Slovenske Elektrarne indicate an assumed twenty percent increase in the power component of the electricity price, which makes up the main part of the final price in the case of many clients," said VSE spokeswoman Andrea Danihelova.
MONEY MARKET: NBS Accepts All Bank Bids of SKK 165.4 Bln. in Tender
In the regular two-week sterilization repo tender on Tuesday the National Bank of Slovakia (NBS) accepted all bids from commercial banks of SKK 165.401 billion at a single yield of 4.5 percent p.a. OTP Banka dealer Juraj Mitosinka told SITA that the money market will get into a liquidity deficit since SKK 127.942 billion from the maturing NBS repo tender will return to the market on Wednesday. Commercial banks deposited SKK 31.551 billion in their reserve accounts in the central bank, meeting the minimum reserve requirement on a cumulative basis at 157.81 percent on Tuesday.
STOCK MARKET: SAX Index Continues its Stagnation
Following four consecutive days of stagnation the official SAX share index insignificantly firmed on Tuesday, gaining 0.02 percent or 0.07 points. Shares of SES Tlmace power engineering company, the sole SAX base issue traded on Tuesday, moved the index to 390.07 points. Turnover on the Bratislava Stock Exchange (BCPB) increased from SKK 276.5 million on Monday to SKK 738.2 million on Tuesday with SKK 6.6 million in share trading.
FOREX MARKET: Slovak Crown Firms Moderately against Euro
Tuesday's trading on the Slovak foreign exchange market was calm with no significant exchange rate moves for the Slovak crown. Tatra Banka dealer Bibiana Valachova said the Slovak currency opened trading at 37.550/590 SKK/EUR, firmed about 5 hallers compared with Monday's closing level. It retained this level over the whole day when the number of deals was minimal. Shortly before the end of the session the crown firmed to 37.510/550 SKK/EUR.
Chemical Company NCHZ Announces SKK 2.968 Bln. H1 Sales
Slovakia's major chemical producer of organic and inorganic products Novacke Chemicke Zavody (NCHZ) a.s. Novaky registered sales totaling SKK 2.968 billion in the first half of this year, up 7 percent on a year-on-year basis. The company generated added value of SKK 603.8 million, which thus increased by 26 percent compared to June 2005. Director general Lubos Beno further stated that the company closed midyear with pre-tax profit of SKK 124.9 million compared to SKK 48.7 million at the end of June 2005. Operating profit from the company's primary activities reached SKK 158.4 million, exceeding expectations by 44 percent, added the director general.