Economic news released by SITA on Wednesday, November 8
Construction Output Grew Slower in September
Output of Slovakia's construction industry grew 11.4 percent on a year-on-year basis to SKK 14.275 billion in September. In August the y/y growth was 21.6 percent. The development in September results from higher growth in new construction, modernization and reconstruction reporting an increase of 16.9 percent to SKK 11.478 billion. On the other hand, construction output in maintenance and repair works dropped 8.4 percent y/y to SKK 2.328 billion. Construction output abroad by Slovak companies did not reach last year's level and kept shrinking, by 5.8 percent y/y to SKK 387 million, the Slovak Statistics Office informed SITA on Wednesday.
B.O.F. Leasing Company Announced 3Q Contracts Worth SKK 3.11 Bln.
Leasing company B.O.F. a.s. made leasing contracts worth SKK 3.118 billion in acquisition prices excluding value added tax (VAT) in the first nine months of this year, up almost 25 percent y/y. In the same period of 2005 the firm concluded contracts representing SKK 2.506 billion. Marketing director Igor Duric stated that the company's nine-month results are in line with its trade plan. In the monitored period the company concluded 3,241 leasing contracts, up 177 from a year ago. The average value per contract exceeded SKK 962,000.
Petrol Prices Dropped by More Than SKK 0.20 as of November 2
As of November 2, the average retail price of 95-octane petrol decreased SKK 0.22 to SKK 36.89 per liter compared with October 20, the Slovak Statistics Office reported. The average retail price of 98-octane petrol was SKK 39.40 per liter, down SKK 0.24. The average retail price of one liter of diesel was SKK 38.27, down SKK 0.02. The average retail price of LPG dropped SKK 0.02 as well to SKK 21.73, spokeswoman for the Slovak Statistics Office Eva Kelemenova informed on Wednesday.
Segfield Stake in SES Tlmace Unchanged
A stake in the power engineering company Slovenske Energeticke Strojarne, a.s. (SES) Tlmace of the company Segfield Investments, a member of the J&T Finance Group, and the Czech company Kesek, s.r.o., as entities acting in concert has not changed during a compulsory takeover bid for all SES shares. Since the announcement of the compulsory takeover bid on October 6 until its end on November 4 the stake of both companies has not changed representing currently 73 percent in all voting rights in SES Tlmace. Within the takeover bid a total of 56,032 SES Tlmace shares were offered with a face value at SKK 200 per share, informed Segfield.
Industrial Output Growth Slows Down to 9.7 Percent y/y in September
Industrial output growth in Slovakia decelerated from 13.7 percent y/y in August to 9.7 percent y/y in September. Behind the growth was a 12.6 percent increase in industrial manufacturing. Electricity, natural gas and water production and distribution was 8.8 percent lower than a year ago, and mining and mineral extraction decreased 7.2 percent y/y, the Slovak Statistics Office informed SITA on Wednesday.
Slovak Employers Oppose EU Directive on Maximum Working Hours
The National Employers' Association (RUZ) in Slovakia disagrees with proposals that are currently being discussed at European Union institutions and concern restrictions of the maximum weekly working hours. RUZ wants Slovakia to vote against canceling the exception in the EU directive according to which selected groups of employees can work more than 48 hours weekly, if they agree to do so. "Although Slovakia is not using this exception at present, removing of the exception from the EU directive would mean that Slovakia cannot make use of this in the future," said RUZ secretary Martin Hostak. RUZ reminds that an employment contract is a contract between two parties, which are an employer and an employee. "In such contracts the state should guarantee as much freedom as possible as it is done in other fields," said Mr. Hostak. Employers believe that high flexibility of the labor market is a necessary condition for reducing unemployment, improving of the business environment, and also growth of the economy.
SkyEurope Airline Will Strive to Improve Capacity Use on its Aircraft
Slovak low-cost airline SkyEurope Airlines plans to improve its effectiveness next year and increase its flight capacity use, which is currently 75 percent. Next year the capacity use is projected at around 80 percent to 85 percent, while SkyEurope plans to transport around 3.5 million passengers. "In order to boost sales, we have to improve effectiveness in various fields, for example in the field of sales and marketing," said the new sales director of the company Karim Makhlouf. The flight capacity was utilized at 76.1 percent on average in October. SkyEurope Airlines transported 226,714 passengers in October 2006. The accuracy in arrivals and departures reached 86 percent. On November 8, the company served its 5,379,455th passenger, which should be the precise number of inhabitants of Slovakia. SkyEurope was founded in 2001. The company flies on 73 lines to 37 destinations in 19 countries.
Heineken Slovensko Reports 23.7 Pct. Output Drop for 2005
Brewery company Heineken Slovensko, a.s. Nitra reported a 23.7-percent output drop last year to SKK 2.549 billion. Sales of its products and services decreased by almost 22 percent y/y to be at SKK 2.531 billion. Production costs reached SKK 1.713 billion: down 16.5 percent y/y. The company thus generated added value of SKK 842.3 million last year, which is SKK 470.2 million less than in 2004, according to data published by the company. Heineken Slovensko brewery, exclusively held by international brewery group Heineken International, has been representing the Dutch firm in Slovakia since 1998.
Lenovo Opens its Operation Center in Bratislava
In its operation center in Bratislava that opened on Wednesday the company Lenovo employs almost 400 people. The center serves the regions of Europe, Middle East and Africa (EMEA). Milko Van Duijl, Lenovo EMEA president and senior vice president of the Lenovo Group said that when they announced the creation of the Bratislava center they employed seventy people here. He however did not specify how much the company invested in the Bratislava center. He said that Lenovo wants to further develop in Slovakia but the company will not publish concrete plans.
Government Will Reexamine Sale of Slovenske Elektrarne to Enel
The Slovak government intends to reexamine the sale of a 66-percent stake in Slovak dominant power producer Slovenske Elektrarne (SE) to Italian company Enel. Prime Minister Robert Fico informed at a press conference after the Cabinet's session on Wednesday that the government reviewed a report called Examination of Legal and Economic Relevance of the Way Slovenske Elektrarne were Privatized and Settlement of Property Relations to the Gabcikovo Hydropower Plant. "With regard to great suspicions about the sale of the power producer, the Cabinet lifted the duty of professional secrecy of employees of the Economy Ministry, Environment Ministry, the National Property Fund and the water-management system related to the contracts on the power-producer sale," Mr. Fico announced.
MONEY MARKET: Longer Deposit Prices Drop Moderately
A slight liquidity surplus remained on the interbank market after the settlement of the National Bank of Slovakia's (NBS) two-week repo tender on Wednesday. A total of SKK 173.135 billion from the NBS repo tender on Tuesday left the market, while SKK 167.437 billion from the maturing repo tender returned. Banks deposited SKK 24.86 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Wednesday and met the minimum requirement for November on a cumulative basis at 122.39 percent. One-day deposits were quoted at 3.8/4.0 percent p.a., two- to twelve-month funds were quoted at 4.7/4.9 percent p.a.
STOCK MARKET: SAX Share Moderately Firms Midweek
The Bratislava Stock Exchange (BCPB) moderately strengthened during Wednesday's trading. Slovakia's official SAX share index firmed 1.11 points or 0.28 percent due to Slovnaft and Biotika shares and its value achieved 395.81 points. Turnover on the Bratislava Stock Exchange (BCPB) however fell from SKK 46.3.billion on Tuesday to SKK 241.9 million on Wednesday with merely SKK 639,800 in share trading.
Cabinet Allocates SKK 1.6 Bln. for Christmas Bonuses to Pensioners
At their session on Wednesday, ministers determined the sum of Christmas bonuses for pensioners with pensions up to SKK 10,365. Prime Minister Robert Fico informed that nearly SKK 1.6 billion was allocated for Christmas bonuses this year. "Available resources will be used for this expenditure. Pensioners with monthly retirement pensions up to SKK 3,455 should be granted a Christmas contribution of SKK 2,000. A total of SKK 1,750 should go to pensioners with a monthly pension from SKK 3,456 up to SKK 6,910. An SKK 1,500 contribution should be granted to pensioners whose pensions range from SKK 6,911 to SKK 10,365.
FOREX MARKET: Crown Reaches New Record on Wednesday's Morning
The Slovak currency once again improved its high against the euro on Wednesday. Its exchange rate slipped just above 36.000 SKK/EUR. The local currency opened at 36.120/36.160 SKK/EUR, and reached a new record of 36.005 SKK/EUR in the morning and the exchange rate stood at 36.100/36.140 SKK/EUR before the close of trading. The U.S. dollar was traded against the euro at 1.2755/1.2760 USD/EUR. The Slovak crown was quoted at 28.290/28.350 SKK/USD. The cross rate of the Slovak and Czech crowns was 1.2875/1.2895 SKK/CZK.