Summary of economic news released on Wednesday, August 2
Gas Prices for Households to Rise by SKK 1 to SKK 2 per Cubic Meter
Prices of natural gas for households in Slovakia will probably grow by SKK 1 to SKK 2 per cubic meter. Gas monopoly SPP has asked the Regulatory Office for Network Industries (URSO) to approve an increase of natural gas for households prices as of October 1 when the heating season begins. SPP spokeswoman Dana Krsakova explained that SPP was forced to ask the regulatory authority for a hike of natural gas prices due to long-term unfavorable development of market factors influencing gas prices. She specified that that she had in mind permanently negative development of Brent crude oil prices.
Komercni Banka Bratislava Earns H1 Pretax Profit of SKK 39.4 Mln.
Pretax profit of Komercni Banka Bratislava, a.s. (KBB) was SKK 39.4 million in the first half of this year while its net profit stood at SKK 33.4 million. Net interest income amounted to SKK 29.6 million six months into this year while net income from fees and commissions totaled SKK 15.5 million. Net income from financial operations achieved SKK 9.5 million, informed the bank.
HSBC Bank in Slovakia Reports H1 Profit of SKK 6.7 Mln.
The Slovak arm of HSBC Bank plc. in Bratislava reported a pretax profit of SK 6.7 million for the first half of this year. The branch has been operating on the Slovak market since June 2005. According to Bratislava branch director Karel Bures after ten months of active operation in Slovakia the bank swung from the red to profit and H1 results thus meet expectations. Net interest income reached SKK 12.5 million in six months while net income from fees and commissions was SKK 10.1 million, informed the bank.
Armature Maker Slovarm Boosts 2006 Sales to SKK 317.7 Mln.
The company Slovarm, a.s. Bratislava that makes and sells valves and armatures boosted sales of own products and services by 13.9 percent y/y to SKK 317.7 million at the end of last year. The firm reported output at SKK 363.4 million last year on production consumption of SKK 298.9 million. Slovarm generated added value of SKK 66.8 million in 2005, up SKK 10.2 million from a year ago.
Slovak Arm of Commerzbank with H1 Pretax Profit of SKK 39.4 Mln.
The Bratislava-based arm of German Commerzbank AG reported gross profit for the first half of 2006 at SKK 39.4 million while net profit stood at SKK 33.4 million. Net interest income was SKK 29.6 million in late June 2006. Net income from fees and commissions achieved SKK 9.5 million, according to data disclosed by the bank.
Eurostat: Producer Prices in Slovakia Up 9.1 Pct. y/y in June
The European Union's Statistical Office Eurostat stated in its report released on Wednesday that Slovakia's industrial producer prices grew 9.1 percent on a year-on-year basis in June which means a slowdown from 9.9 percent in May. However, Slovakia remains in the group of EU countries with the highest growth of producer prices. Producer prices in Slovakia grew 0.2 percent in a month.
Dhollandia Central Europe Continues Developing in Slovakia
Belgian company Dhollandia Central Europe, s.r.o. is expanding its investment in the village of Predmier near Bytca, northern Slovakia. It has already built a facility to produce hydraulic platforms for lorries there and now it plans storage, production and administrative capacities on 12,000 square meters. The company has invested EUR 10 million in the plant plus technologies while building additional premises will require some EUR 5 million, said company's representatives. The investor is now waiting for a construction permit from the local authority but hopes that building works will start before the winter comes.
Czech Firm to do Feasibility Study on Modernizing Slovak Rail Network
Feasibility study on modernization of the railway route between Nove Mesto nad Vahom in western Slovakia and Cierna nad Tisou near the border with Ukraine will be elaborated by Czech firm Sudop Brno, s.r.o. Sudop won a public procurement, announced by the Slovak Transport Ministry and the concerned parties signed a contract in mid-July. The contract is worth SKK 14.3 million (without VAT) and it will be co-financed from the European Union (EU) structural funds. The ministry representatives said when announcing the tender that the study will serve as a basis for processing tender documentation related to project preparation and implementation of modernization itself. According to the ministry, the currently valid feasibility study was elaborated in 1995 and thus no longer fits current conditions and needs to be updated.
Spanish Telefonica Wins Tender for Third Mobile Operator in Slovakia
Telefonica O2 Slovakia, a subsidiary of Spanish company Telefonica, won the tender for a license to become the third mobile operator in Slovakia, the Slovak Telecommunications Office informed SITA on Wednesday. "Mobilkom Austria and B Four, a.s. are next in the ranking of tender applicants," said the office's spokesman Roman Vavro. A nine-member tender commission decided on the winner on August 2. The Telecommunications Office will issue a decision on allocation of GSM 900 and 1,800, UMTS and FS 29 GHz frequencies to the tender winner within four weeks. The office will inform about issuing the license and concrete conditions that the winner has undertaken to meet after the license takes effect, said Mr. Vavro. A source close to the tender commission told SITA that Telefonica O2 Slovakia made the lowest bid of SKK 150 million for the license. Austrian mobilkom Austria reportedly bid SKK 250 million. B Four confirmed it bid SKK 400 million for the license. However, the price bid only had five-percent weight in evaluation of applicants' bids.
Geothermal Drilling Contracts Improved Performance of Ingeo Zilina
Zilina based company Ingeo completed the first drilling in its project of geothermal energy use in Bardonov. Director general of the company Ingeo, a.s. Ladislav Kovac informed that the contract worth over SKK 150 million consists of three drilled wells 1,700 meters deep. The works are scheduled to be completed next year. According to Mr. Kovac this contract contributed significantly towards improvement of company's performance in comparison with previous year. The company posted a profit of over SKK 10 million in the first six months of this year after it reported a loss of SKK 14 million last year. Mr. Kovac expects that merging of the parent company with its subsidiaries should bring better organization of works and improvement of economic results. Shareholders decided at the annual generally meeting on the merger at the beginning of June.
Sherlock, s.r.o. More than Tripled its Taxed Profits in 2005
Producer and seller of doors with security systems, Sherlock, s.r.o. Bratislava reported total sales of SKK 177.9 million last year. Of this, sales of its products and services accounted for 78.8 percent. They dropped by 1.5 percent y/y to SKK 140.1 million. Production costs fell by 8.6 percent to SKK 81.4 million. The firm generated added value of SKK 68.9 million, up by 6.6 y/y. The company more than tripled its taxed profit to SKK 13.5 million. Operating profit was SKK 18.5 million and the loss from financial operations was SKK 1.8 million.
MONEY MARKET: Market Remains in Moderate Liquidity Surplus
The interbank market remained in a moderate liquidity surplus after the settlement on two-week repo tenders of the National Bank of Slovakia (NBS) on Wednesday. Tatra Banka dealer Jozef Bozek stated that banks deposited SKK 130.717 billion in the repo tender on Tuesday, while up to SKK 76.128 billion from maturing sterilization contracts returned to the market midweek. Commercial banks deposited together SKK 24.665 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Wednesday meeting the minimum reserve requirement for August on a cumulative basis at 225.16 percent. Additional SKK 8 billion ended in overnights in the central bank.
Most of November 2004 Calamity Wood Processed by June
As of the end of June this year, wood processing firms processed around 92 percent of the calamity wood on an area hit by the devastating windstorm in November 2004, informs a report elaborated by the Agriculture Ministry. Out of the total volume of over 5.4 million cubic meters of wood, nearly 5 million cubic meters were processed at the end of June. "Calamity wood could not be processed at the most inaccessible sites and areas, where extraction was forbidden by the state environmental bodies. Out of the total area of 14.300 hectares, wood processing companies cleared wood from the total area of 8.400 hectares and planted new trees on 3.200 hectares. The calamity wood is gradually sold, though the extraction rate is lower than last year.
Embraco Slovakia Boosted its Output by 30 Pct So Far this Year
Producer of compressors Embraco Slovakia s.r.o., Spisska Nova Ves boosted output by 30 percent since the beginning of this year. While the company produced 3.36 million compressors and condensing units in 2005, it is currently operating at full capacity of 4.4 million compressors annually. Output growth is linked to increased demand for high performance household refrigerator compressors and compressors for cold storage bars and showcases. As the company's director general Carlos Xavier stated, Embraco as an international company can maintain its 25-percent share on the world market also with output from its Slovak plant. The factory based in Spisska Nova Ves hired six hundred new employees this year. With 2,411 employees, Embraco is the biggest employer in the Spis region in eastern Slovakia. The company is however starting to suffer from a shortage of qualified workforce in the region.
Matador Group Posted H1 Sales of SKK 8.53 Bln.
Matador group generated total sales of SKK 8.53 billion in the first six months of this year, which is up 14 percent y/y. The rubber section of Matador made up for around 80 percent of the total sales of the company, sales from automotive section made up the remaining 20 percent. Matador in Slovakia, Russia and Ethiopia produced nearly 4.6 million of tires, Matador spokesman Dusan Koblisek informed on Wednesday. Matador closed the first six months with a pretax profit of SKK 580 million, which is up 26 percent.
FOREX MARKET: Trading was Quiet on Wednesday
Trading on the Slovak FOREX market was calm and activity was low also on Wednesday. Tatra Banka dealer Bibiana Valachyova added that the Slovak crown moved in a narrow band between 38.080 SKK/EUR and 38.120 SKK/EUR for almost the whole session. "But before market closed the crown, influenced by the regional development, firmed moderately when the exchange rate moved by two hallers to 38.38.060/080 SKK/EUR," said the dealer. If nothing significant and unexpected happens on the neighboring markets, the exchange rate of the local currency and the euro might remain in the range between 37.900 SKK/EUR and 38.200 SKK/EUR during the next few days.
STOCK MARKET: VUB Shares Moved SAX for the First Time this Week
After stagnation over two trading days of this week, the official SAX share index moved higher on Wednesday. Thanks to fifteen shares of VUB bank the SAX gained 1.13 percent or 4.37 points to 390 points. Turnover on the Bratislava Stock Exchange (BCPB) decreased from SKK 33.376 billion on Tuesday to SKK 1.344 billion on Wednesday with SKK 993,400 in share trading.
Ivan Miklos Calls Government's Program Statement an Uncovered Note
In a debate on the government's program statement, also former Finance Minister and deputy for the Slovak Democratic and Christian Union-Democratic Party (SDKU-DS) Ivan Miklos presented his opinion. He warns that the program statement of the new government will imperil healthy growth of the economy. "The government's program statement is an uncovered note, which citizens of Slovakia will have to pay. The program puts at risk healthy economic growth and competitiveness of Slovakia," said Mr. Miklos during the debate on the document. He underscored that he would not vote for this inconsistent and contradictory document.