Summary of economic news released on Friday, November 24
CPS Insurer with Q1-Q3 Pre-tax Profit of SKK 75.7 Mln.
Insurance company Ceska Poistovna-Slovensko, a.s, (CPS) closed the first nine months of 2006 with a pre-tax profit of SKK 75.7 million, a major improvement from a loss of SKK 30.6 million for this period last year. CPS reported written premiums of SKK 2.7 billion from January to September. Written premiums in life insurance grew 76.7 percent to SKK 937 million. Data in the segment of non-life insurance are not comparable with the previous year since the company changed its accounting system this year, the insurer informed SITA.
Chemes Humenne Reports SKK 885 Mln. Sales in 3Q
Energy utility Chemes Humenne reported sales of its products and services of SKK 884.9 million in three quarters of this year, which is 2.2 percent more year-on-year. Output during this period was SKK 899.1 million, which is 2.8 percent more than a year ago, head of the financial-administrative department Frantisek Chvostal informed SITA. He added that in nine months of the year Chemes earned a taxed profit of SKK 42.2 million, which is SKK 9 million more than in the same period of 2005. Capital investments amounted to SKK 30 million, mostly into improvements of reliability of generation and distribution of energies. The company reduced its labor force to 445 people and the average monthly wage was SKK 19,227.
Ludova Banka Plans to Float SKK 430 Mln. Mortgage-Backed Bond
Ludova Banka, a.s. plans to float mortgage-backed bonds of SKK 430 million to finance mortgage lending. The bank will float the issue over a two week period starting on December 1. The par value of the security is SKK 100,000. Bonds will bear a fixed interest rate of 4.5 percent p.a. The bonds mature on December 1, 2011, after which date they will bear no interest rate. Shareholders of the bank approved the issue at an annual general meeting in June.
Dexia Banka Gets Credit Line of EUR 30 Mln. from the EIB
Dexia Banka Slovensko a.s. and the European Investment Bank (EIB) signed this week an agreement on a credit line of EUR 30 million representing about SKK 1 billion. The credit line is intended for financing small and medium-sized environmental and infrastructure projects, modernization in healthcare, education, and knowledge-based economy. By the credit line, the EIB is providing funding for Slovak projects and with the use of experience of Dexia Banka with financing of municipal and infrastructure projects, the Slovak bank informed.
Aluminum Smelter Slovalco Reported Sales of SKK 11.6 Bln. Last Year
Aluminum smelter Slovalco a.s. Ziar nad Hronom boosted its sales of products and services by 3.4 percent to almost SKK 11.577 billion in 2005. The company further disclosed in the Commercial Bulletin on the Internet portal www.epi.sk, that its production costs shrank by about 1 percent to SKK 8.109 billion. Added value was SKK 3.619 billion, up SKK 579.2 million y/y.
More than 61,000 People are Without a Job for More than Four Years
Over one-fifth of all job applicants in Slovakia, whom job offices reported in late October, were registered as job seekers more than four years ago. They made up more than 61,000 out of 271,000 job seekers. Even though the total number of registered unemployed decreased in October by 51,211 persons when compared with October 2005, the number of people without job for more than four years increased by almost 2,700 people. The highest number of long-term unemployed people are in the counties of Kosice, Presov, Banska Bystrica and Nitra, the Labor, Social Affairs and Family Office informed on Friday.
VUB Analyst Still Sees Appreciation Prospects for the Slovak Crown
The Slovak crown could strengthen more significantly also in the upcoming period. This stems from an analysis of VUB Banka, according to which in particular an unexpectedly high growth of the gross domestic product (GDP) creates room for further appreciation of the local currency. VUB Banka chief analyst Zdenko Stefanides rather regards the recent firming of the Slovak crown as catching-up with other economic fundaments than overtaking them. The analysis reads that the higher than expected economic growth might push the conversion rate of the Slovak crown and the euro up to 33 SKK/EUR while original estimates were around 35 SKK/EUR. Such a scenario would mean that the crown will make a full use of possibilities to appreciate within the ERM II mechanism, which is a preparation for euro-zone entry.
Baby Food Distributor Nutricia with 2005 Sales of Nearly SKK 293 Mln.
Nutricia, s.r.o., a company distributing baby food, closed last year with total sales of SKK 292.7 million. Thereof, sales of goods grew 22.3 percent y/y to SKK 251.5 million. Cost of sales reached SKK 170.6 million. They increased by 18.1 percent y/y. The trade margin amounted to SKK 81 million, which is up 32.1 percent. Sales of own products and services achieved SKK 38.9 million. Operating profit was SKK 25.7 million, which is an increase of nearly 160 percent.
Rigips Slovakia with SKK 441.1 Mln. Sales in Past Business Year
The company Rigips Slovakia, s.r.o. Trnava that produces insulation materials reported sales of goods at SKK 441.1 million in the last business year from April 1, 2005 to March 31, 2006. The cost of sales was SKK 345.1 million. According to the Commercial Bulletin the trade margin was SKK 96.1 million. Sales of own products and services were SKK 212.9 million on production consumption of SKK 204.1 million. The company generated added value f SKK 119.2 million.
Government Claims against Debtors in Bankruptcy to be Shifted to SKo
All the general government claims against debtors in bankruptcy and in liquidation should be transferred to state-run bailout agency Slovenska Konsolidacna, a.s., (SKo), regardless of the date of their origin. The concept approved by the Cabinet last September counted on shifting claims that originated and will originate from the beginning of 2006 under the mandate administration of SKo. This means they would not become a part of the agency's assets. This mandate model of solving general government claims would apply to newly-originated claims of the tax and customs offices, social-insurance provider Socialna Poistovna, and state health insurers. However, the materials submitted by the Finance Ministry for the interdepartmental review read that the mandate model of solving the general government claims against debtors in bankruptcy is not suitable because it is ineffective and demanding.
Slovakia's FOREX Reserves up USD 143.4 Mln. This Week
Slovakia's foreign exchange (FOREX) reserves reported a growth of USD 143.4 million over the past week to USD 16.0763 billion as of November 22. Behind the increase was particularly a growth in the reserve assets of Slovakia's commercial banks as well as a slight rise in reserve assets of the central bank. Commercial banks' reserve assets increased USD 143.1 million w/w to USD 2.9044 billion. The National Bank of Slovakia's (NBS) reserves surged USD 300,000 to USD 13.1719 billion, the NBS informed.
Jahnatek Supports Joint Steps with V4 Countries
Economy Minister Lubomir Jahnatek received on Friday the Polish Ambassador to Slovakia, Zenon Kosiniak. The minister's spokesman Branislav Zvara informed SITA that they discussed energy safety. "They agreed in the opinion that this complex of questions already exceeds the borders of individual countries and it becomes hot, and, therefore, the European Union as a whole will have to solve it in the future," said Mr. Zvara. The minister and the Polish Ambassador expressed support for the intensification of contacts and the extension of discussions for taking joint steps and stances at the ministerial level of V4 countries (Slovakia, the Czech Republic, Hungary, and Poland).
Austrian Pankl Increases Stake in Sigus, Builds New Plant in Slovakia
After a two-year observation period, Austrian firm Pankl Racing Systems AG decided to increase its stake in the Slovak automotive supplier Sigus Slovakia from 31% to 100%. The company's name will be changed to Pankl Automotive and it will be fully consolidated from January 2007. The company employs about 100 persons and achieves annual revenues of about EUR 4 million, the Austrian company informed.
Money Market Once Again Closes Week in Liquidity Surplus
The money market once again closed the week in a liquidity surplus. UniBanka dealer Jozef Hempfinger said that commercial banks deposited SKK 12.897 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Friday, meeting the November minimum reserve requirement on a cumulative basis at 108.61 percent. An additional SKK 15.51 billion ended in the NBS overnight sterilization. At the end of the week, the NBS bill issues were settled. As much as SKK 1.15 billion from the NBS auction on Thursday left, and SKK 1.55 billion from the maturing issue returned to the sector.
Hame Slovakia Posted Sales of SKK 980 Mln. in Ten Months
The food processing company Hame Slovakia, seated in Stupava, which is a 100 percent subsidiary of the Czech company Hame Babice, reached sales of SKK 980 million in the period between January and October this year, up 8 percent y/y.
Pharmacists are Afraid of Double VAT Rate
Pharmacists are afraid of the planned changes to VAT rate on drugs. Several pharmacists at the meeting of the Association of Drugs and Medical Aids Suppliers (ADL) pointed out that the prepared lowering of the VAT rate on drugs should be valid as of January along with the new categorization of drugs. They are concerned that prices of a huge amount of drugs will have to be changed and all pharmacies will have to do the stocktaking, which will be very time consuming. This might cause problems in the supplies of drugs. Health Ministry State Secretary Daniel Klacko informed that the new VAT rate has not been determined yet. Everything depends on the approved draft state budget. He added that the ministry is aware of these problems.
STOCK MARKET: BCPB Slightly Sheds Previous Gains at End of Week
The Bratislava Stock Exchange (BCPB) slightly reduced its gains at the end of the week after a rapid strengthening on Thursday. Declining share prices of VUB Banka pulled down Slovakia's official SAX index 0.19 percent or 0.79 points to 410.01 points. Turnover on the BCPB dropped from SKK 3.335 billion on Thursday to SKK 2.029 billion on Friday with a mere SKK 1.461 million in share trading.
State Aid up to SKK 413.5 Mln. is Proposed for Continental AG
The state should support the investment of German engineering company Continental AG, which built a plant for production of brake components, with up to SKK 413.5 million. Economy Ministry states in its proposal, which was submitted for interdepartmental review, that the income tax relief should represent the largest portion of the state aid. This sum could achieve SKK 225.5 million maximally. Direct state subsidy for land buyout should be SKK 30.9 million and SKK 12.5 million should be allocated for preparatory works on land plots. Continental AG should gain further SKK 70.6 million of the proposed state aid in the form of sale of plots at a reduced price. The contribution for education and training of employees should reach SKK 21 million and contribution for newly created jobs should be SKK 53 million.
FOREX MARKET: Slovak Crown Closes Week with Busy Trading
The Slovak currency closed the week with a relatively busy trading. Tatra Banka dealer Boris Somorovsky said that the crown opened at 35.65/35.69 SKK/EUR. Profit taking by foreign banks initially pushed the crown's exchange rate against the euro up to 35.76/35.80 SKK/EUR. "Nevertheless, the crown rapidly strengthened at that level," Mr. Somorovsky further said. Thus, the exchange rate returned to 35.57/35.62 SKK/EUR. Later, the crown started to lose again, and the exchange rate stood at 35.68/35.72 SKK/EUR before the close of trading.
Czech Unex Plans to Launch Production in Premises of Former Vihorlat
Czech engineering group Unex Unicov plans to launch production in the premises of former company Vihorlat Snina. The company wants to manufacture equipment for heavy engineering from the beginning of next year there. The company's own capacities in the central Moravia proved to be insufficient to satisfy demand for its products and, therefore, it decided to expand to Slovakia. Metalurg trade union press secretary Maria Szabova told SITA that Metalurg and Kovo trade union leaders should meet Unex Unicov director general Petr Kalivoda in the premises of former company Vihorlat Snina on Saturday, November 25. Unex representatives should then meet with employees. The firm declared to offer job to most of the former employees.