Summary of economic news released by SITA on Friday, July 14
Labor Office Reports Jobless Rate Down to 10.36 Percent in June
Registered jobless rate in Slovakia reached 10.53 percent at the end of June, i.e. 0.20 percentage points less than in May 2006 and 0.73 percentage points less than in June 2005, informed the National Labor, Social Affairs and Family Office on Friday. The number of job seekers able to take up a job immediately stood at 265,197 at the end of June.
Retail Chain Coop Jednota Topolcany Ended Last Year in the Black
Local retail chain Coop Jednota Topolcany ended last year in black digits. The company closed last year with a profit of SKK 1 million, while the loss in 2004 amounted to SKK 5.5 million. Revenues from goods sold grew by 2.8 percent to SKK 718.8 million in 2005. Cost of sales went up by 3.7 percent and the trade margin moderately decreased by over SKK 2 million to SKK 110.8 million. The company reported sales of own products and services at SKK 58 million.
Midyear Collection of VAT at 49.4 Percent of Annual Plan
Tax and customs offices collected and transferred to the state budget SKK 59.313 billion in value added tax (VAT) over the first six months of this year, which is 49.4 percent of the plan for the whole year. The tax and revenue service collected SKK 100.92 billion in VAT, while tax refunds amounted to SKK 67.434 billion. VAT collection by tax offices thus exceeded VAT refunds by SKK 33.486 billion in the first six months of this year, the Tax Directorate informed SITA on Friday. Customs collected and transferred to the state budget SKK 25.827 billion in VAT.
Output of U.S. Steel Kosice Grew by 10.3 Percent in 2005
U.S. Steel Kosice, s.r.o. (USSK) posted sales of own products and services at SKK 80.44 billion in 2005, which is up 10.8 percent y/y. Output amounted to SKK 82.7 billion, up by 10.3 percent y/y. Production costs grew by nearly 12 percent to SKK 55.19 billion last year. Revenues from goods sold achieved SKK 10.85 billion, while costs related to goods sold reached SKK 10.72 billion. USSK generated added value of SKK 27.64 billion last year, which is up by around SKK 2 billion.
Nay Leasing Reports 2005 Sales Over SKK 100 Mln. Up 70% on 2004
Leasing company Nay Leasing, a.s. Bratislava reported sales totaling SKK 102.4 million last year with sales of its own products and services reaching SKK 60 million. Total sales went up by over 70 percent mainly due to the sale the company's long-term assets and material amounting to SKK 42 million. The company generated added value of SKK 58.7 million, 2.3 percent up in year-on-year terms. This information was published in the Commercial Bulletin.
Slovakia Records Biggest Drop Electricity Prices for Industry in EU
Slovakia registered the highest rise in household electricity prices adjusted to its purchasing power out of all twenty-five EU member states between January 2005 and January 2006. Eurostat, the Statistical Office of the European Communities, published this information. According to the report household electricity prices, including all taxes, grew by 4.6 percent from January 2005 to January 2006 in the entire EU while industrial electricity prices excluding VAT went up by 15.5 percent.
Slovakia's FOREX Reserves Down for the Fourth Consecutive Week
Slovakia's foreign exchange (FOREX) reserves continued decreasing for the fourth consecutive week. Total reserves dropped by USD 220.5 million over the past week to USD 17.907 billion as of July 12. Reserves of commercial banks were chiefly behind the drop, going down USD 191.4 million in a week to USD 2.4406 billion. The National Bank of Slovakia's reserve assets dropped by USD 29.1 million to USD 15.4664 billion, the NBS press department informed SITA on Friday.
ZSR Launches Project Connecting Rail Network to Bratislava Airport
Slovak railway network operator Zeleznice Slovenskej Republiky (ZSR) launched a project to interconnect the TEN-T network rail corridor with Bratislava airport and the railway network in Bratislava. ZSR announced a tender to elaborate project documentation and a construction supervisor. The project documentation will link three Bratislava train stations, Bratislava airport's direct connection to the existing rail network and electrification of the rail route between Devinska Nova Ves and the Slovak-Austrian state border in Marchegg. Fifty percent of the project will be financed from TEN-T (Trans Europe Network-Transport) European Union (EU) fund and 50 percent will be covered from the national budget, ZSR representatives told SITA.
Instable Exchange Rate Can Disqualify Slovakia from Euro Adoption
Current development on the Slovak FOREX market and rapid weakening by the Slovak crown's exchange rate could mean the European Commission will not let Slovakia join the euro zone in the planned year of 2009, warn market analysts. The official exchange rate criterion says that the crown's exchange rate can only fluctuate +/- 15 percent around the central parity of 38.455 SKK/EUR, i.e. in the range from 32.70 SKK/EUR to 44.20 SKK/EUR. "However, the exchange rate must simultaneously move without any significant tension," added Slovenska Sporitelna analyst Michal Musak. This is often interpreted so that the weakening is only acceptable up to 2.25 percent from the parity, he added. This would set the weakest possible level for the crown at 39.30 SKK/EUR.
Polish PERN Interested in 49-Percent Stake in Slovak Transpetrol
Polish crude oil pipeline operator PERN Przyjazn is interested in buying a 49-percent stake in Slovak crude oil pipeline operator Transpetrol from Russian firm of Yukos. According to a member of the supervisory board of the Polish company Marcin Jastrzebski, the Polish pipeline operator has already contacted the new Slovak government in this issue, SME daily writes in its Friday's issue. Polish daily Gazeta Gieldy Parkiet writes that PERN could cooperate in the acquisition with company PKN Orlen, which might act as a financial investor in this transaction.
Construction Firm Kompleting s.r.o. With SKK 148.3 Mln. 2005 Output
Construction company Kompleting, s.r.o. Bratislava reported an 87.6-percent rise in output to SKK 148.3 million last year, while revenues from sales of company's products and services increased by 90.2 percent to SKK 138.3 million. Production costs rose by 95 percent to SKK 141.1 million and the firm generated added value of SKK 7.2 million, up 9.6 percent y/y. The company closed last year's operation with taxed profit of SKK 3.2 million, up more than one-third compared to 2004, reads data disclosed by the firm.
Agrofert Announces Mandatory Buyout Bid for THP's Shares
Agrofert Holding announced a mandatory buyout bid for shares of the Slovak poultry company THP Topolcany. Agrofert Holding had already announced an obligatory bid to takeover shares of the Zilina-based poultry company Hyza last week. The Czech group involved in the food, farm, and chemical industry will be buying out THP's shares during thirty days starting July 14 at SKK 664 a piece. The buyout will be financed from the company's own assets.
Businessmen Ask Government to Keep Flat Tax and Single VAT Rate
Slovak businessmen in the tourism trade issued a statement on Friday asking the new Slovak government to consider preserving the flat income tax, important benefits of a single VAT rate, and further measures related to efficient support of business in shaping of the new government's program statement, writes the Slovak Trade and Tourism Association (ZOCR). The association is in favor of a substantial reform of health and social contributions paid by employers as well as employees, stated the association's presidium. ZOCR also believes that introduction of a contribution bonus is an important measure to solve the problem and the association will therefore support the government in implementation of the reform, added the presidium's statement addressed to the government's top representatives.
Two Companies Confirm Bids in Third Mobile Operator Tender
So far Austrian company Mobilkom Austria and Czech firm Radiokomunikace, which submitted its bid together with Czech and Slovak private equity company Penta, have confirmed their interest and bids in a public tender for the third mobile operator for the Slovak market. Market regulator the Telecommunications Office announced the tender on May 31 and received three bids. Potential mobile operator will have to pay at least SKK 100 million for assigning or allocation of the respective GSM, UMTS and FS frequencies. The amount of one-off settlement along with the next four criteria will decide on ranking of tender participants.
MONEY MARKET: NBS Intervention Drains Liquidity from the Market
Banks had to struggle with a deep liquidity deficit on Friday, resulting from outflow of funds from direct interventions by the National Bank of Slovakia (NBS) on Wednesday using overnight refinancing loans from the central bank. Slovenska Sporitelna dealer Pavel Janosik stated that banks that used central banks refinancing facility borrowed up to SKK 51.89 billion. Commercial banks had SKK 6.18 billion in their reserve accounts in the central bank on Friday meeting the minimum requirement for July on a cumulative basis at 144.93 percent.
FOREX MARKET: Situation Calms Down, Crown Strengthens on Friday
The exchange rate of the Slovak crown against its referential currency the euro stabilized at the end of the week after the direct intervention by the National Bank of Slovakia (NBS) on Thursday, although the local currency weakened after the Friday trading opened. VUB bank dealer Ladislav Benedek stated that the Slovak currency finally improved from 38.800/38.820 SKK/EUR in the morning to 38.650/38.670 SKK/EUR. Crown's weakest point in the morning was 38.850/38.880 SKK/EUR. "The situation has settled and even some investors were interested in buying the crown," said the dealer.
STOCK MARKET: BCPB Weakens Slightly at End of Week
The Bratislava Stock Exchange (BCPB) closed this week's trading with slight losses. The value of the official SAX share index was influenced by weakening VUB bank shares and dropped 0.49 percent or 1.84 points to 374.36 points. Turnover on the Bratislava Stock Exchange increased from SKK 994.685 million on Thursday to SKK 2.227 billion on Friday with SKK 2.035 million in share trading.
Last Bidder for Third Mobile Operator could be Telefonica
Three bidders enrolled in a public tender for allocation of GSM and UMTS frequencies for the third mobile operator on the Slovak market. "A nine-member tender commission, whose members have been appointed by the Telecommunications Office's chairman, will open the bids at its first meeting on Monday," the office's spokesman Roman Vavro told SITA on Friday. Spokesperson of Mobilkom Austria, Elisabeth Mattes confirmed with SITA that the Austrian mobile operator is one of the entities interested in the license. Czech firm Radiokomunikace, which submitted its bid together with Czech and Slovak private equity company Penta, is the next bidder in the tender for the third mobile operator in Slovakia. Katarina Remiasova of Penta Investments, a.s. confirmed the information for SITA. Several sources from the telecommunications sector mention Spanish Telefonica as the third bidder; however, the company has not yet confirmed submitting a bid. However, the Spanish firm could also make a bid through investment funds.