Summary of economic news released on Monday, December 18
Liter of 95-Octane Petrol Cost SK 36.67 on Average in November
In November, average fuel prices in Slovakia recorded a moderate drop m/m. The average price of 95-octane petrol decreased SKK 0.74 to SKK 36.67 compared to October while the average price of one liter of 98-octane petrol fell SKK 0.75 per liter to SKK 39.22. The average retail price of one liter of diesel was SKK 38.08, down SKK 0.25 m/m. The average retail price of LPG went down SKK 0.04 to SKK 21.71 per liter, informed the Slovak Statistics Office.
Liptovske Strojarne Plus with SKK 557.4 Mln. Sales
The company Liptovske Strojarne Plus, a.s. in Liptovsky Mikulas that is involved in production of industrial knives reported sales of SKK 557.4 million for last year. Sales of own products and services were SKK 505.7 million, up 13.9 percent y/y. Production increased as well, by 16.4 percent to SKK 501.1 million. Production consumption was SKK 419.1 million. Added value was SKK 87.1 million while in 2004 it was SKK 70.8 million. Sales of goods represented SKK 20.8 million. Last year the company improved its performance when it reported a net profit of SKK 4.9 million. In 2004 the engineering firm netted SKK 2.3 million.
Bucina Zvolen and SLK Rajecke Teplice Announce Buyout Bids
Zvolen-based wood-processing company Bucina, a.s., as well as spa company Slovenske Liecebne Kupele (SLK) Rajecke Teplice, a.s., resided in Bratislava announced a mandatory buyout bid of their shares on Monday. The two companies were obliged to do so after shareholders approved a proposal to withdraw their shares from trading on the Bratislava Stock Exchange. The bids apply to those shareholders who did not vote for withdrawal of the shares from public trading, or those who did not attend the meetings. Bucina shareholders have now thirty calendar days to sell their shares for SKK 202 per share, while holders of SLK Rajecke Teplice shares can sell them for SKK 756. Both companies plan to finance buyout bids from their own resources.
Regulator Asks Slovak Telekom to Adjust Interconnection Prices
Market regulator the Telecommunications Office has started administrative proceedings against the company Slovak Telekom aimed at making interconnection prices for alternative operators to its fixed-line network more realistic. The authority's spokesman Roman Vavro said that the regulator has started the proceedings in the matter of adjusting prices and the subsequent change of the referential offer on its own initiative. The eventual change of fees that Slovak Telekom charges to other telecommunications operators for interconnection with its network aims to preserve the competitive environment in providing fixed-line services. The Telecommunications Office is checking fees proposed by the dominant operator to protect end-users.
Bearings Producer Kinex-KLF Returned to Black Digits Last Year
Engineering company Kinex-KLF, a.s., Kysucke Nove Mesto reported sales of products and services of SKK 1.415 billion last year, which is an increase of 7.9 percent compared with 2004. The company's output rose 7.4 percent y/y to SKK 1.47 billion. On production costs of SKK 1.128 billion the firm generated added value of SKK 347.6 million: up 30.5 percent y/y. Kinex-KLF significantly improved its performance from 2004, closing last year with a taxed profit of SKK 36.5 million, compared with a loss of SKK 35.9 million it made a year ago, according to data disclosed by the company.
Euro Wheels Slovakia Enters into Liquidation
Euro Wheels Slovakia, s.r.o., a 100-percent subsidiary of Indian company Steel Strips Wheels, Ltd., entered into liquidation on September 30, following a decision approved at the extraordinary general meeting on September 18, 2006. The company's liquidator, Peter Ilgo invites all creditors or other persons and entities that might be affected by the company's liquidation to file their claims or other potential rights within three months from publishing this announcement, according to information published in the Commercial Bulletin. Indian company Steel Strips Wheels planned to build a plant to manufacture wheel disks through its subsidiary in Slovakia.
Schneider Electric Slovakia Records SKK 838 Mln. Sales in 2005
The company Schneider Electric Slovakia, s.r.o. Bratislava that sells electrical equipment reported sales of SKK 838 million, up 7.4 percent y/y last year. Sales of goods amounted to SKK 718.6 million, down 3.3 percent last year. Cost of sales dropped 0.4 percent to SKK 544.2 million. Thus, the trade margin was SKK 174.4 million. On the other hand, sales of products and services posted a significant growth from SKK 37 million in 2004 to SKK 119.4 million last year. The company netted SKK 40.8 million in 2005 while a year ago its net profit was SKK 62.3 million. Added value was SKK 132.6 million.
Court Decides on Satisfaction of Stary Pramen Brewery Creditors
The Kosice Regional Court issued a verdict on distribution of proceeds from sale of assets of bankrupt brewery Stary Pramen, a.s., resided in Michalovce. The court in late November decided that SKK 3.8 million from total proceeds of SKK 34.9 million will be paid in reward to official receiver Iveta Kochanova. The court allocated SKK 5.7 million for other preferred claims, of which the tax office in Michalovce will get the biggest portion of SKK 3.4 million.
Higher Income and Lower Spending to Reduce 2006 Budget Gap
The state budget deficit this year will be several billions of crowns lower than projected in the state budget law. Higher than planned revenues, as well as not drawing of all drafted expenditures should be behind lower deficit. "We expect higher than budgeted tax collection," Finance Ministry's State Secretary Frantisek Palko said in an interview with SITA. Tax collection plan of SKK 215.7 billion has been met at 99.8 percent already in late November. Extra tax revenues should not be used to cover any expenditures and they should thus fully reflect in the deficit reduction, said Mr. Palko. They should also reflect in the general government deficit. "Actual general government deficit for this year will be several tenths of percentage points lower than the planned 2.9 percent [of GDP]," added Mr. Palko.
Goodyear Dunlop Tires Slovakia Posts 2005 Sales of SKK 423.3 Mln.
The company Goodyear Dunlop Tires Slovakia, s.r.o. Bratislava that is the exclusive importer of Dunlop tires to the Slovak Republic reported SKK 423.3 million sales over last year. This is 3 percent more than in 2004. Cost of sales increased 3.5 percent to SKK 259.9 million. Trade margin thus reached SKK 163.4 million, up 2.3 percent. Added value was SKK 107.5 million, a moderate y/y drop of 0.1 percent. The company netted SKK 76.2 million last year while in 2004 its taxed profit represented SKK 83.4 million.
Insurer Uniqa with Preliminary 3Q Pretax Profit of SKK 103 Mln.
Insurance company Uniqa Poistovna, a.s. Bratislava reported a nine-month profit before taxation of SKK 103 million according to preliminary data. The insurer generated a pretax profit of SKK 41 million for the whole year of 2005. Thus, according to company representatives, the insurer fulfilled its growth strategy in the third quarter. In the segment of revenues Uniqa reported written premiums of SKK 1.517 billion. The company's commercial output stood at SKK 587 million during the January-September period. Costs of paid indemnities were SKK 504 million during the monitored period. Simultaneously the insurer paid out indemnities of SKK 525 million for past damage claims and for which it formed standard reserves.
Group Slavia Capital Acquires 91 Percent in Czech Biodiesel Producer
Financial services and investment group Slavia Capital has acquired a 91.06-percent package of shares of Czech company Agropodnik Jihlava, whose main business line is biodiesel production. "Slavia Capital perceives the transaction as another opportunity to establish its presence in the perspective sector of energy, fuels and biofuels," said the group's spokesperson Peter Bencurik, adding that the group would not reveal details of the transactions. As Mr. Bencurik said, Agropodnik Jihlava has the ambition to become a key part of vertical integration of biofuels strategy of the group Slavia Capital. Another aim of the transaction is to develop commercial relations and investments.
Market Expects the Central Bank to Keep Key Interest Rates on Hold
Market analysts expect the National Bank of Slovakia (NBS) to keep key interest rates on hold at the next NBS Bank Board meeting. VUB Banka analyst Martin Lenko said that steeper than expected firming of the Slovak crown and a better outlook for the future inflation development speak for leaving interest rates unchanged. "Moreover, our new scenario counts on a downward rather than upward further movement of interest rates," stated Mr. Lenko. According to ING analyst Eduard Hagara, the stronger crown and the approval of regulated prices from next January create room for significant deceleration of inflation from next year and can help the NBS meet its inflation target, which has been set at 2 percent by the end of 2007.
FOREX MARKET: Trading with Slovak Crown was Calm on Monday
The Slovak crown entered the new working week with quiet trading. Tatra Banka dealer Milan Cavojec said that the domestic currency opened at 34.800/34.830 SKK/EUR and before the close of trading it was traded at 34.900/34.930 SKK/EUR. According to him, one should not look for anything special behind the 10-haller weakening while the market experienced a relatively calm atmosphere on Monday. "It is likely that there will not be a lot of moves on the market by the end of the year when we can rather expect profit taking and closing of positions," thinks the dealer. He does not rule out the exchange rate of the Slovak crown moving above 35.000 SKK/EUR. The strongest limit might be 34.800 SKK/EUR.
MONEY MARKET: Banks Borrowed SKK 17 Bln. from the NBS on Monday
The interbank money market opened the week in a deep liquidity deficit resulting from the outcome of last week's auction of bills of the National Bank of Slovakia (NBS). According to ING Bank dealer Martin Koska, on Monday banks borrowed in overnight refinancing from the NBS a total of SKK 17.201 billion. Banks held in their reserve accounts in the central bank only SKK 5.838 billion, meeting the reserve requirement for December on a cumulative basis to 83.33 percent. In the regular sterilization repo tender on Tuesday, banks are likely to bid less than the maturing volume of SKK 159.978 billion.
STOCK MARKET: Trading on Monday was Very Quiet
Trading on the Bratislava Stock Exchange (BCPB) started the week with a very quiet Christmas atmosphere. The official Slovak share index SAX remained unchanged from Friday at 414.75 points. The total volume of trading dropped from SKK 4.713 billion on Friday to SKK 946.731 million on Monday, of which just SKK 71,200 in share trading.