Summary of economic news released on Wednesday, September 20
Court Declares Eurofil Droty Company Bankrupt
At the end of August, Zilina District Court declared bankrupt the company Eurofil Droty, s.r.o. Nitra. Thus the court complied with a petition filed by the company itself. Robert Baran was appointed receiver of assets in bankruptcy for the company. The court invited all creditors to come forward with their claims stating their amount, legal title, and security. The court will not recognize claims not registered within 45 days of the official bankruptcy notice.
VUB has Preliminary Agreement on Buying Majority in B.O.F.
VUB Banka, a.s., has concluded a preliminary agreement on purchase of a majority stake in the leasing company B.O.F. The current B.O.F. owner is Prva Slovenska Investicna Skupina, a.s. The bank expects the transaction documents to be signed as of the end of November. VUB director general Tomas Spurny said that, on the heels of the bank shoring up its position in the consumer loan sector, it is proud to announce progress in the leasing segment as well. Neither company was willing to reveal the price of the deal.
Cabinet Approves Extra Contribution for Families' Firstborn Children
At its Wednesday meeting, the cabinet approved the draft revision to the Childbirth Contribution Law, which should increase the state's contribution for a family's firstborn child to SKK 15,460 from January 2007. The current childbirth contribution stands at SKK 4,460 per child. The revision introduces an extra SKK 11,000 payment for a family's firstborn child. The government may revise the amount of this additional payment on an annual basis as of September 1. Minister of Labor, Social Affairs, and the Family Viera Tomanova said that the additional payment should be increased regularly in line with the inflation rate.
Sony to Build LCD TV Plant in Nitra Industrial Park
On Wednesday, Sony officially confirmed its intention to build a plant to manufacture LCD TV sets in the industrial park Nitra -- North. "The company plans to invest almost EUR 73 million (approx. SKK 2.735 billion) in the plant and employ 3,000 people with 1,500 being shifted from the Sony production plant in Trnava," Sony Europe vice president Serge Foucher said following the Wednesday cabinet meeting. The new plant should launch production next September and it should run at full capacity by 2008. The planned annual-production-capacity of Sony in Nitra is 3 million TV sets. Mr. Foucher said that Sony made the decision after a detailed survey of several countries in the European Union (EU), and only Nitra met all the conditions for this step. Slovakia's biggest competitor was neighboring Hungary. Construction works on the new plant with an area of 60,000 square meters should start in late December 2006.
Autobusova Dopravna Spolocnost With SKK 22.4 Mln. Profit in 2005
Bus transport company Autobusova Dopravna Spolocnost, s.r.o., Vranov, reported a 2005 net profit of SKK 22.4 million on sales of SKK 51.3 million. Return on sales exceeded 43 percent. However, 2005 net profit dropped 20 percent y/y and sales of its own products and services fell 16 percent y/y. The company generated added value of SKK 46.7 million, down 16.5 percent y/y.
Ido Hutny Projekt Reports 2005 Drop in Revenues and Profit
Project design, engineering, trade, and consulting company Ido Hutny Projekt, a.s., Bratislava, saw its 2005 revenues from it own products and services sold drop 60 percent y/y to SKK 124.5 million. Cost of production dropped 75 percent y/y to SKK 46.7 million, and added value fell 33 percent to SKK 78.3 million. The firm's taxed profit dropped 75 percent y/y to SKK 8.5 million, according to data published in the Commercial Bulletin.
LOZ Terminates Strike Alert
The Doctors' Trade Union (LOZ) has ended its strike alert. LOZ boss Marian Kollar announced the end of the strike alert at a press conference on Wednesday. LOZ representatives met on Tuesday with Health Minister Ivan Valentovic to debate the state budget for the next year and the next steps of Prime Minister Robert Fico's government in the healthcare sector. Mr. Kollar refutes the idea that LOZ ended the strike alert only based on the government's promises. "The parliament has approved a postponement in the transformation of state healthcare facilities by one year, and we have a promise from the minister that they will not transform [the facilities] into joint-stock companies," said Mr. Kollar. Trade unionists also received a promise that their other requirements would be settled as well, e.g., an increase in medical workers' wages, improvement in the quality of health care, and a solution to extra working hours. According to Mr. Kollar, Slovakia is the last country where so-called "working stand-by" remains.
Ministry Expects Construction-Work Demand of SKK 2,200 Bln. by 2015
The Ministry of Construction and Regional Development assumes demand for construction works by 2015 of approximately SKK 2,200 billion. This information stems from the ministry's material on intentions and tendencies in the construction industry.
Court Confirms Settlement of Frucona's Tax Debt
The Kosice Regional Court once again confirmed the settlement of the tax-arrears of the spirits and spirits-based beverages producer Frucona Kosice, a.s., at the local tax office. The European Commission (EC) even criticized the write-off of the tax debt.
Seventy Heat Producers Require Increase in Heat Prices
So far 70 heat producers have asked the Regulatory Office for Network Industries (URSO) for an increase in heat prices. Regulatory Office spokesperson Miroslav Luptak told SITA that heat producers require a price increase of 7 percent on average. "For the time being, we are approving the proposals of heat producers," added Mr. Luptak. Heat producers say that increasing natural gas prices are behind their requests for higher heat prices. "Many heat producers already operate to the detriment of their own profit. They cut expenditures in maintenance, i.e., they reduce investments, which would have helped reduce costs on heat transport," the chairman of the board of directors of the Slovak Association of Heat Producers Miroslav Obsivany told SITA.
Tatra Banka Becomes Sole Owner of DDS Tatra Banka
The Tatra Banka affiliation Tatra Group Finance bought a 32.95-percent stake in the supplementary pension company Doplnkova Dochodkova Spolocnost (DSS) Tatra Banky, a.s., from Slovak crude-oil refiner Slovnaft. The transfer of shares was carried out on Monday, September 18. After having gained 1.11-percent stakes from the companies Doprastav and Smurfit Kappa Sturovo, Tatra Banka became the 100-percent owner of DDS Tatra Banky. "The reasons for the transaction with Slovnaft was the bank's interest in increasing its stake in DDS, the continual restructuring of the portfolio, and Slovnaft's focus on its core business," Tatra Banka spokesman Roman Zacka and Slovnaft spokeswoman Hana Simkova made the announcement jointly. They added that the changed ownership-relations would not influence the activities or clients of DDS Tatra Banky.
Patient's Fees in Pharmacies Cut to SKK 5
The fee a patient pays in pharmacies for a prescription will reduced SKK 15 to SKK 5 as of October. The Slovak Government decided so when it adopted on Wednesday a revision to a resolution on the fees patients pay for services linked with healthcare provision. The SKK 5 fee will be equal for all patients, i.e., also for mentally and physically challenged patients, who now pay a SKK 10 fee, i.e., the half of the ordinary fee. Out of the SKK 20 fee that pharmacies collect from patients, they retain SKK 5 and transfer the remaining SKK 15 to a health insurance company. In early September parliament canceled this division of the fee, and the whole fee now will be income for pharmacies.
MONEY MARKET in Liquidity Surplus After Repo Tender Settlement
The settlement of the National Bank of Slovakia's (NBS) repo tenders brought a great volume of liquidity on the interbank market. OTP Banka dealer Juraj Mitosinka said that SKK 122.104 billion from a two-week repo tender on Tuesday and SKK 1.73 billion from government-bond auction on Monday left the market. As much as SKK 180.159 billion from the central bank's maturing repo tender returned to sector.
Fornetti Slovakia Reports 41-Percent Increase in Output in 2005
Pastry producer Fornetti Slovakia, s.r.o., reported a 41.4 percent increase y/y in its 2005 output. Sales of its own products and services reported an even higher increase, up almost 44 percent to SKK 146.2 million. Improvement in operating results also resulted in a significant increase in the taxed profit, which soared from almost SKK 500,000 in 2004 to nearly SKK 11 million last year.
Rimo to Open Reconstructed Shopping Center in Komarno
On September 29, Rimo, s.r.o., Komarno, will open the reconstructed Komarno Shopping Center. The company invested over SKK 100 million into the reconstruction of the old Prior department store, Rieker Group real-estate manager for Central and Eastern Europe Richard Bley told SITA. Schuhfabrik Reiden AG, a member of Rieker group, is the exclusive owner of Rimo.
STOCK MARKET: SAX Share Index Gains 0.06 Points
The Bratislava Stock Exchange registered only minimal improvement on Wednesday. VUB shares pushed up the official SAX share index 0.01 percent or 0.06 points to 402.85 points. Turnover on the Bratislava Stock Exchange (BCPB) rose from SKK 347.166 million on Tuesday to SKK 1.88 billion on Wednesday on a mere SKK 103,200 in share trading.
FOREX MARKET Registers Minimal Fluctuations on Wednesday
Trading on Slovakia's foreign exchange (FOREX) market was more or less calm during Wednesday. The exchange rate of the Slovak crown against its reference currency, the euro, fluctuated in a narrow band. Tatra Banka dealer Boris Somorovsky commented that the local currency opened at 37.450/37.490 SKK/EUR. The crown's exchange rate stood at 37.410/37.460 SKK/EUR before the close of trading. The U.S. dollar was traded against the euro at 1.2690/1.2695 USD/EUR. The Slovak crown was quoted at 29.470/29.510 SKK/USD. The cross rate of the Slovak and Czech crowns was 1.3160/1.3180 SKK/CZK.
Mario Hoffmann Controls 95 Percent of Istrokapital
Mario Hoffmann has become the majority shareholder of the Slovak financial company Istrokapital. He holds directly or via other companies 95.009 percent of the voting rights related to Istrokapital shares. The financial company informed SITA that as of Tuesday that Mr. Hoffmann held as private individual a 12.823-percent stake in Istrokapital. The Slovak company JCG, a.s., held 10.13 percent, US Weylin Investment LLC sitting in Delaware had 72.035 percent, and the Cypriot Weylin Enterprise Ltd. owned a 0.021-percent share. Mr. Hoffmann is the exclusive owner of these three companies. Other private individuals and commercial entities hold 4.991 percent in Istrokapital.
Mario Hoffmann and his three companies acting in concert acquired shares of Istrokapital under a mandatory takeover bid equal to 40.511 percent of all voting rights related to Istrokapital shares. Before announcing a takeover bid, they jointly held 46.337 of the voting rights related to Istrokapital shares.
Health Insurance Companies Report H1 Incomes of SKK 37.6 Bln.
Total incomes of health insurance companies amounted to SKK 37.6 billion during the first half of 2006. Compared with the previous year they swelled by 3.65 percent or SKK 2.558 billion. Spokeswoman of the Healthcare Supervision Office (UDZS) Radoslava Miklasova further informed that all health insurers reported growth in incomes. Spolocna Zdravotna Poistovna, a.s., reported the smallest increase, 2.75 percent. Dovera insurer ended with the highest increase of 5.99 percent. But Ms. Miklasova warned that since the health insurers calculate their economic indicators on the annual basis, the above figures are not final. The health insurers reported expenditures totaling SKK 37.255 billion during the first half of 2006. Of this they spent SKK 34.883 billion on health care, an increase of 3.22 percent or SKK 2.108 billion when compared with 2005.
EC Supports Slovakia's Efforts to Get Back Stake in Transpetrol
Andris Piebalgs, the EU commissioner with special responsibility for energy, supports Slovakia in its efforts to buy back a 49 percent stake in Slovak crude oil pipeline operator Transpetrol. Mr. Piebalgs expressed his support last Friday after he met with Slovakia's Economy Minister Lubomir Jahnatek in Brussels. ''Commissioner Piebalgs expressed his support for the Slovak Government's efforts in relation to the Transpetrol company, including the objective of ensuring third party access to oil infrastructure within Slovakia", the European Commission wrote in its press release. "Slovakia plays a key role in oil transit for southern Europe and full respect of market based principles is a pre-condition for achieving the EU's Energy Policy objective of security and diversification of supplies", the press release went on to say.
Transpetrol transports Russian crude oil and provides storage of crude-oil products for its customers and material reserves state administration. In 2002, Yukos Oil company bought a 49-percent stake of Transpetrol for USD 74 million, and Slovakia kept a 51-percent majority stake.