Economic news released by SITA on Friday, September 29
New Printing Machine to Boost Slovenska Grafia Turnover by 30 %
On Thursday printing house Slovenska Grafia completed trial operation of its new printing machine. The 72-page rotary offset printing machine was put into normal operation on Friday, September 29. The company expects that the SKK 500 million printing machine will produce goods worth SKK 150 million by end of the current year. "From the beginning of 2007 the round-the-clock operation should be gradually launched with an aim of achieving it in March," said company director general Martin Ilavsky.
Slovenske Aerolinie Served 85,100 Passengers in H1
Slovak air carrier Slovenske Aerolinie, a.s., served 85,100 passengers during H1 2006, a 33 percent increase y/y. The company also increased the number of flights 60 percent to 766 flights. Slovenske Aerolinie transported 29,400 people on scheduled flights to Brussels and Moscow, and more than 55,700 people used its 444 charter flights. The number of passengers on scheduled flights rose 50 percent when charter flights reported a 26-percent jump.
Miklos Slams Cabinet-Approved Tax Changes
Ex-Minister of Finance and opposition Slovak Democratic and Christian Union (SDKU) deputy chairman Ivan Miklos insists that changes that the cabinet approved on Thursday are ridiculous compared with the pre-election pledges of the coalition leader SMER-SD. The approved measures are here to hide the fact that the new government simply is not able to meet pre-election pledges. More, Mr. Miklos thinks that the bad news is that the adopted measures have deformed the tax system in Slovakia. Moreover, they not provide a solution to the problem of how to find the missing billions and become a part of the Euro-zone in 2009.
ZSSK Slovensko Railway Estimates End-year Losses at SKK 890 Mln.
Railway transport company Zeleznicna Spolocnost Slovensko, a.s., (ZSSK Slovensko), could close this year with losses of SKK 890 million, according to the Transport Ministry. The losses were calculated on output in public interest of SKK 4.6 billion. The planned loss is SKK 100 million lower than projected. The company's total costs should climb to SKK 9.2 million this year.
Slovnaft Starts to Sell Biodiesel in Slovakia on Monday
Slovak crude-oil refiner Slovnaft will start selling biodiesel in all its petrol stations as of Monday, October 2. It will contain a bio-additive, methylester from rapeseed oil (MERO), in up to 5 percent of the content. "Thus, the refinery will fulfill the plan of the Slovak Government in the National Program for Implementation of Biofuels, according to which the share of bio-additives in fuels used for transportation should be 2 percent of the energy content in 2006," said Slovnaft spokesperson Hana Simkova. The refinery plans to increase this share to 5.75 percent in 2010 and also meet requirements of the European Union in this field. Slovnaft plans to introduce a 95-octane petrol with a bio-additive on the local market in late autumn 2006.
Istrokapital Wants to Transform by End of Year
The Istrokapital financial group wants to transform into a supra-national holding like Societas Europaea (SE) in line with the community law of the European Union. Istrokapital's majority owner and the head of the board of directors Mario Hoffmann said that SE Istrokapital should be launched by the end of the current year through the transformation of the current joint-stock company Istrokapital. Istrokapital director general Jozef Salaj added that SE Istrokapital would not carry out any real business activities, administering assets instead. "In the future, individual companies of Istrokapital should operate in various countries under the control of SE Istrokapital," Mr. Hoffmann said explaining the future structure.
SSE Power Distributor Asks Market Regulator for 12.9% Price Growth
Central Slovakia's regional power distributor, Stredoslovenska Energetika, a.s., (SSE), asked the Regulatory Office for Network Industries (URSO) for a 12.9-percent growth in electricity prices for households from next year. SSE was the last power distributor to submit such a proposal to the market regulator. "The price of base electricity that SSE purchases from dominant power producer Slovenske Elektrarne (SE) is mostly behind the price increase, SSE spokesperson Radoslava Gbelska told SITA.
Istrokapital Plans to Keep Postova Banka Stake
The Istrokapital financial group wants to keep its majority stake in Postova Banka, a.s. Istrokapital majority owner Mario Hoffmann has reported that several subjects have shown interest in the bank. "But our intention is not to sell the stake," said Mr. Hoffmann, adding that Istrokapital wants to operate in Postova Banka in the long-term. It wants to increase quality of services as well as profit for shareholders. "Apart from this we operate in Postova Banka together with Slovenska Konsolidacna, a.s.," said Mr. Hoffmann. Istrokapital director general Jozef Salaj said that Postova Banka has ambitious goals, which the current management has been fulfilling. Postova Banka should further grow.
Mochovce NPP Boosts Eight-Month Electricity Output 9% y/y
Two units of the Mochovce nuclear power plant (EMO), operated by power producer Slovenske Elektrarne (SE), generated 4,481 GWh of electricity in the first eight months 2006. This is a 9-percent increase y/y. Since the launch of operations, EMO has generated 43,300 GWh of electricity, according to information published by the company.
Kia Supplier Sewon ECS Wants to Invest in Rimavska Sobota
Supplier for Kia carmaker, the South-Korean company Sewon ECS, is interested in investing in Rimavska Sobota. Rimavska Sobota Mayor Stefan Cifrus confirmed for SITA negotiations with one of the chief bunched cable and component producers of automotive industry and a Kia supplier. "Representatives of the South-Korean firm visited us and they were interested in establishing a production plant on the area of 10,000 square meters in empty halls of a Rimavska Sobota canned food producer where the German company Draxlmaier planned to launch production. Draxlmaier decided to shift the planned investment from Rimavska Sobota to Romania," said Mr. Cifrus. He stressed that if the South-Koreans decide open production in Rimavska Sobota, the town is ready to provide them any assistance.
Health Minister Satisfied with the Hike in Health Insurance Premiums
Health Minister Ivan Valentovic is satisfied with the increase in health-insurance premiums the state pays for its policyholders (pensioners, children, women on maternity leave, etc.) for the first four months of 2007. He will submit to the government proposals for rationalization measures, of which the aim is to save money in the healthcare sector. He believes that if he manages to persuade the government, the state will continue to pay increased premiums also after April 2007. "I regard this as logical and fair because until now efforts to stabilize the system have failed," said Mr. Valentovic when evaluating the Thursday decision of the cabinet to increase the state monthly premiums by one percentage point to five percent of the average monthly wage. This will bring an additional SKK 2 billion into the healthcare system. Mr. Valentovic wants to use the funds for wage increase for medical workers. He added that he had to submit to the cabinet documents clearly showing that the sector lacks money even after the rationalization measures. "We have to bring the government a report showing that health care is not a black hole," he said.
Slovakia's FOREX Reserves Up This Week
Slovakia's foreign exchange (FOREX) reserves reported a growth of USD 131.9 million over the past week to USD 16.4852 billion as of September 27. Both reserves of the National Bank of Slovakia (NBS) and commercial banks were behind the growth. Reserve assets of commercial banks increased USD 63 million in a week to USD 3.2566 billion, and the FOREX reserves of the central bank went up USD 68.9 million to USD 13.2287 billion, the NBS press department informed SITA on Friday.
FOREX MARKET: Crown Firms on Friday
The Slovak crown firmed towards the euro at the close of the week. It opened the session at 37.380/400 SKK/EUR. Shortly before the close of the trading day, however, it found itself at 37.350/370 SKK/EUR. VUB banking house dealer Ladislav Benedek said that the situation on the market and trading itself both were flat on Friday. Lackluster trading was the result of regional influences when the situation calmed down on the Polish market following the previous stormy days. Mr. Benedek thinks that the local currency could firm over next week, but it actually depends on the region. If the situation in Poland remains calm, the Slovak crown could attack the level of 37.200 SKK/EUR. The upper ceiling for next week's trading could be 37.500 SKK/EUR.
MONEY MARKET: Banks Met September Reserve Requirement at 100.2%
Commercial banks deposited SKK 8.947 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Friday, meeting the minimum requirement for September on a cumulative basis at 100.2 percent. UniBanka dealer Jozef Hempfinger commented that the banks borrowed SKK 3.756 billion in the NBS one-day refinancing transactions because a liquidity deficit persists on the money market. The central bank set the October minimum-reserve requirement at SKK 21.934 billion. Thus, the banks met the new requirement at 40.79 percent as of Sunday.
STOCK MARKET: SAX Index Lost 1.81 Points at End of Week
The Bratislava Stock Exchange (BCPB) reported losses at the end of the week. The value of the official SAX share index fell 0.44 percent or 1.81 points to 406.5 points. Decreasing share prices of the power engineering company SES Tlmace and VUB Banka were behind this weakening. Turnover on the BCPB dropped moderately from SKK 695.8 million on Thursday to SKK 671.1 million on Friday, with SKK 875,900 in share trading.
Lovinit Risks Bankruptcy and Dismissal of 440 Employees
Producer of heat-resistant construction materials for metallurgic facilities Lovinit, a.s., Lovinobana, is risking bankruptcy and the dismissal of all its 440 employees. Director general Miroslav Kovac stated that the company filed a bankruptcy petition at the regional court on Thursday. Part of the company's employees had to go on a two-week vacation on Friday. However, Mr. Kovac did not rule out that they would only come back to receive a notice. "We've limited production because we were forced to reduce our gas consumption. We also have to deal with a lack of materials because we do not have money to pay for them," Mr. Kovac stated.
Slovak Firms to Get Investment Stimuli in Future
The government is preparing revisions to laws that would simplify state support for local business entities and for regions that suffer from high unemployment. After the new laws are adopted, Economy Minister Lubomir Jahnatek sees a real chance for the Spisska Nova Ves region to acquire more significant investment aid. "The firm Embraco is eminently interested in extending its production, which attests to the fact that there are good conditions there," Mr. Jahnatek said during his visit to Embraco Slovakia in Spisska Nova Ves on Friday.
URSO Decided on Gas-Price Increase From November 1, 2006
Gas prices for households will go up 4.26 percent on average from November 1, 2006. The Regulatory Office for Network Industries (URSO) decided this on Friday. URSO spokesman Miroslav Luptak told SITA News Agency that gas prices for households would grow SKK 0.89 (without VAT) in every tariff. Thus, the price will rise from SKK 12.40 per cubic meter to SKK 12.90 on the average. URSO Chairman Karol Dvorak explained that growth in global Brent crude-oil prices caused the rise in Slovakia's gas prices. However, gas prices not only for households, but also for low-scale consumers will rise.