Summary of economic news released on Tuesday, November 28
Korean Company Sewon ECS is Heading to Hnusta
Hnusta mayor Michal Bagacka informed that a South-Korean company involved in automotive industry should launch production and create 300 jobs in Hnusta by the end of this year. Slovak Investment and Trade Development Agency (SARIO) did not want to provide any information on the investment either. Beata Sihelska from the Labor Office in Rimavska Sobota informed that the investor is Sewon ECS. The company is already searching for job candidates, of whom 85 percent should be women. Sewon is one of the chief bunched cable and component producers of automotive industry and a Kia supplier. Sewon ECS Slovakia currently runs a plant in Lednicke Rovne near Puchov, where it employs about 300 people. In a short time, it plans to hire 300 more employees.
Printing House Aluprint Reported SKK 294.3 Mln. Sales for 2005
Printing company Aluprint, s.r.o. Vrutky achieved total sales of SKK 294.3 million for last year. Of this, revenues from own products and services made up SKK 231.5 million, which is up 17 percent y/y. Production costs fell by 20.2 percent to SKK 183.6 million. The company generated added value of SKK 50.5 million, which is up SKK 8.1 million in comparison with 2004. Proceeds from sale of long-term assets and material amounted to SKK 62.1 million, while the book value was SKK 53.7 million. The company closed last year with a taxed profit of SKK 859,000, while it earned a taxed profit of SKK 3.3 million in 2004.
Industrial Producer Prices in Slovakia Down 0.7 Pct. in October
Industrial producer prices in Slovakia decreased by 0.7 percent over October. Prices of products of industrial producers for the local market rose 0.1 percent from September. Their development was influenced by a 0.8-percent growth of prices of electricity, gas, steam, and heated water, unchanged prices of mineral raw materials and a 0.4-percent drop in prices of products of industrial manufacturing. Prices for export fell by 1.7 percent, the Slovak Statistics Office informed SITA on Tuesday.
Slovak Textile and Clothing Firms Post Midyear Sales of SKK 10.3 Bln.
Textile and clothing companies clustered in the Slovak Clothing and Textile Industry Association (ATOP) reported a 4.3-percent increase in sales of own output and goods to SKK 10.258 billion. The information stems from the Statistics Office data according to the Branch Classification of Economic Activities, provided to SITA by ATOP secretary general Dusan Gajdusek. The H1 result of the textile and clothing industry covers 241 companies, while it was 250 firms in H1 2005.
Cadca Heating Plant Generates 2005 Sales of SKK 123.5 Mln.
Municipal heating plant Mestska Teplarenska Spolocnost, a.s., Cadca whose line of business is to produce and distribute hot water and heat, reported sales of its products and services of SKK 123.5 million last year, which is up by 2 percent y/y. Production costs achieved SKK 93.1 million, which is up 5 percent y/y. The company generated added value of SKK 30.4 million, which is around SKK 2 million less than in 2004. The company closed last year with a taxed profit of almost SKK 10.2 million, which is nearly the same figure as in 2004.
Snacks Producer DRU Zvolen Posted 2005 Sales of SKK 165.5 Mln.
Biscuits and crackers bakery company DRU, a.s. Zvolen generated total sales of SKK 165.5 million last year. Sales of its products and services dropped by 0.8 percent y/y to SKK 143.2 million. Production costs amounted to SKK 92.5 million, down by 8.6 percent y/y. The company generated added value of SKK 51.5 million. Revenues from sale of long-term assets and material reached SKK 15.9 million. The company posted a taxed profit of SKK 4 million, while it had a loss of SKK 9 million in 2004.
Istrobanka to Float SKK 600 Mln. Mortgage-Backed Bond
Istrobanka is preparing to float an SKK 600 million issue of mortgage-backed bonds. The bank will issue 600 mortgage-backed bonds with a face value of SKK 1 million. The issue price is set at 100 percent of a face value. The security will bear a fixed coupon equaling 4.65 percent p.a. The bank will pay yields annually as of March 6. Since March 26, 2002 Istrobanka's 100-percent shareholder is Austrian Bank fur Arbeit und Wirtschaft AG Wien (BAWAG).
Slovakia's Tourism FOREX Revenues at SKK 32.958 Bln. in 3Q of 2006
Preliminary data from the National Bank of Slovakia shows the country's foreign exchange revenues from tourism were SKK 32.958 billion over the first nine months of this year: up 19.9 percent y/y. FOREX expenditures of Slovak citizens traveling abroad surged by 18.7 percent y/y to SKK 23.507 billion. The balance shows an SKK 9.451 billion surplus: up 22.8 percent y/y, according to data released by the Economy Ministry's Tourism Section.
Restructuring Helped Telemont Slovensko Reduce its Loss
Telemont Slovensko, a.s. Bratislava, a firm providing construction and assembly services for the telecommunications sector, has underwent comprehensive restructuring since October 2005. Within reconstructing measures, the company made 170 people redundant in January and February of this year. Despite of this, sales of own products and services were lower by only SKK 8 million in the first six months of this year and saving measures were reflected in a much better operating profit. Sales of its products reached SKK 185.7 million, while the loss of the company dropped from nearly SKK 9.7 million in the first half of 2005 to SKK 977,000 at the end of June of this year. Chairman of the board of directors Peter Mizik informed SITA news agency that the company has 276 employees on its payroll at present.
NBS Keeps Key Interest Rates on Hold in November Again
Key interest rates remain unchanged in Slovakia's economy also in November. At its meeting on Tuesday, the Bank Board of the National Bank of Slovakia (NBS) decided to leave key interest rates unchanged. NBS spokesman Igor Barat informed SITA news agency that the one-day sterilization repo rate remains at 3.25 percent p.a. and the one-day refinancing rate at 6.25 percent p.a. The two-week sterilization repo-rate holds at 4.75 percent p.a.
Telefonica O2 Agrees on National Roaming with Slovak Mobile Operator
The telecommunications company Telefonica O2 Slovakia that won a tender for the third mobile operator in the Slovak Republic and operator T-Mobile Slovakia have signed an agreement on Tuesday on national roaming. According to it, Telefonica O2 Slovakia will in the initial phase provide its services partially in the T-Mobile network. Director of the T-Mobile external relation division Juraj Droba said that it is another step by the new operator necessary for the launching of commercial operation. However, from the long-term viewpoint Telefonica O2 strategy is to build its own network.
Skanska Acquired Martin Based Stamart Construction Firm
The Swedish group Skanska has acquired the construction company Stamart Martin s.r.o. Skanska did not publish the price for which it acquired the firm owned by private individuals. Skanska plans to consolidate Stamart in the first quarter of next year but first regulatory authorities must approve the transaction, informed the company. Stamart Martin, s.r.o. that specializes in ground construction projects, reported a loss of almost SKK 76 million last year according to Slovak accounting standards. Its sales of products and services reached SKK 950 million.
Montex, a.s. Rovinka with 35 Percent Growth of Sales in 2005
The company Montex, a.s. Rovinka that assembles technological units reported sales of its products and services of SKK 361.1 million last year. It is an increase of 35 percent y/y. Production costs went up almost 43 percent y/y to SKK 305.6 million. The company generated added value of SKK 73.1 million, up nearly SKK 12 million y/y. Montex showed a taxed profit of SKK 14 million, up almost SKK 1 million. Also operating profit increased by more than SKK 1.5 million to SKK 20 million. However the company reported losses from financial operations of SKK 1.5 million. Montex employs 127 people.
Economic Sentiment in Slovakia is Still Improving
The economic sentiment indicator (ESI) in Slovakia slightly increased to 121.3 points in November, gaining 0.6 points over the result in October. The monthly increase resulted from improved values of the confidence indicator in the retail sector and continuing improvement in consumer confidence. Compared to November 2005, the indicator was 8.4 points higher and exceeded the long-term average by 16 points, announced the Slovak Statistics Office on Tuesday.
Whirlpool Slovakia Plans Annual Turnover of SKK 13 Bln. in 2006
White goods producer Whirlpool Slovakia, s.r.o. Bratislava, which produces automatic washing machines in its plant in Poprad, northern Slovakia, plans to achieve a turnover of SKK 13 billion this year. "The company plans to put out over 1.8 million automatic washing machines this year," said PR manager of the company Michael Szatmary. Currently the production capacity of the company is 2.2 million units. Whirlpool Slovakia employs over 1,460 people in Poprad.
Russian Company Technomed Service is Heading to Slovakia
A Russian pharmaceutical company will set up a production firm in the Kezmarok industrial zone. Kezmarok Mayor Igor Sajtlava and representatives of Euroimuno Pharmacia, s.r.o., signed a memorandum of understanding regarding the investment in the Kezmarok-Pradiaren industrial zone on Tuesday. The Russian company, Technomed Service, plans to invest EUR 15 million in Kezmarok and produce pharmaceuticals that it also manufactures in Moscow. The director of the Slovak Investment and Trade Development Agency (SARIO), Peter Hajas told SITA that the Kezmarok industrial zone suits the investor, who will manufacture products with high added value. The Kezmarok plant should export its production to Russia in the first stage. Kezmarok should serve as a starting point for the European Union (EU) markets for the Russian company.
Slovakia's Current Account Deficit at SKK 87 Bln. in August
Preliminary figures show that Slovakia's deficit on the current account of the balance of payments was SKK 86.958 billion at the end of August. The capital and financial account of the balance of payments reported a gap of SKK 16.885 billion, and the National Bank of Slovakia (NBS) registered a surplus of SKK 21.38 billion within other non-assigned items. The balance of payments ended eight months with a deficit of SKK 82.463 billion, the NBS informed SITA on Tuesday.
Slovakia's Gross Foreign Debt up to USD 29.8 Bln. in August 2006
Slovakia's gross foreign debt totaled USD 29.8 billion at the end of August 2006. Compared with July 2006, foreign debt increased USD 1.5 billion. The total gross foreign debt per capita was USD 5,536 at the end of August. Long-term foreign debt grew by USD 0.9 billion in the monitored period to USD 15.6 billion, on an increase in short-term foreign debt of USD 0.6 billion to USD 14.2 billion.
STOCK MARKET: VUB and Biotika Push up SAX Index on Tuesday
The Bratislava Stock Exchange (BCPB) moderately improved on Tuesday when shares of the VUB bank and the pharmaceutical company Biotika pushed up Slovakia's official SAX share index 0.2 percent or 0.82 points to 410.76 points. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 1.629 billion on Monday to SKK 731.7 million on Tuesday with SKK 4.4 million in share trading.
MONEY MARKET: Central Bank Accepts SKK 119.907 Bln. in Repo Tender
Bank bids in the National Bank of Slovakia's (NBS) regular two-week sterilization repo tender on Tuesday were SKK 119.907 billion. The central bank accepted them all at the single yield of 4.75 percent p.a. Commercial banks deposited SKK 6.369 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Tuesday, meeting the minimum requirement on a cumulative basis at 103.91 percent. Overnights opened trading at 3.3/3.5 percent p.a., and tom/nexts and spot/nexts were traded at 4.2/4.4 percent p.a. Tom/next and spot/nexts responded to the repo tender results, and their price fell to 3.25/3.45 percent. Two- and three-month funds were traded at 4.7/4.9 percent p.a., and six-month money at 4.75/4.95 percent p.a. The price of nine- to twelve-month deposits was 4.7/4.9 percent p.a.
Health Insurers Accuse Legislators of Avoiding Expert Discussion
The Association of Healthcare Insurance Companies (ZZP) calls on Slovakia's constitutional officials to hold a discussion of experts prior to fundamental changes in the healthcare sector. ZZP President Igor Dorcak criticized at a press conference on Tuesday that significant legislative changes are appearing in parliament in a form of proposals of deputies. "Deputies have a full right to submit proposals in parliament. Nobody doubts this," said Mr. Dorcak. Nevertheless he thinks that the lawmakers push for changes, which are not well prepared from the expert point of view and require a discussion.
FOREX MARKET: Crown Traded in a Narrow Band on Tuesday
The Slovak currency fluctuated around 35.600 SKK/EUR over the whole day and. before the close of trading, it stood at 35.610/35.650 SKK/EUR. The U.S. dollar was traded against the euro at 1.3167/1.3170 USD/EUR and the Slovak crown was quoted at 27.030 /27.080 SKK/USD. The cross rate of the Slovak and Czech crowns was 1.2700/1.2720 SKK/CZK.
INVESTING: DSS Manage Almost SKK 25 Bln. in Pension Funds
The net value of policyholders' assets in licensed pension-fund management companies in Slovakia (DSS) exceeded SKK 24.9 billion as of November 24. The value of assets in pension funds went up SKK 309.7 million compared with November 16. Almost SKK 16.4 billion was in growth funds, SKK 7.5 billion was in balanced funds, and more than SKK 1 billion was in conservative funds as of last Friday.
Central Bank did not Identify Any New Pro-inflation Factors
October did not bring any new pro-inflation factors. The Governor of the National Bank of Slovakia (NBS) Ivan Sramko said this was one of reasons why the central bank did not change key interest rates in November. Mr. Sramko further said at a press conference on Tuesday after the NBS Bank Board debated the October report stating that inflation growth slowed down compared with central bank's expectations and the central bank did not identify additional pro-growth risks of inflation. The NBS Bank Board did not even vote to change monetary policy through the interest channel because none of its members submitted a proposal for a change. Even the published flash estimate of the GDP, which with its 9.8 percent exceeded significantly also expectations of the central bank, has not brought a proposal for a change.
Ministry Says Slovakia will Surely have a New Nuclear Power Plant
Director of the Economy Ministry's energy section Marian Nanias said that Slovakia would build a new nuclear power plant also in case that Enel decides not to finish the 3rd and 4th units of the Mochovce Nuclear Power Plant (EMO). The Italian company has under control 66 percent of Slovakia's dominant power producer SE, a.s. Mr. Nanias took the floor at a discussion forum hosted by the economic daily HOSPODARSKE NOVINY. He suggested that the new plant could be built in Jaslovske Bohunice, Mochovce, or in Kecerovce in eastern Slovakia. Mr. Nanias told SITA that he has on the table seven projects to build a new nuclear power plant from various countries. He named Germany, France, and Russia among the countries interested in a nuclear project in Slovakia. Mr. Nanias, however, did not specify whether Slovakia would participate financially in such a project. He only said that there exist groups that would enter the project independently.
INVESTING: Investments Continue to Flow into Mutual Funds
Last week, investors continued to deposit money in the open-end mutual funds that members of the Slovak Association of Asset Management Companies (SASS) manage. The biggest volumes went in money market funds, where the sums of sold items exceeded the value of returned items by SKK 455.5 million. More than SKK 76.4 million flew in master funds. Guaranteed and secured funds reported net sales of SKK 45.2 million. The influx of investments was reduced mainly by bond funds with an outflow of SKK 213.6 million. Mixed funds reported negative net sales of SKK 41.1 million. Negative sales of equity funds were SKK 7.2 million. On the whole, as much as SKK 315.3 million was deposited in mutual funds last week, SASS informed.