Business

17 Sep 2019, 21:06 PM

STA, 17 September 2019 - Adria Airways has signed a new collective bargaining agreement with pilots, a move the airline says that "calms down the labour situation at the company".

The new agreement "allows management to remain focused on stability of operations and provision of services," the company said after signing the agreement on Tuesday.

The deal, valid through 2023, was signed a little over a week after a tentative deal was reached with pilots, helping the airline to avert a series of multi-day strikes that the pilots had announced for September and early October.

During that time the Trade Union of Pilots put the deal to a vote, which appears to have been successful.

Adria did not disclose the details of the deal, while Marko Kastelic, a member of the pilot union, told the STA the pilots were very satisfied with what had been achieved since work conditions would substantially improve.

Pilots had been complaining about the bad working conditions before and after the sale of this state-owned company to the German fund 4K Invest was completed in early 2016.

Since months beset by delays, flight cancellations and unannounced mergers of flights, the airline has had financial trouble for a while and is currently looking for a strategic partner.

Adding to its woes, it risks losing its operating licence due to what media reports suggest is a dismal financial state.

The Slovenian Civil Aviation Agency is expected to take a decision by the end of October. It can either decide to let things stands as they are, it may permanently or temporarily revoke its licence, or it may issue a temporary licence.

Kastelic was hopeful the airline would be able to resolve its operational and financial problems.

All our stories about the ups and downs of Adria are here

11 Sep 2019, 13:19 PM

STA, 11 September 2019 - The energy company Petrol signed cooperation contracts with Russia's T Plus Grupa and Schneider Electric at a Slovenian-Russian business meeting held in Moscow on Tuesday as part of Prime Minister Marjan Šarec's visit to the country.

Petrol will cooperate with the two Russian companies in energy efficiency. According to Petrol CEO Tomaž Berločnik, the projects will focus on optimisation of district heating.

The project with T Plus Grupa will be carried out in Izhevsk, and the other in Yekaterinburg, where Petrol will set up specialised software and provide IT support.

"Thus we will reduce energy use and optimise operative costs," Berločnik explained. According to him, the two projects are worth "a few million euro" and potentially tens of million in the future.

The business meeting, hosted by Šarec, Economy Minister Zdravko Počivalšek, Foreign Minister Miro Cerar, Labour Minister Ksenija Klampfer and Russian Digital Development Minister Konstantin Noskov, featured nine other Slovenian companies that already operate on the Russian market.

In his address, Šarec highlighted the two biggest Slovenian investors in Russia, the pharma company Krka and ICT company Iskratel.

According to Krka CEO Jože Colarič, Krka's sales in Russia will reach almost EUR 300 million this year, which is about 40% of Slovenia's total exports to the country.

Also represented at the meeting were the telecoms equipment maker Comita, air dome maker Duol, sports equipment manufacturer Elan Inventa, gas wholesaler Geoplin, industrial group Kolektor, engineering company Riko and steel group SIJ.

Šarec said that despite the EU's sanctions against Russia over the Ukrainian crisis Slovenia as en export-oriented economy was very much interested in the strengthening of economic cooperation with Russia.

He said there were many opportunities to enhance ties in high-tech and called for a joint foray into third markets.

Počivalšek echoed this call and pointed to potential for cooperation in energy, pharmaceuticals, automation and tourism, especially spas.

The economy minister noted that in 2018, bilateral trade in goods reached EUR 1.16 billion, of which EUR 790 million was Slovenia's exports and EUR 370 million imports.

In the first six months of this year, Slovenia's exports to Russia almost reached EUR 750 million. The exports are slowly approaching the 2013 level and the one billion euro milestone, Počivalšek assessed.

Currently, 38 Slovenian companies are present in Russia with total direct investments of EUR 357 million, which is 5% of Slovenia's total external investment, the minister said.

In turn, Russian companies mostly invest in the financial, metal and spa industries in Slovenia. Russian indirect investments in Slovenia top EUR 538 million.

Počivalšek called on Russian companies to increase their investment in Slovenia and take part in the final phase of privatisation of some 110 companies.

"We are striving to create a competitive environment for domestic and foreign investors and want to be green, creative and smart," the minister said.

Talking to the STA on the sidelines of the event, he rejected criticism that the strengthening of relations with Russia could have a negative impact on Slovenia's relations with its other alleys.

"Slovenia is an export-oriented economy. Out of last year's GDP, which reached EUR 46 billion, exports totalled 39 billion, which is 85%. And 80% of the exports was generated in EU markets. We're not neglecting any markets. And the Russian market is important to us," he stressed.

Slovenia's top market is the EU, the Western Balkans comes second, and China has already overtaken Russia, which is thus our fourth most important market, he added.

Cerar and Noskov, who head the intergovernmental economy commission, also addressed the participants of the business forum. Cerar stressed the importance of the "friendly atmosphere" between Slovenian and Russia, and Noskov assessed that the future of the bilateral economic relations was bright.

10 Sep 2019, 13:30 PM

STA, 10 September 2019 - The employment prospects in Slovenia in the final quarter of the year remain favourable, according to the latest employment forecast by temping agency Manpower. Seasonally-adjusted net employment forecast stands at 17%, which is one of the most optimistic forecasts in the region.

"Compared to the previous quarter, the employment prospect is slightly down - for two percentage points - but compared to the same period last year, the forecast remains level," sales manager at Manpower Gašper Kleč told the STA.

The employment prospect for the final quarter is two percentage points lower in quarterly comparison and remains level year-on-year.

The upbeat hiring prospects are a result of the strongest demand for labour in mining and quarrying, and the public sector and social services since the survey started nine years ago. They stand at +20% and +19%, respectively.

Among all ten industries included in the survey, the most notable hiring is expected in manufacturing (+22%) and construction (+21%).

The lowest chances of employment are expected in agriculture, forestry and fishing and the hospitality sector (at +13% each).

Geographically speaking, the strongest demand for workers is expected in the north-western region (+18%). "This is the second consecutive quarter with the employment forecast there since the survey started in 2011," Kleč said.

The hiring prospects are the strongest in middle-sized companies (+27%), while those for small companies are the highest on record (+21%).

But a gap between the demands of employers and expectations of job seekers remain. "This gap is usually created by the deviation from the desired skills or desired pay but also by the demographic changes," said regional head of Manpower Slovenija Aleksandar Hangimana.

The Manpower survey was conducted among 59,000 employers in 44 countries, 43 of whom report a positive hiring outlook for the fourth quarter.

Slovenia's employment prospects are preceded only by Greece's in this region, while globally, Japan, Taiwan, the US and India have the best net employment outlook. Spain, the Czech Republic, Argentina, Costa Rica and Switzerland are at the bottom of the list.

All our stories on employment in Slovenia are here

10 Sep 2019, 12:33 PM

STA, 9 September 2019 - Pharmaceutical company Lek inaugurated new development laboratories in Ljubljana on Monday in an investment valued at EUR 7.5 million. Among other drugs, they plan to develop sterile solid dosage forms to treat cancer patients.

Matjaž Tršek, the director of Lek's development centre, said that work on oncology medications had been somewhat limited, while the new investment would allow them to develop the whole portfolio of these medications.

As part of the centre's expansion "existing capacities for development of solid dosage pharmaceutical forms have been expanded, including with new analysis laboratories and expansion of in vitro/in vivo correlation study laboratories," said Luka Peternel, the head of pharmaceutical development at the centre.

Tršek added that "certain new technologies have been brought ... The number of staff has increased and there has been a substantial increase in funds for research". The number of employees at the development centre has increased by about 20% since 2015 to more than 330.

According to him, the centre will also get the first fully automated analysis laboratory. "It'll be the first such laboratory in Sandoz and even Novartis," he said, referring to Lek's parent company and division. The new lab is to be completed by the end of the year.

With the launch of the new labs, Lek is wrapping up a cycle of investment in new capacities, which enhances the Ljubljana development centre's position within the global development network: "We are the largest development centre within Sandoz even now, and this only enhances our position," said Tršek.

According to Lek, the Slovenia development centre is Sandoz's leading centre for the development of technologically advanced products for key markets of Europe, United States, Canada, Japan and emerging markets of Brazil, Russia, Mexico and China.

The Slovenia development centre, responsible for a quarter of all global development projects of Sandoz, Novartis's generic arm, has developed and launched more than 100 new products over the past four years.

The investment launch today comes after Lek decided to discontinue its EUR 150 million investment in expanding antibiotics production at its Prevalje location in the north of the country.

09 Sep 2019, 21:23 PM

Slovenia has an export-led economy, and the latest figures show that July 2019 was a record year for the nation, reaching € 3,961.9 million, up 46.3% on the July 2018. Imports rose 16.4% in the same period, up to €3,024.8 million, giving a trade surplus of €937 million, the largest in 20 years, with most of this surplus due t trade with non-EU nations.

Looking at the figures in more detail, Switzerland was Slovenia’s most important trading partner in July for both imports and exports, with the most important products being medical and pharmaceutical products.

July ended a good first seven months of the year, with Slovenia seeing a trade surplus of €945.6 million, and an export/import ratio of 104.8%.

More details on this data can be found here

09 Sep 2019, 15:06 PM

Ex-Yu Aviation reports that Alenka Bratušek, Slovenia’s Deputy Prime Minister and Minister for Infrastructure, stated on Friday that a proposed new law on aviation “would allow some forms of subsidies on certain routes. But it would be four or five destinations, not all of Adria’s flights”.

Related: Govt. Developing Contingency Plans if Adria Airways Collapses

Adria Airways has had a difficult year, with cancellations, dropped flights, and suspicions over its financial health, and the carrier currently in breach of EU regulations as it has not yet submitted its 2018 financial report to the Slovenian Civil Aviation Agency. Moreover, the Slovenian government cannot offer direct aid to Adria until 2021, as the carried received state funds in 2011 and EU rules only permit this once every ten years.

All our stories on Adria Airways are here

09 Sep 2019, 11:30 AM

STA, 6 September 2019 - Slovenia's largest banking group, NLB saw its half-year-net profit fall by 10% year-on-year to EUR 94.3 million despite higher interest and non-interest income.

Profit before impairments and provisions was up 13% to EUR 116 million, according to the interim report released by the bank on the website of the Ljubljana Stock Exchange.

Total net operating income amounted to EUR 257.4 million, a 6% increase y/y. Net interest income rose by 5% to EUR 159 million, and net non-interest revenue increased by 8% to EUR 98.3 million.

Net interest income rose in all banks of the group as a result of loan volume growth and lower interest expenses. Subsidiary banks in SE Europe continued to perform well, contributing 38.4% to the group's profit before tax.

Net loans to customers rose by 3% year-on-year to EUR 7.28 billion, while deposits went up by 7% to EUR 10.75 billion. The growth was mainly due to retail deposits.

This year saw a gradual increase in new consumer and housing loans. The share of consumer loans in all gross loans rose from 26% in the first half of 2018 to 28% in the first half of 2019.

The group's total assets rose by 5% to EUR 13.16 billion. This is attributed mainly to the continuous inflow of retail deposits.

NLB also reports having continued with the trend of improved credit portfolio quality. The proportion of non-performing loans dropped to 6%, 2.3 percentage points down compared to a year ago.

The internationally comparable non-performing exposure ratio dropped by 1.7 percentage points to 4.1% in line with the European Banking Authority guidelines, which is very close to the mid-term target of 4%.

Total capital ratio for the NLB group at the end of June reached 16.5%.

"NLB Group is on a good path toward meeting its mid-term financial targets despite the increasingly challenging economic environment of low interest rates," the bank commented on the results.

The parent bank generated EUR 122.6 million in profit, which compares to EUR 103.3 million in the first half of last year.

The macroeconomic outlook suggests the countries where the group is present are likely to post growth rates of between 3% and 4%, if supported by loose monetary conditions, fiscal easing and solid domestic demand.

"Considering these circumstances and presented risk factors, in 2019 the Group aims to achieve a single
digit % increase of revenue and pre-provision profit with continued loan growth (in line with GDP
dynamics) and stable net interest margin," reads the release.

The results were reviewed by the bank's supervisory board today.

The board also gave a green light to establishing a new leasing company, as restrictions on leasing activities ceased to apply following the bank's completed privatisation earlier this year.

09 Sep 2019, 09:59 AM

STA, 8 September 2019 - Ljubljanske Mlekarne, Slovenia's largest dairy, increased sales revenue by 0.6% last year to EUR 168.6 million, while net profit was up by 33.3% to EUR 6.7 million, according to the annual report filed with the AJPES agency for public records.

The dairy, which has been in the ownership the French Lactalis group through Croatia's Dukat since 2013, says it managed to reduce total costs by 1.4%.

While net profit was up by a third, operating profit increased by 15.9% to EUR 7.9 million.

Ljubljanske Mlekarne, which is the largest buyer and processor of raw milk in the country, is increasing the purchase of organic milk as demand outstrips supply.

For this purpose, the company made a deal last year with the Association of Organic Farmers that it will be purchasing five million litres of organic milk a year until the end of 2020.

Related: How to use the milk vending machines in Ljubljana

08 Sep 2019, 11:45 AM

STA, 8 September 2019 - Foreign companies accounted for 5.6% of all companies in Slovenia in 2017 but created over 27% of value added, roughly on a par with 2016.

These companies employed almost 26% of all workers, and allocated 39% of their expenses in Slovenia for R&D, the latest Statistics Office data shows.

A foreign company, or a foreign inward affiliate, is according to the statisticians an enterprise which is resident in Slovenia but controlled by an institutional unit outside Slovenia.

surs foreign owned firms in slovenia.JPG

Source: SURS

There were a total of 8,018 such companies in Slovenia in 2017.

A third of all value added and a third of all investments by these companies was generated by companies controlled from Germany and Austria.

The largest share of R&D spending, a third, was generated by companies controlled from Switzerland.

Together with Germany-affiliated ones, they generated almost 60% of all R&D expenditure by foreign companies in Slovenia.

More than half of the entire value added generated by foreign companies was attributable to companies in industry.

Foreign inward affiliates in Slovenia were controlled from 106 countries, but in more than 90% of the cases from Europe. Approximately half of them had their controlling company in the EU.

The majority, or almost two-thirds of them, were controlled from Italy, Serbia, Russia, Bosnia-Herzegovina, Austria, Croatia and Germany.

The Statistics Office says that economically the most important foreign affiliates were controlled from Germany, Austria and Switzerland.

More details on this data can be found here

07 Sep 2019, 09:40 AM

STA, 6 September 2019 - Slovenian carrier Adria Airways has reached an agreement with pilots that averts a series of strikes that were due to begin on Sunday and threatened to severely disrupt air traffic in Slovenia.

"Adria Airways will carry out scheduled and charter flights according to the planned flight schedule," the company said in a brief press release on Friday without revealing the details of the agreement.

Marko Kastelic, a representative of the pilots' trade union, said that the reason the strike was called off was that they adopted a draft of a new collective bargaining agreement.

The draft will now be put to a vote to the trade union's membership. "Once it is endorsed, which is what we expect will happen, we'll also cancel the other two strikes," said Kastelic.

The trade union of pilots had threatened to start striking in order to force a change of the collective bargaining agreement, which formally expired on 1 September.

The pilots sought to improve what they said were "unbearable working conditions", urging the management to "stop violating the existent collective bargaining agreement".

Adria pilots complained about the bad working conditions before and after the sale of this state-owned company to the German fund 4K Invest was completed in early 2016.

Since months beset by delays, flight cancellations and unannounced mergers of flights, the airline has had financial trouble for a while and is currently looking for a strategic partner.

Despite its problems, Adria accounts for roughly half the traffic at the Jože Pučnik International Airport in Ljubljana.

Related: Adria Airways’ difficult 2019

06 Sep 2019, 13:24 PM

2019 has been quite a year for Adria Airways. In January in seemed that the carrier had overcome it’s financial problems, at least to the extent it was allowed to keep operating. In February it announced cuts to its summer schedule, and got a new owner. In April a deal with Sukhoi Civil Aircraft Company, which would have seen the Russian company become a strategic partner of Adria, fell through, while in July there was talk of the carrier actually collapsing – after days of cancelled, delayed, and merged flights – with the government announcing contingency plans if this came to pass. The same week saw suspicions raised over Adria Airway’s upcoming financial report, followed a few days later by a claim from managers that the problems at the airline were now being addressed. More recently, pilots at Adria Airways have announced a set of three 3-day strikes, with the first due to start 8 September (2019).

The latest piece of bad news is that Adria had to cancel flights to and from Vienna last night because it was due to be met by a lawyer for the FairPlane compensation claims company, and there was a risk that the aircraft would be seized over an unpaid debt. The €250 debt is in relation to a compensation claim that a court ruled Adria must pay an Austrian passenger on a cancelled charter flight in September 2017, which was due to fly from Cephalonia (Greece) to Graz.

In a press release, FairPlane, acting on behalf of the passenger, stated:

The deadline for the payment expired on Thursday September 5, 2019 so at 19.00 CEST, an executor, police and a lawyer were present at the gate at Vienna Airport. Usually, in such cases, sales from on board duty free, as well as other property belonging to the airline found immediately on site is seized. If nothing can be held or there is resistance from the crew, the executor can impound the aircraft.

According to reports in the Slovenian media, after cancelling last night’s flight Adria transported the passengers between the Slovenian and Austrian capitals by bus. While it remains unclear as to whether Adria has paid the €250 it owes the passenger, this morning the carrier did operate a flight to Vienna.

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