Business

20 Aug 2020, 11:03 AM

STA, 20 August 2020 - As soon as the strict coronavirus measures were relaxed at the end of April the property market picked up, yet there are still fewer transactions than before the epidemic. Demand still exceeds supply, keeping average prices high, partly because of the many deals in Ljubljana, where prices are well above the national average.

"At the moment there are fewer transactions on the property market," the director and owner of real estate agency Stan Nepremičnine, Stanka Solar, told the STA.

She said this trend could be seen over the past month, so she partly attributes it to the summer season and a lack of adequate supply of used flats at good locations.

Solar said demand was strong in particular for higher-end new housing, but she believes new flats or houses are "slightly mispriced given the buyers' expectations".

"The majority of people expect a price correction for property which needs energy renovation and for more expensive new housing."

Similarly, Boris Veleski from Mreža Nepremičnin said the number of transactions was much lower after the epidemic, even though a month after it the market started to rebound.

Remax Ljubljana said that "at this moment we don't see any major changes in transactions, as demand still exceeds supply".

Urška Hočevar from this estate agent said the market is dominated by strong, motivated buyers who have a clear vision and know how they will finance the purchase.

Preliminary data by Slovenia's Surveying and Mapping Authority (GURS) for the first six months shows some 5,400 deals with flats and houses were carried out, down 35% from the same period in 2019.

However, these transactions amounted to EUR 532 million, which is 70% of all property transactions, an absolute record for a six-month period, GURS has recently said.

According to Solar, there is much demand for one- and two-room flats, but also for three-room flats, especially second-hand properties which do not require major investments.

Flats with a lift and a parking area are also in high demand.

She said there is an increasing number of buyers who have some savings and deem a piece of property the safest investment.

Mreža Nepremičnin said there is a lot of demand for smaller flats, up to 65 square metres, but also for larger ones, over 100 square metres.

Remax said cheaper flats near the city centre are in high demand.

"However, already during the epidemic we detected some more demand for houses, holiday homes and land, as many found it hard to be in a flat during lockdown," said Hočevar.

GURS data also shows the prices of used flats rose by 7% in the January-June period compared to the same period in 2019, with an average price per square metre exceeding EUR 1,900 for the first time.

Solar corroborated this, saying "the prices of used properties have increased. Demand still exceeds supply and there is currently a lack of housing at desired locations into which a new owner could move in a few months".

She said the prices of rental homes had meanwhile dropped by some 15-20% compared to before the coronacrisis.

Mreža Nepremičnin and Remax have not noticed any price drops either. Hočevar said a downward correction was possible in the long-term.

Fewer tourists from abroad have meanwhile given a headache to many owners who took out loans to buy flats for short-term rental. These loans need to be repaid regardless of the current lack of demand by tourists.

"Some of these flats have been put up for sale, but not that many, other owners have opted for medium-term rental if they could, because many hope or believe that things will soon be the same as before the epidemic," said Veleski.

Solar said many of those who had been renting through Airbnb and Booking decided to rent to students or other individuals for the long or medium term.

Hočevar said that even those owners who insisted on short-term renting this summer in Ljubljana or other tourist areas will eventually be forced to rent for the long-term or even sell.

The estate agents largely agree that the pandemic has made it hard to predict the trends in the coming months.

Solar does not expect any major price changes until the end of the year, except for housing in need of energy renovation and for relatively pricey new housing.

Veleski believes much will depend on developments outside Slovenia's borders. He thinks the existing trend will last at least until spring 2021.

All our stories on property in Slovenia

19 Aug 2020, 11:49 AM

STA, 18 August 2020 - Slovenian home appliance manufacturer Gorenje is hiring some 600 temporary workers to cope with a record number of orders. Orders until the end of the year are by more than 30% higher for each month than last year, while a 15-20% increase is also expected for early 2021, the company told the STA on Tuesday.

Since 10 August, Gorenje has already hired 240 workers on a fixed-term contract, and is looking for another 350, to be employed by 1 September.

Some of the new workers will be hired until the end of October, but the majority until the end of the year, said the company, which is part of the Chinese group Hisense.

"While a rise in orders is typical of this time of year due to the seasonal nature of production, we have an absolute record number of orders for this period now."

When the coronavirus pandemic hit this spring, Gorenje's new owners were planning massive layoffs.

Orders for August to October then rose significantly and June was the first profitable month this year.

The changed situation prompted the Hisense Gorenje management to resort to soft methods to improve efficiency in production at Gorenje.

Due to the pandemic, Gorenje has introduced a number of measures to boost sales, cut costs and increase production efficiency.

19 Aug 2020, 11:40 AM

STA, 18 August 2020 - Slovenia's leading insurance group, Triglav, has reported EUR 33.5 million in net profit for the first half of 2020, a 3% decrease year-on-year. The group posted a total of EUR 673.4 million in consolidated gross written premium, up 7% compared to the same period in 2019, said insurer Zavarovalnica Triglav on Tuesday.

The group's net revenue earned from insurance premiums increased by 7% to EUR 523.1 million. The group generated EUR 40.6 million in profit before tax, 3% down year-on-year.

Net underwriting expenses amounted to EUR 338.3 million, up 2% compared to the first half of 2019. Average premium growth was meanwhile 4% in Slovenia and 8% in markets abroad. Growth was recorded in all three insurance segments; 17% increase in health insurance, 6% in non-life insurance and 3% in life and pension insurance.

"In the first half of the year, premium income recorded growth, whereas the generated profit was adversely affected by the deteriorating situation in global financial markets and partly by major CAT and other one-off events. The pandemic has radically changed the way we do business and we have adapted effectively to this situation," said chairman Andrej Slapar as quoted in the unaudited report.

Profit before tax from underwriting activities amounted to EUR 34.6 million, 3% up year-on-year, and the part earned from financial investments totalled EUR 5.3 million, a decrease of 17% year-on-year.

"Broken down by insurance segment, 85% of total profit (vs. 89% last year) was generated by the non-life insurance segment. In addition to good results from premium income, it was influenced by lower rates of return on investment and the creation of additional provisions."

The pandemic and its financial ramifications prompted a lower return on Triglav's investment portfolio worth EUR 3.3 billion. "Its value decreased by 5% in the first quarter of 2020, and at the end of the second quarter it returned to approximately the same value as at the end of 2019."

The volume of assets under management in the group's mutual funds decreased by 4% to EUR 979.4 million compared to the 2019 year-end, while discretionary mandate assets stayed roughly level at EUR 82.5 million.

Meanwhile, the consolidated gross written premium of Zavarovalnica Triglav grew by 4% to EUR 399.9 million and net revenue from premiums increased by 2% to EUR 283.2 million.

Profit before tax was down by 4% to EUR 31.6 million and net profit decreased by 4% as well to EUR 26.4 million. Net underwriting expenses were up by 3% to EUR 187.8 million.

Owing to the precarious situation in the financial markets, triggered by the pandemic, the group cannot make any sure projections on profit figures at the end of the year. According to Slapar, the profit before tax was planned between EUR 95 million and 105 million and based on the April assessment the annual profit before tax will likely decline by 10-25% compared to the planned figures.

The annual written premium and the combined ratio of the group are meanwhile forecast to be within the planned figures - around EUR 1.2 billion and below 95%, respectively.

Zavarovalnica Triglav supervisors also appointed Andrej Andoljšek chief supervisor today.

14 Aug 2020, 12:51 PM

STA, 14 August 2020 - Speaking about a potential second nuclear reactor in Krško, Infrastructure Ministry State Secretary Blaž Košorok has told the STA that Slovenia is and will remain a nuclear country. Košorok, who is convinced Slovenia will need the reactor, called for a fact-based debate as opposed to politicking and appeals to emotions.

While the government recently placed a new nuclear reactor in Krško on the list of strategic projects for post-coronacrisis recovery, Košorok said this did not mean a final decision on the project had been made.

"We are talking about some kind of guidelines, but fact is that Slovenia is and will remain a nuclear country. We've been living with this for more than 40 years and will probably continue living with it," said Košorok.

The official, who described nuclear energy as a safe, reliable and long-term source of power, stressed that the 20-year extension of the life-span of what is currently Slovenia's sole nuclear reactor needs to be secured again first after a recent Administrative Court decision that entails a reinstalling of the original 40-year span ending in 2023.

Košorok is confident that the Environment Agency, which needs to okay the extension through an environmental impact assessment, has enough awareness about the importance of nuclear energy for Slovenia.

He stressed that securing the needed facilities for the storage of nuclear waste was a pre-condition for any decision. The investor, state-owned power utility Gen Energija, which manages Slovenia's half of the Krško nuclear power station, will have to be convicting with a serious investment plan and zoning procedures need to start.

Košorok added the investor will have to convince the asset manager, meaning the Slovenia Sovereign Holding, and key stakeholders, with the plan being that a decision on a second reactor be adopted until 2027 approximately.

Broad social consensus will be needed for a new reactor, especially in light of social and economic development, he added. He said some opposition is expected and normal while urging against politicking and for expertise-based debates.

He spoke of a fairly safe situation, pointing to the recent strong earthquake in nearby Zagreb that had no noteworthy effect on the Krško nuclear power plant whatsoever.

Košorok said it was too soon to speak about any technical details. There are a few interested parties, among them Westinghouse, which also built the existing reactor. Concrete decisions will be taken by experts, he added.

Interest in participation in the project was recently also expressed by Croatia, which co-owns the Krško nuclear power plant and has been cooperating with Slovenia in its management.

"There are ups and downs with any contract, a marriage is also a contract-based relationship that has good and bad moments. And I feel the good moments prevailed here," the official commented, welcoming Croatia's initiative while adding this was just one possible scenario.

The project has also drawn attention in other neighbouring countries, including Austria as a country traditionally opposed to nuclear energy. Talks were conducted as the life-span of the current reactor was being extended and Košorok said there had been "no dramatic opposition".

Meanwhile, the official also reflected on other potential energy projects in the country, highlighting the untapped potential in the Central Sava Valley, which he said could accommodate 10 hydro power plants. He said zoning and spatial planing should start immediately.

He moreover lamented the slow progress it the use of wind energy, saying Slovenia was unfortunately at the very tail end in this respect in the EU.

Košorok has a long track record in the energy industry. He headed the state-owned power utility HSE between 2012 and 2016, having before that spent seven years at the helm of the Ljubljana co-generation plant TE-TOL.

More on nuclear power and Slovenia

13 Aug 2020, 17:05 PM

STA, 13 August 2020 - The relevant national inspection service has carried out a total of 139 building permit checks for buildings under construction this year to find out in the 70 cases that have been closed that 25 of them have no adequate permits or do not meet the required conditions.

Out of these 25, twenty buildings were being built illegally, three did not meet the required conditions and two facilities posed a risk, the Construction, Surveying and Housing Inspection Service said in a press release on Thursday.

The inspections were carried out between February and July and a total of 70 cases were closed by 4 August.

For the 20 illegally build buildings, the inspection has ordered that construction be suspended and set deadlines for their removal.

A ban on the use of the dangerous buildings has been issued, as well as orders for their removal, while for the buildings that do not meet the required conditions decrees ordering the investors to eliminate the deficiencies have been issued.

"We are still noticing that the share of detected illegal builds during targeted regular inspections on the ground (without reports or initiatives) is extremely high," the inspection service said, adding that compared to the previous years the situation has not improved.

13 Aug 2020, 11:40 AM

STA, 13 August 2020 - Foreign direct investment in Slovenia increased by EUR 552 million in the first half of 2020, a significantly slower rate of increase than in the same period last year, when inbound investment rose by almost EUR 639 million. In the 12 months until the end of June, FDI was up EUR 725.7 million.

According to data released by Banka Slovenije on Thursday, EUR 370.7 million of the increase in the first half of 2020 was accounted for by reinvested profit, EUR 116.7 million by an increase in debt instruments and EUR 64.5 million by equity.

Domestic direct investment abroad meanwhile rose by EUR 222.7 million in the first six months, after it was up EUR 67.4 million in the same period last year. The net decrease in direct investment in the first six months was thus EUR 329.2 million.

Gross foreign debt stood at EUR 48.1 billion in June, a EUR 4.4 billion increase on a year ago. Debt increased the most for the state, by EUR 3.7 billion, and the central bank, by EUR 1.3 billion, while other sectors reduced debt by EUR 0.9 billion.

Net foreign debt amounted to EUR 300 million, a EUR 2.3 billion decrease, the state being the only net debtor in June with a debt of EUR 19.1 billion.

The current account surplus stood at EUR 1.4 billion in the first six months, down EUR 106 million on the same period last year.

The surplus in the trade of goods increased by EUR 236 million to EUR 1.085 billion. Exports decreased by 13.5% and imports by 15.7%. The surplus in the trade of services was down by EUR 400 million to EUR 933 million - the central bank attributes this to issues with travel due to the coronacrisis.

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11 Aug 2020, 10:45 AM

STA, 10 August 2020 - The supervisors of Slovenske Železnice have confirmed a revised business report for 2019, which shows the railways operator recorded a net profit of EUR 35 million, and appointed Aleksander Mervar the new chief supervisor.

Slovenske Železnice generated EUR 601 million in revenue in 2019, EBITDA amounted to EUR 87 million, EBIT to EUR 42 million and net profit to EUR 35 million, shows the updated report, discussed by the supervisors last Friday.   

Meanwhile, Mervar, the chairman of state-owned power utility Eles, was appointed chief supervisor by the nine-strong board, which started its term in September last year. The board had initially appointed Bojan Branko chief supervisor, but Branko passed away in June to be temporarily replaced by Aleksander Nagode.

The supervisory board also features Adam Vengušt, Igor Janez Zajec, Tanja Bolte, Silvo Berdajs, Zlatko Ratej and Jože Pavšek.

Slovenske Železnice moreover said on Monday that the group had adjusted its business plan for 2020 in the face of the coronacrisis.

The company, which will face around EUR 30 million in severance costs due to a planned reduction of its workforce from 7,200 to 6,200 by the end of the year, expects an operating profit of EUR 5.5 million.

10 Aug 2020, 11:53 AM

STA, 10 August 2020 - Pivovarna Laško Union, Slovenia's largest brewery, last year generated EUR 156.5 million in net sales revenue, up 2.2% year-on-year, on the back of higher sales in the domestic market. Net profit was meanwhile up by 20% to EUR 24.4 million, shows the annual report published on Monday.

The share of net sales revenue generated in foreign markets in total net sales revenue was 26%, while compared to 2018, the volume sales of beer in the Slovenian market were up by half a percent.

Pivovarna Laško Union's sales in foreign markets last year were up by 4.8% year-on-year, with the growth attributed to higher sales to companies in the Heineken Group, which has been the owner of the Slovenian brewery since 2016.

Director general Zooullis Mina says in the report that the coronavirus epidemic has significantly impacted the company's operations.

The closure of bars, restaurants, hotels and other establishments was followed by an almost 100% drop in sales in the hotel, restaurant and catering industries.

On the other hand, the company, which at the end of 2019 employed 585 workers, recorded no significant drop in sales to shops.

07 Aug 2020, 17:13 PM

STA, 7 August 2020 - Preliminary data by the Surveying and Mapping Authority indicate about a 40% drop in both the number of deals and turnover in real estate in the first half of 2020. Prices of used flats meanwhile continued to grow, by 3% compared to the second half of 2019, taking the average square metre price in the country above EUR 1,900 for the first time.

The latest stats on Slovenia and coronavirus are here

The data, released on Friday, show 10,800 transactions were registered in the first six months in a total value of EUR 770 million. This is a 40% drop for both figures compared on the second half of 2019 and a 40% and 45% decline respectively year-on-year.

The Surveying and Mapping Authority said that in the face of an almost complete market freeze during the lockdown, it decided to publish the preliminary data even though a fair part of deals for the first six months had not yet been registered and processed for proper market analysis. Final data will be released in October.

The body estimates that the actual year-on-year decline in the number of deals and in turnover will be between 35% and 40%. It pointed out that 2019 had seen record figures, mostly due to an unusually high number of deals involving commercial real estate.

As for the continuing rise in the prices of used flats - by 3% on the second half of 2019 and by 7% year-on-year - the Surveying and Mapping Authority noted a similar phenomenon had been seen in 2008.

"In such circumstances it is only the better and fairly expensive flats that continue to get sold and their prices are not decreasing yet due to market inertia," the experts wrote, while pointing out that the market picked up again in May as the epidemic was declared over.

Housing property accounted for almost 70% of total turnover in the first half of the year, up significantly on previous years and even above the 66% recorded in 2015. Between January and 15 July, 5,450 transactions were recorded, a 37% decrease on the second half of 2019 and 36% year-on-year. Turnover for new flats was down by more than 70%.

The number of recorded transactions with land suitable for construction on the other hand fell by only a third compared to the first and second half of 2019, while the number of deals involving farm and forest land decreased by about half.

All our news on real estate in Slovenia

06 Aug 2020, 13:07 PM

STA, 6 August 2020 - The Slovenian subsidiary of the Italian banking group Unicredit saw its consolidated profit plunge to EUR 1 million in the first half of 2020 compared to EUR 16 million in the same period last year.

Pre-tax profit for Unicredit Banka Slovenija and its leasing arm Unicredit Leasing in the first half was meanwhile down by 94.8%, from EUR 20 million to EUR 1 million, shows a report released on Thursday.

Net operating profit decreased 83.6% to EUR 4 million, and operating profit was down from 19 million to 11 million (-41.9%).

While operating revenue was down almost 22% to EUR 33 million, operating costs were down only 5.1% to EUR 21 million, with payroll costs decreasing by 4% to EUR 12 million.

Net interest revenue was up slightly to EUR 23 million, but net fees and commissions were down by 15.3% to EUR 11 million.

The bank saw a 2.2% drop in customers loans in the first half of the year to EUR 1.9 billion, while deposits by customers were up by 3.7% to EUR 2.08 billion.

06 Aug 2020, 11:44 AM

STA, 5 August 2020 - The registered jobless total in Slovenia stood at 89,397 at the end of July, which is almost unchanged compared to June but due to unemployment growth in April and May the figure is 24.4% above that from July 2019, show data released by the Employment Service on Wednesday.

There were 84,717 persons registered as unemployed on average in the first seven months of the year, 12.2% more than in the same period last year.

The number of newly registered unemployed persons was 8,222 in July, up by 8.2% on June and by 32.4% in the year-on-year comparison.

Among the newly registered, 4,042 had seen their fixed term contracts expire, 490 were first time job seekers, 127 became unemployed because of receivership and 2,221 were long-term redundancies.

The new number of newly registered redundant persons was up by 0.9% compared to June and by 197.3% year on year.

Of the 8,202 persons that were removed from the unemployment registry, jobs were found by 6,487, a 95.7% increase year-on-year.

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