Business

29 Jul 2019, 17:33 PM

STA, 29 July 2019 - The Competition Protection Agency (AVK) has given a nod to the merger of Dnevnik and Večer, the publishers of the second and third largest daily newspapers in the country, respectively.

The AVK said on Monday it had established that the merger was in line with the competition rules. The content of the decision is yet to be published, while the managements of both publishers have already received it.

The clearance was first reported by the public broadcaster Radio Slovenija, which said the joint company would have a 40% share on the printed media market, which is believed to have been the reason why the deliberations of the AVK on the case took a whole year.

The approval of the Culture Ministry was already issued last December.

Maribor-based Večer, controlled by the no. 1 publisher Delo until 2014 when it was sold to entrepreneurs Uroš Hakl and Sašo Todorovič due to anti-trust concerns, has a circulation of about 19,000, while Dnevnik, owned by Bojan Petan of publisher DZS, one of 21,000.

According to some estimates, labour cost rationalisation alone will save the companies EUR 2 million. The two papers each generated around EUR 1.5 million in net profit last year.

Večer and Dnevnik are meant to continue being published as separate papers. Forces are expected to be joined when it comes to covering foreign and internal affairs as well as sports, while regional topics are to be covered separately.

Večer has traditionally had a strong subscriber base in the north-east of the country, while Dnevnik is perceived more as a central Slovenian or Ljubljana-based paper.

At least partial mergers are also expected for the subscriptions, marketing and administration department.

More about the plans and expected lay-offs will be clear once the owners comment on the AVK's decision, which has not yet been published officially.

Večer director Uroš Hakl and Dnevnik chairman Bojan Petan welcomed the decision by the AVK, labelling it as a "move which both companies perceive as necessary considering the aggravated situation on the printed media market."

Dnevnik editor-in-chief Miran Lesjak said that the merger "is certainly one of the most important decisions in the history of both newspapers."

According to Lesjak, the decision was made so that the newspapers survive. "We live in times when newspapers...which bet on quality of information, professionalism and their own credibility fight for survival," he added.

Igor Dernovšek, the president of Dnevnik journalists' trade union, told the STA that the decision was expected, adding that the trade union was assured that for now, there would be no lay-offs or pay cuts.

The Slovenian Journalists' Association (DNS) responded to the news by urging that both papers preserve their level of quality and professionalism, their separate brands, content plurality, as well as jobs.

The DNS expressed concern over the owners' limited sharing of information regarding their plans and consequences of the merger. It urged transparency, the inclusion of journalists in future steps and against only pursuing a strategy of survival and synergies, arguing this could prove fatal eventually.

"The owners must not only look at their economic interest but also at public interest - this means quality, in-depth and investigative reporting in what is in fact an increasingly barren Slovenian media landscape.

"Both of these media outlets are among the pillars of quality journalism in Slovenia, each a backbone of public opinion in their environment. Shaking them up would have irreparable consequences for the entire media and democratic environment," the DNS wrote.

The association moreover pointed out that it had launched an ongoing administrative dispute over being excluded from the Culture Ministry's deliberations on the merger.

The Association of Journalists and Commentators (ZNP) assessed that the merger will not change the balance of power on the Slovenian media market, and that it would not have a significant impact from the aspect of media plurality.

"Considering that both newspapers are...distinctively leaning to the left, their merger will not bring anything significantly new from the aspect of media plurality," said ZNP president Matevž Tomšič, who does not expect any major changes content-wise, either.

"Večer is a more regionally-oriented newspaper, which could hurt its image," he said, adding that the merger will render certain journalists and other media workers in both newspapers redundant and that they would be fired.

In addition to the DNS, the perils of the development have also been highlighted by media expert Marko Milosavljević, who particularly warned against the merging of the two paper's internal policy desks.

"This aspect definitely cuts deep into public interest and the plurality of the media landscape," Milosavljević told the STA, warning this could result in "a single person having control over reports in two key national papers".

He argued watchdogs too often only considered the economic side of things and forgot about the intellectual aspect. "This intellectual market often shrinks as a result of media mergers," the Ljubljana Faculty of Social Sciences professor said.

29 Jul 2019, 14:48 PM

STA, 29 July 2019 - The Slovenian Financial Administration (Furs) has told the STA that serious efforts have been under way to detect and sanction individuals engaged in regular crypto currency mining or trading while failing to pay taxes. It highlighted the example of a miner who had to pay EUR 100,000 in taxes after his undeclared activity was discovered.

Furs responded last year to the soaring values of popular cryptocurrencies by issuing warnings that regular crypto mining and trading can amount to a work activity that needs to registered and is subject to taxation.

Cases are evaluated on an individual basis, with key factors being the turnover value and number of transactions in a specific period.

Asked whether any undeclared miners or traders had been discovered in recent months, Furs highlighted the example of an individual who was discovered to have engaged in regular mining over an extensive period which would have required registration as an activity.

"This discovery of undeclared work led to the individual making a self-declaration and paying almost EUR 100,000 taxes," Furs explained.

It remains unclear how many people in Slovenia are engaged in the activity of mining or trading in cryptocurrencies.

Furs has various channels for obtaining information, indulging through the international exchange of data among tax administrations.

29 Jul 2019, 10:57 AM

STA, 28 July 2019 - The government has proposed a series of tax tweaks aimed at reducing labour taxation, coupled with higher taxes on capital, which would partly offset the loss of revenue. The rest is to be secured through more effective tax collection.

The Finance Ministry submitted the blueprint of the tax reform for public consultation on 22 June, and is accepting comments from stakeholders until 1 August after which it will compile draft amendments ready to be passed by the government and then by parliament.

The changes would affect laws on personal income tax, corporate income tax and on tax on profit from disposal of derivatives. This would also require changes to the tax procedure act. The bills are to hit parliamentary benches in the autumn to be fast-tracked in order to kick in on 1 January 2020.

Finance Minister Andrej Bertoncelj would like the package to be revenue neutral. "We've planned a set of soft measures with the main role to be played by the Financial Administration," the minister said in a recent interview with the magazine Reporter.

The revenue service is to produce an extra EUR 160 million through a proactive approach that would make tax collection more effective and crack down on tax evasion and fraud involving social contributions, the minister explained.

Overall, the planned cuts on labour taxation, along with the cuts on holiday allowance that have already been implemented, are projected to reduce receipts by roughly EUR 220 million annually, while additional taxes would increase receipts by an estimated EUR 87 million.

FURS has told the STA it has already drawn up measures designed to collect an additional EUR 160 million more in taxes. These include measures to increase voluntary payment of taxes such as expanding payment methods and advancing tax literacy among the young, and improving inspection procedures.

In this way they hope to collect EUR 50 million more social contributions, EUR 45 million more VAT and EUR 40 million more personal income tax. A further EUR 25 million could be gained from more aware tax payers and better oversight of how legal persons calculate and pay tax and of tax on motor vehicles.

The proposed changes include increasing general tax credit and tweaks to the income tax brackets to reduce the tax burden on the middle class. This is to be offset by higher corporate income tax and higher taxation of capital gains and of rental income.

28 Jul 2019, 15:27 PM

STA, 27 July 2019 - The value of construction works in Slovenia carried out last year amounted to EUR 2.57 billion, which is 29% more than in the year before, the Statistics Office has reported. It was the second time in a row that the value increased on the annual basis, and it was also 1% above the amount from 2010.

The works that construction companies carried out on buildings last year are valued at EUR 1.35 billion, which is 35% more than in 2017.

The value of works on engineering structures was meanwhile up by 23% to EUR 1.22 billion, show the final data from the Statistics Office.

The growth in value was the most prominent in non-residential buildings, being up by 38% to EUR 906 million.

The value of works on residential and non-residential buildings combined was up by 35% compared to 2017. It was up by 28% for the former and by 38% for the latter.

When it comes to non-residential buildings, the value of construction works was up the most in the industrial and warehouse buildings segment (up by 59% to EUR 318 million).

This segment was followed by office and administrative buildings, and by commercial and service buildings, up by 42% to EUR 165 million and by 23% to EUR 160 million, respectively.

The value of works on transport infrastructure was up by 38% to EUR 770 million.

The value was meanwhile down for works on pipelines, communication networks and electricity transmission networks (-0.3% to EUR 333 million) and for works on industrial complexed (-9% to EUR 46 million).

26 Jul 2019, 17:30 PM

STA, 26 July 2019 - Slovenia's model of temporary posting of workers to other EU countries has been subject to sharp criticism about exportation of cheap labour. The country has seen an exponential growth in such postings over the past ten years and is reportedly third in the EU by the number of posted workers.

 

The Health Insurance Institute (ZZZS), which issues forms to employers posting workers abroad, issued 17,668 such forms in 2008, 103,370 in 2014 and as many as 159,136 in 2017, but the figure fell to 127,059 last year. A worker may be posted abroad several times a year, which means several forms.

The social contributions paid by Slovenian employers for the workers sent abroad do not correspond to the actual pay they earn but to what they would if they did the same work in Slovenia. Posted workers as a rule also get extras such as allowances for separation and higher living costs, so their earnings are higher than if they performed their job in Slovenia.

The strong growth in the number of postings and deductions on social contributions paid by employers has provoked criticism from European interest associations.

The European Federation of Building and Woodworkers (EFBWW) has calculated that Slovenia posts at least 100,000 construction workers to the EU even though it has only 55,000 domestic workers in the industry. Most of them come via Slovenia from the Western Balkans.

This is why the federation submitted a request to the EU Commission at the end of May to investigate the practice and its regulation in Slovenia.

"Slovenia has built a money-spinning business model based on social fraud and worker exploitation. This is totally unacceptable and should be stopped at once," said the EFBWW president Dietmar Schäfers.

The commission has also received complaints from interest groups in Austria, while the country itself has said it will try to engage in dialogue with Slovenia before taking any such step.

Slovenian posting companies have been accused of exporting workforce to the EU at dumping prices as Slovenian labour costs are lower, which makes workers from Slovenia cheaper.

Meanwhile, the Slovenian government has acknowledged that the situation provided food for thought regarding necessary measures.

Slovenia's regulation entails that posting companies need to obtain an A1 document which allows posting temporary workers to other member states and is issued in accordance with the EU legislation by a relevant district unit of the ZZZS.

According to the Labour Ministry, a special task force is examining relevant regulations from 1970, including those governing the social contribution deductions for employers, and drawing up measures to reform them.

Responding to the criticism of the increase in the number of posted workers and worker exploitation, the Labour Ministry told the STA that the transnational provision of services act, which tightened regulations for issuing A1 documents, had been adopted last year.

The law aims to prevent cross-border posting of workers by mailbox companies or employers, particularly in construction and industry, who have already violated regulations, thus tackling worker exploitation, which has been a critical issue.

According to the Labour Inspectorate, there have been 20 violations of the act in 2018.

On the other hand, the ZZZS, which is in charge of revoking issued A1 documents, recorded more than 17,450 irregularities, including over 6,400 tax-related and over 6,300 pertaining to employment contracts.

Foreign authorities have been submitting requests about checking conditions compliance of posting companies or revoking their posting permits to the institute, which has received around 10 such requests by June this year.

According to the ZZZS, the issue is complex and hard to tackle, while Goran Lukič of the Workers' Counselling Office told the STA that the new act somewhat improved the situation even if he is still sceptical about its enforcement.

Meanwhile, Slovenian employers' associations deny the accusations of Slovenia being a kind of gateway for social dumping in Europe.

The Slovenian Employers' Association (ZDS) told the STA that given the amount of labour costs in Slovenia one could not speak about dumping, while the Chamber of Commerce and Industry (GZS) said that it was key that foreign workers who got work permits in Slovenia and ended up working in other EU countries were paying their social contributions and income tax in Slovenia.

26 Jul 2019, 10:25 AM

STA, 25 July 2019 - DARS, the national motorway company, has received five fresh bids in what is the latest chapter in the construction of Slovenia's half of the second tube of the Karavanke tunnel to Austria. Turkish builder Cengiz, already picked in a procedure last year that was subsequently quashed, is the cheapest bidder again.

Cengiz Insaat, which had promised to execute the project for EUR 89.3 million in 2018, now issued a bid worth EUR 99.6 million, DARS announced after opening the bids on Thursday.

Cengiz is followed by Greek J&P Avax with EUR 115 million, and Slovenia's Kolektor CGP, which has partnered with Slovenian engineering company Riko and Turkish company Yapi Merkezi to offer to build the tube for EUR 121 million.

The fourth lowest bid, worth EUR 121.5 million, was submitted by Implenia Österreich in partnership with Implenia Switzerland and Slovenia's CGP Novo Mesto, and the fifth, worth EUR 122.2 million by Slovenia's Gorenjska Gradbena Družba in cooperation with Czech builder Metrostav, which had been the second lowest among nine bidders in 2018.

Bosnia's Euroasfalt and its Slovenian partner Cestno Podjetje Ptujm, which had been among the six bidders invited by DARS into the new round of talks and bids, has not submitted a bid this time.

The bids are now to be examined and the procedure is continuing after the National Review Commission - which annulled the original awarding of the deal to Cengiz with the argument the Turkish company had made subsequent changes to their offer - rejected the call by Kolektor CPG, Yapi Merkezi and Riko to halt the new stage of the procedure.

While Austria is already in the midst of building its portion of the 8-kilometre tunnel, the project has been stuck in the tender stage in Slovenia since it began in 2017, having seen a number of appeals processed by DARS as well as the National Review Commission.

24 Jul 2019, 11:30 AM

STA, 24 July - Telekom Slovenije posted a net profit of EUR 19.6 million for the first half of the year, an increase of 35%, even as sales revenue declined 5% to EUR 340.6 million, the company said on Wednesday.

Group profit before income tax, depreciation and amortisation (EBITDA) rose 11% to EUR 112.3 million and pre-tax profit (EBIT) surged 41% to EUR 23.8 million.

The company said sales revenue was down due to the sale of Blicnet, which was completed in the second half of the year, and lower revenue from fixed segment of the end-user market, primarily due to the completion of the Slovenian e-tolling system in 2018.

Telekom having offloaded most of its foreign subsidiaries in recent years, leaving it only with the Kosovo operator Ipko, the bulk of the sales and profit it generated in Slovenia; Kosovo accounts for less than a tenth of group revenue.

But the interim report also shows the group's position deteriorated overall, with the number of fixed and mobile retail connections dropping by about 2% in Slovenia and Kosovo, and broadband connections down 2% in Slovenia and as much as 7% in Kosovo.

In the first quarter of the year, the latest period for which data is available, Telekom remained market leader in all major segments but it continued to lose market share.

In the key mobile telephony segment, its market share contracted by 3.4 percentage point at the annual level to 41.9%, while in fixed broadband it contracted by over a percentage point to 32.3%.

The majority state-owned company also announced today it would propose dividends of EUR 4.50 gross per share at the 30 August annual general meeting, which would mean distributing around three-quarters of the EUR 39 million in accumulated profit among shareholders.

The proposal is significantly below last year's dividend payout, but it is by no means certain to be endorsed: last year the management proposed a payout of EUR 6.30 gross per share, but Slovenian Sovereign Holding (SSH) succeeded with a counter-proposal for dividends of EUR 14.30.

23 Jul 2019, 12:52 PM

STA, 22 July 2019 - The Chinese owners of airport operator Aerodrom Maribor have put up signs to limit access to Maribor airport, which is currently managed by DRI, a state-owned company, media reported on Monday.

This is the latest twist in the story of Maribor Airport, whose management was handed over to DRI, the state-owned consulting and engineering company specialised in infrastructure projects, in early June.

The government decided for the move after the Chinese-backed Aerodrom Maribor announced in January it was invoking a six-month notice and terminating the 15-year lease agreement it signed in 2017 due to delays in a planned expansion of the airport's runway.

DRI got the operating licence last week, so the airport reopened last Friday after being closed for a day.

But today, signs saying Private Property, No Trespassing, No Parking appeared at the entrance to the parking area.

The Infrastructure Ministry told the STA that the easement in the area of Maribor airport, owned by Aerodrom Maribor, was settled in the land register and that any disputes over the matter would be settled in court.

The ministry assessed that "the Chinese owners who unilaterally pulled out of the lease agreement for no apparent reason are doing this to hinder the operations of Maribor airport and are implementing their interests at Slovenia's expense".

DRI meanwhile told the STA today the signs did not disrupt the airport's operations.

DRI is to manage the airport until the end of 2020 or until the Infrastructure Ministry finds a long-term solution.

The ministry denied in a press release last week claims that Aerodrom Maribor terminated the lease agreement due to delays in the planned expansion of the airport's runway.

It added no deadlines or any other conditions for the state had been set in the 2017 agreement.

The project entails changes to the spatial plan for the area, which is a lengthy procedure and can take several years, it noted.

The Chinese-backed firm SHS Aviation bought Aerodrom Maribor at the beginning of 2017 from Delavska Hranilnica savings bank, signing a 15-year lease agreement with the state.

It made huge announcements when it took over, but few of its plans came to fruition and the airport has been languishing, serving only a handful of charter flights and subsisting mostly on revenue from pilot training.

23 Jul 2019, 11:50 AM

STA, 22 July 2019 - The first of four run-down hotels in the Alpine valley of Bohinj bought in March by Slovenian crypto millionaire Damian Merlak opened its doors after major renovation on Monday.

Aparthotel Triglav, located in Stara Fužina on the eastern side of lake Bohinj and featuring 27 self-catering units, has a new roof, facade, floors, new kitchens, bathrooms as well as equipment. A three- to four-star hotel, it will be slightly more expensive than in the past.

Talks are meanwhile under way for the renovation of Hotel Zlatorog, a 43-room hotel located on the western side, adjacent to the lake's campsite. While the hotel has been closed since 2011 and needs the most work, Merlak's team hopes it will open again in three years.

Also slated for renovation are Hotel Bohinj, which is located east of the lake and is being leased until November, and Ski Hotel Vogel, located some 50 metres away from the ski slopes on Mount Vogel above the lake.

Meanwhile, another dilapidating closed hotel in the Bohinj area, which lies further west of the much more touristic Bled lake, is Hotel Bellevue. Also located at the eastern entry point to the lake, it has been owned since 2017 by Podjetje Pokljuka, which is connected to forestry company Gozdno Gospodarstvo Bled and the Ljubljana Archdiocese.

Aleš Kadunc of Gozdno Gospodarstvo Bled has told the STA that part of the hotel will be torn down, part of it reconstructed, while one segment is under heritage protection. Permits are being applied for and it is not yet clear if construction work can begin next year.

23 Jul 2019, 09:36 AM

STA, 21 July 2019 - Six years after it was launched as one of the first craft breweries in Slovenia, Pivovarna Pelicon has grown into a fully-fledged company with six employees that is looking to crack the million euro revenue mark.

Posting net sales of EUR 584,000 for 2018, up over a quarter on the year before, the company expects annual revenue to rise by about 30% to roughly EUR 900,000 this year, co-founder Anita Lozar told the STA. Virtually the entire profit is reinvested.

The company sells its range of craft beers in Slovenia and Italy. This summer it has decided to enter the Croatian and Danish markets.

Starting off with a single product, a pale ale, Pelicon currently offers nine types of beer and has the capacity to produce up to 250,000 litres of the hoppy beverage a year. It has also branched out from beer to produce a craft gin and a "hoppy tonic" with real quinine.

"Over these six years we've grown, seen where our shortcomings are and slowly started to tackle them. We've slowly improved our product portfolio and started bottling beer. We currently sell half the beer bottled and half on tap in pubs, which we had not been doing before," Lozar said,

About a year ago the brewery also started to work with retailers. According to Lozar, this means having to increase output, which again required production adjustments. "But these are sweet problems," she said.

22 Jul 2019, 09:09 AM

STA, 20 July 2019 - The rating agency Fitch upgraded on Friday the credit rating for Slovenia from A- to A with a stable outlook. Fitch highlighted the lowering of the public debt, the public finances surplus and the country's economic growth among the reasons, the Finance Ministry said on Saturday.

The ministry stressed that this is already the third upgrade for Slovenia by rating agencies this year, which comes to show that the country is in good shape and has been successfully consolidating its public finances.

"Following the April outlook upgrade by Moody's from stable to positive, there was S&P's credit rating upgrade from A+ to AA- in June, and yesterday Slovenia's good shape was also confirmed by Fitch," Finance Minister Andrej Bertoncelj said.

Slovenian presently has an AA- rating with a stable outlook with S&P, an A rating with a stable outlook with Fitch, and a Baa1 rating with a positive outlook with Moody's.

Slovenia has been the most effective eurozone member when it comes to the reduction of public debt and plans to decrease it to 65.4% of GDP this year. It also plans a 0.7% of GDP or EUR 193.6 million budget surplus.

Bedsides the debt reduction, budget surplus and economic growth, Fitch also highlighted good economic relations with other countries, the strengthened banking sector and reduced unemployment.

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