Summary of economic news released on Monday, November 27
Petrol Prices Moderately Dropped as of November 20
As of November 20, the average retail price of 95-octane petrol decreased SKK 0.02 to SKK 36.55 per liter compared with November 10, the Slovak Statistics Office reported. The average retail price of 98-octane petrol was SKK 39.11 per liter, down SKK 0.01. The average retail price of one liter of diesel remained unchanged at SKK 37.98. The average retail price of LPG dropped SKK 0.01 to SKK 21.70, spokeswoman for the Slovak Statistics Office Eva Kelemenova informed on Wednesday.
Construction company ZIPP Reports H1 Revenues of SKK 3.24 Bln.
Construction company ZIPP Bratislava, s.r.o., closed the first half of this year with total revenues of SKK 3.24 billion, up 4 percent y/y. Costs went up 3.7 percent to exceed SKK 3.048 billion. H1 profit was SKK 191.7 million, up over 10 percent. Sales of own products and services were SKK 2.875 billion, which was 6.2 percent more from a year ago.
SABMiller Consolidates its Operations in Slovakia
A new company, Pivovary Topvar, a.s. will start operating on the Slovak beer market next year. It will originate by a merger of breweries Saris, a.s. and Topvar, a.s. World brewery group SABMiller will be an exclusive owner of Pivovary Topvar, a.s. "When choosing the name for the company, we followed a practice of SABMiller's European breweries. They created their names using the principle of connecting a word Pivovary (Breweries) with a famous local brand," company director general Imrich Havris told SITA. The merger itself is scheduled for January 1, 2007, when Pivovar Saris will become a successor company to Topvar brewery. Topvar brewery will be erased from the corporate register as of this day. On the same day Pivovary Saris will be renamed to Pivovary Topvar, a.s.
Kontinuita Insurer with Q1-Q3 Written Premiums of SKK 1.147 Bln.
The insurance company Kontinuita Poistovna reported written premiums of SKK 1.147 billion for three quarters of this year. This is an increase of 22.6 percent y/y and the insurer exceeded the level of SKK 1 billion already during the third quarter. Kontinuita Poistovna has almost doubled its Q1-Q3 profit to SKK 22.8 million and the balance-sheet total grew 19.2 percent y/y to over SKK 3 billion, the company representatives informed SITA.
Socialna Poistovna Reports 250,000 Economically Inactive Savers
The social security provider, Socialna Poistovna, registers at present more than 1.5 million pension savers of whom almost 250,000 already do not work. These data come from the updated convergence program of Slovakia until the year 2010 that will be on the cabinet's table on Wednesday. The document explains that a portion of the registered pension savers joined the system only to meet the June 2006 deadline for entry into the second capitalization pillar of pension saving. These clients paid to pension funds only one or two months and after their application was accepted they stopped contributing to the system.
Some Health Insurers Regard Ministry's Proposals Dangerous
The Association of Health Insurance Companies (ZZP) views the recent proposals that the Slovak Health Ministry presented to the public as dangerous for the whole health care insurance system. Moreover, ZZP doubts whether Health Minister Ivan Valentovic is their real author. ZZP president Igor Dorcak said at a press conference on Monday, November 27, that moreover it is impossible to realize the idea that policyholders, for which the state pays health premiums, become clients of only state-controlled health insurers in the real life. "If such a system is introduced, it would cause administrative chaos, losses of billions of crown, and it would also disrupt purchases of health care services," warned Mr. Dorcak.
SDKU-DS Accuses Government of Abandoning Education as a Priority
Deputy chairman of the opposition Slovak Democratic and Christian Union-Democratic Party (SDKU-DS) Ivan Miklos accused the current government abandoning education and science as the government's priority. The former Finance Minister specified that the figures in the draft state budget prove that the government is walking in the opposite direction as the previous government and does not support knowledge-based economy that increases competitiveness of the country. Mr. Miklos says that Slovakia will be consuming its future, as immediate consumption is getting the green light.
Singaporean Minister Sees Business Opportunities in Slovakia
Senior Minister of Singapore Goh Chok Tong confirmed interest in developing businesses in Slovakia. "Slovakia is really a center where all possibilities meet towards the European Union as well as Ukraine and Russia," he said after a meeting with the Slovak Foreign Minister Jan Kubis. There is already one Singaporean company in Slovakia, which works as a supplier for Panasonic. Mr. Tong sees business opportunities also for other companies, which could deliver components for automotive or electrical engineering companies in cooperation with Slovak companies.
Bata Slovakia Achieved 2005 Sales of SKK 513.8 Mln.
Footwear retailer Bata Slovensko, a.s., Bratislava, moderately increased its last year's sales of goods by 0.5 percent to SKK 513.8 million. The cost of sales, however, rose 6.3 percent to over SKK 320.3 million. The trade margin shrunk to SKK 193.5 million from the previous SKK 210 million. Added value was SKK 105.1 million, down 19.9 percent. The company informed that its taxed profit was SKK 20.1 million in 2005. However, in 2004 the company netted SKK 46.2 million.
Major Reconstruction Planned for SLK Trencianske Teplice Spa
Arca Capital Slovakia, a.s., plans to invest around SKK 1.5 billion in the Slovak spa company Slovenske Liecebne Kupele, a.s., (SLK) Trencianske Teplice in the next five years. Arca Capital Slovakia from Bratislava entered SLK Trencianske Teplice in October last year through Deotis, s.r.o. It thus became a majority owner of the spa holding 68 percent of its shares. Arca Capital Slovakia intends to reconstruct several spa facilities and premises. The chairman of the board of directors in Arca Capital Slovakia Dag Vaskor is sure that the investments will have a positive impact not only on development of spa but also on development of the town and its surroundings.
MONEY MARKET: ARDAL Accepts SKK 543 Mln. in Government-Bond Auction
Trading on the interbank market was calm on Monday, and the market barely registered any transactions. Tatra Banka dealer Jozef Bozek commented that an auction of 13-year government bonds No. 204 enriched trading at the beginning of the week. Bank bids were SKK 1.613 billion, of which bids from nonresidents were SKK 300 million. The Debt and Liquidity Management Agency (ARDAL) accepted bids of SKK 543 million at the average yield of 4.278 percent p.a., and SKK 200 million fell to nonresident bids. The minimum yield was SKK 4.250 percent p.a., and the maximum yield was 4.300 percent p.a.
NAY Retail Chain Plans to Open Five New Stores in Slovakia Next Year
NAY, a.s., Bratislava, a leading white and brown goods retailer in Slovakia, plans to open five new stores in Slovakia next year. Paul Greeman, co-founder and former partner of Navigator Finance, a company which was an advisor when private equity Enterprise Investors entered NAY, said that NAY wants to also open five new stores in the Czech Republic in 2008. According to Mr. Greeman, NAY has an ambition to open additional five stores in the Czech Republic in 2009 while the Czech network should expand by six stores in 2010. By the end of 2006 the retail chain plans to open two new stores in Slovakia, in Zvolen and Nove Zamky.
Delphi Slovensko Reports 2005 Output of SKK 3.4 Bln.
Delphi Slovensko, s.r.o., Senica, a company producing auto cables, reported sales of its products and services of SKK 3.378 billion in 2005. Compared with the previous year, sales decreased 1.5 percent. Total output last year was SKK 3.379 billion on production costs of SKK 2.254 billion. Production costs shrank 5.7 percent y/y. Last year the company generated added value of SKK 1.125 billion, up almost SKK 77.5 million y/y. These figures come from the company's data published in the commercial bulletin.
Financial Market Does not Expect a Key Rates Change in November
The financial market in Slovakia expects that the Slovak central bank should extend by at least one more month the break between two rises of key interest rates. After the National Bank of Slovakia (NBS) kept the key interest rates unchanged in October, the markets were convinced that the central bank would raise the rates in November. However, the firming Slovak currency and a more positive development in the inflation rate have changed their opinion. "The Slovak crown appreciated by almost 80 hallers from the latest session of the NBS Bank Board and it seems that the currency may firm significantly by 6.3 percent y/y in the last quarter of 2006.
STOCK MARKET: SAX Index Loses 0.02 Pct. at Beginning of Week
The Bratislava Stock Exchange (BCPB) opened this week with slight losses. Shares of the power-engineering company SES Tlmace pulled down the SAX index 0.02 percent or 0.07 points to 409.94 points. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 2.029 billion on Friday to SKK 1.629 billion on Monday with SKK 7.899 million in share trading.
Firms Involved in Price Cartel Excluded from Public Procurement
Six construction companies involved in the price cartel in the tender for the construction of the D1 highway section between Mengusovce and Janovce might be excluded from public procurement for five years. This information comes from the opinion issued by the Public Procurement Office (UVO). "The law on public procurement says that only an applicant who did not seriously harm professional duties in the past five years can take part in public procurement," UVO press secretary Helena Fialova explained the reason for this stance. However, it is still unclear from what day should the above five years be calculated. Ms. Fialova said it will depend on an agreement with the European Commission (EC), as well as on an opinion of the Antitrust Office (PMU).
Cities Want Influence Over State Airports on their Territory
The self-governments of Kosice and Bratislava respect the intention of the Transport Ministry to cancel the transfer of ten percent of shares in companies operating the Bratislava and Kosice airport to the respective counties and cities. However, they would like to participate in the development of airports. The self-governments would agree to the cancellation of the transfer of shares only if the shares remained in state hands. However, they oppose offering their shares for sale on the open market.
FOREX MARKET: Crown Gains over Ten Hallers towards Euro
The Slovak currency strengthened more then ten hallers towards the euro on the FOREX market in Slovakia on Monday. Tatra Banka dealer Boris Somorovsky stated that surrounding markets helped the crown improve, when the Hungarian forint and the Polish zloty reported gains, and similar transactions were carried out with the Slovak currency. Thus, the crown's exchange rate against the euro got from the opening level of 35.700/35.740 SKK/EUR to 35.570/35.610 SKK/EUR, where it also stood before the close of trading.