04 Jun 2019, 09:57 AM

STA, 3 June 2019 - Economy Minister Zdravko Počivalšek and Bavarian Minister of Economic Affairs, Regional Development and Energy and Hubert Aiwanger highlighted industry 4.0 and digitalisation as potential fields of closer future cooperation as Počivalšek started a two-day visit to Germany on Monday.

Počivalšek also pointed to the continuing cooperation in the auto industry and the need for the EU to become the leader in autonomous vehicles using AI, saying Slovenian companies can provide the know-how, experience and technology in this field too.

He and Aiwanger agreed Slovenia and Bavaria should strengthen cooperation when it comes to vehicles powered by alternative energy sources as well.

Počivalšek highlighted Slovenia's advantages as an investment destination and Aiwanger proposed a visit by Bavarian delegation to focus on digitalisation, high tech, transport and logistics.

Tourism as a potential field of cooperation through investment was noted too, while Počivalšek also pointed to the possibility of conference and other business events in Slovenia and invited German tourism companies to attend Conventa, the exhibition for convention tourism in SE Europe, and the Natour Alpe-Adria tourism and leisure fair.

On Tuesday, Počivalšek will take part in the biennial Transport Logistic fair. In 2017, more than 2,100 exhibitors from 62 countries and regions took part in the fair, attracting over 60,000 visitors from 123 countries and regions. The 2017 exhibition hall covered an area of 115,000 m2.

The number of exhibitors from China is expected to double to 64 at this year's fair.

According to the Economy Ministry, 19 Slovenian companies will present themselves at the trade fair under the auspices of the investment promotion agency Spirit, including the intermodal operator Adria Kombi, logistics company Intereuropa and port operator Luka Koper.

Germany is Slovenia's most important economic partner - the countries recorded a EUR 13.5 billion trade exchange in 2018. Slovenia's exports exceeded imports by more than EUR 1 billion. Germany is also one of the leading investors in Slovenia.

Bavaria is particularly important as a trade partner since it is listed as the third among all German federal states in terms of the trade exchange with Slovenia - Slovenia's exchange with Bavaria amounts to 19% of all the exchange between Slovenia and Germany.

02 Jun 2019, 23:35 PM

STA, 31 May 2019 - An internal audit of the controversial sale of land by the state-owned bad bank to Swiss Lonstroff for an elastomer plant in Logatec has found that the bad bank had not suffered financial damage in the deal, while some employees did commit several violations.

The Bank Asset Management Company (BAMC), whose management has been overhauled in the meantime, announced in a press release on Friday that its commission for legal evaluation of responsibility had found that BAMC had not suffered damage in the deal, which was first reported on by the media in September 2018.

The bad bank added that "in different phases of the deal, BAMC employees did commit several violations of their working obligations, as they failed to respect internal BAMC acts, but these did not affect the result of the sale".

The media reported at the time that BAMC had sold a 51,000 m2 plot in Logatec, on which Lonstroff, the Swiss subsidiary of the Japanese multinational Sumitomo Rubber Industries, was building its plant, to realtor Svet Re for about EUR 40 per square metre.

Just days later, Svet Re sold a 33,000 m2 plot to Lonstroff for EUR 90 per m2, making EUR 1m in net profit in the process, and using the proceeds to pay BAMC. The bad bank sold the remainder of the plot just months later to logistics company Hoedelmayr at EUR 40 per m2.

Regarding the damage liability of the employees, the commission said that their acts related to the price of the land plot and the sale procedure had been carried out in line with the internal rules of BAMC.

The entire plot was sold to the companies Svet Re and Hoedlmayr at EUR 40 per square metre, which was a price higher than estimated in an internal appraisal, the bad bank added.

"Even if the employees in question had carried out the sale procedure completely in line with the binding rules, it is not possible to conclude that the property would have been either appraised or sold at a higher price."

BAMC added that penalties against the employees could only be carried out if there were signs of a criminal act, which had not been established in the case.

In the audit, the commission took into account the recommendations and forensic audit made by the consultancy Ernest & Young, interviews with employees and several legal opinions.

BAMC said that the procedure had resulted in "changes to acts regulating internal processes in BAMC which will help prevent similar violations from happening. A majority of the changes are already being implemented".

The media reports were soon followed by a visit by criminal police officers at the BAMC headquarters, while the Ljubljana police conducted several house searches a month ago.

The newspaper Delo reported at the time that Lonstroff Slovenia boss Peter Weber was being suspected of defrauding his company of EUR 1.7m in relation to the deal.

BAMC noted today that the president of the management board and all three executive directors had been replaced in the meantime. "BAMC will continue to cooperate with the authorities investigating the case," the release adds.

02 Jun 2019, 23:35 PM

STA, 31 May 2019 - The group around the Zreče-based tool maker Unior posted a new profit of EUR 6.8 million in the first quarter of the year, up 18.4% over the same period in 2018. Its revenue increased by 8% to EUR 68.2 million.


Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 14% to EUR 11.3 million.

Meanwhile, the group's operating profit (EBIT) reached EUR 7.4 million, up 13.8%, according to the unaudited first-quarter report released on Friday.

The group's investments in infrastructure and equipment totalled EUR 5 million in the three-month period.

At the end of March, the group had a workforce of 3,160, a drop of 0.5 over a year ago, and the parent company had 1,820 employees.

Revenue of the parent company increased by 5.5% to EUR 44.3 million, with net profit reaching EUR 1.6 million, a rise of 46.8%.

The parent company's operating profit (EBIT) rose by 33.6% to EUR 2.3 million.

The supervisory board discussed the results on Thursday, assessing them in line with plans. The group also reduced its debt to banks by EUR 2.9 million from a year ago.

Related: Unior Forged Metals & Toolmaker Marks 100 Yrs of Work (Feature)

01 Jun 2019, 14:13 PM

STA, 31 May - Mercator, Slovenia's largest retailer, posted a group net loss of EUR 3.7 million for the first quarter of 2019 compared to a net profit of EUR 1.9 million for the same period last year, as sales declined by 3.1% to just under EUR 500 million, according to preliminary results released on Friday.

Group operating profit (EBIT) rose 5.6% to EUR 9.6 million, with normalised profit before interest, tax, depreciation and amortisation (EBITDA) up 75% to EUR 39.7 million.

The core Slovenian company saw net profit rising marginally to EUR 4.8 million on sales that topped EUR 281 million, an increase of less than a million euro from the same period last year.

How to Get a Mercator Pika Card

Mercator said the year-on-year results were not entirely comparable as a new international accounting standard came into effect on 1 January affecting how rents are booked.

The sales decline is also partially attributed to the Easter shopping season falling into March last year and April this year, and stiffer competition in Serbia, which accounts for about a third of overall sales.

The release comes a day after Mercator revealed it had signed an EUR 80 million agreement with VTB bank of Russia to refinance its super senior loan facility, seen as paving the way for the next phase of financial restructuring.

Owned by bankrupt Croatian conglomerate Agrokor, Mercator is officially still part of the Agrokor group but is slated for transfer to Fortenova Grupa onto which healthy Agrokor assets have been shifted.

The company said today that the transfer is conditional on approval by Mercator's creditor banks, approval by competent anti-trust institutions, and successfully completed takeover bid for the shares of the core company Poslovni sistem Mercator.

Net financial expenditure almost doubled to EUR 11.55 million at the level of the group, increasing by 15.7% to EUR 4.95 million at the core company.

The group's debt-to-equity ratio as of December 2018 stood at 1:2.08. The report notes that through financial restructuring in recent years the group improved the composition of financial liabilities by maturity.

Slovenia remains the most important market, while the strongest growth in revenue was posted in Bosnia-Herzegovina, mainly as a result of stabilisation and establishment of partner relationships with the suppliers, and transfer of best practice from Mercator's other markets.

Mercator finalised the sale of ten shopping centres in Slovenia and some other smaller divestments, divesting a total of EUR 122.8 million in the first quarter of the year. Most went toward meeting financial liabilities.

Nearly EUR 3.5 million was reinvested in fixed assets. In all markets, a total of five new retail units were leased, comprising 3,000 gross square metres of new store space.

Mercator has also launched a process to collect bids for project documentation development for the construction of a new logistics and distribution hub in Ljubljana. The building designer is to be chosen by the end of June.

The new logistics and distribution centre is expected to reduce the costs of logistics, and improve efficiency, profitability and business processes.

The group employed 20,242 people at the end of March, 1.9% fewer than a year ago.

Keep up with business news in Slovenia here, and follow the daily headlines here

31 May 2019, 15:22 PM

STA, 31 May 2019 - Slovenia's economy continues strong with the latest data showing that the GDP expanded at an annual rate of 3.2% in real terms in the first quarter of the year and by as much as 3.7% when adjusted for season and working days.

Although growth in real terms slowed down from the 4.1% recorded in the previous quarter, seasonally adjusted rate of growth ran slightly above the 3.6% recorded in the final quarter of 2018.

Seasonally adjusted quarter-on-quarter growth was 0.8%, data from the Statistics Office (SURS) show.

Contrary to expectations by analysts, the slowdown was not provoked by external demand as the growth of exports gathered pace compared to the previous two quarters, but rather by a slowdown in domestic expenditure.

Domestic expenditure grew by 1.8% year-on-year in the first quarter, the lowest rate of growth in at least three years, with the biggest impact coming from a 1.3% decline in gross capital formation, SURS official Romana Korenič told reporters in Ljubljana on Friday.

Changes in inventories had a markedly negative impact on GDP growth, as much as 2.1 percentage points.

Gross fixed capital formation increased by 9.3%, which is on a par with the previous quarters. Construction investment expanded by as much as 18.1% but investment in machinery and equipment slowed down to 4%.

Businesses reduced inventories by 2.1%, the reason for which is not clear yet. Korenič said a potential reason could be a drop in orders, although business sentiment data or export growth do not suggest that.

Domestic expenditure was thus fuelled only by final consumption expenditure, which grew by 2.9%, a somewhat higher rate than in the previous three quarters.

Driven mainly by an increase in public sector pay at the beginning of the year, government final consumption rose by 3.6%, whereas household consumption increased by 2.6%, however Korenič said that the latter contributed more to the final consumption growth than government spending.

The statisticians noted a slowdown in household expenditure for durable goods, in particular cars. However, daily purchases of goods such as food, beverages, fuel and some types of services increased.

After a somewhat lower growth of exports in the third and fourth quarters of last year (5.4% and 6.8%), exports expanded by 7.6% year-on-year in the first quarter.

Imports increased at a slower pace (6.4%), which resulted in high external trade surplus. This time it contributed 1.6 percentage points to GDP growth.

Employment keeps increasing but with signs of a moderation. The number of people in work in the first quarter rose by 2.6% year-on-year to 1,026,547.

Half of the new jobs were created in manufacturing and construction, with livelier hiring also observed in transport, trade, and professional, scientific and technical activities.

Running at 3.2%, growth in real terms was the slowest since the final quarter of 2016 when it ran at 3%.

31 May 2019, 10:40 AM

STA, 30 May 2019 - The government has taken a key step towards the creation of a state-owned tourism holding by confirming on Thursday an investment document facilitating the transfer of several tourism companies onto a special company.

The confirmed investment document allows the Bank Assets Management Company (BAMC) to incorporate a special purpose vehicle onto which shares of Istrabenz Turizem, owner of six coastal hotels, will be transferred.

This company will form the basis of the State Hospitality Fund, which is "key to the continued consolidation of Slovenian tourism," the government said.

The State Hospitality Fund will be created to pool together the assets of several partially or wholly state-owned tourism firms that are individually weak but will have significantly better investment potential when merged.

Once the firms are consolidated, they will be sold in what Economy Minister Zdravko Počivalšek has described as "reasonable privatisation".

The State Hospitality Fund will feature assets of Istrabenz Tourizem, Sava Turizem, Hoteli Bernardin, Adria Turistično podjetje, Hit, Thermana, Unitour and Terme Olimia spanning hotels, spas, campsites and ski resorts.

30 May 2019, 16:04 PM

Ascent Resources recently signed a contract to by a mobile compressor unit for use at its Petišovci gas field, reports the website Oil Field Technology, with the unit set to be installed in the fourth quarter of this year. The technology will enable the British company to restimulate at least two of its wells, thus increasing production, with it’s use at other well in the field also a possibility.

Other stories about Ascent Resources can be found here.

29 May 2019, 10:36 AM

STA, 28 May 2019 - Slovenia remains level in the latest World Competitiveness Rankings, retaining 37th place among 63 countries after climbing six places last year. While it made gains in business efficiency, government efficiency and development of infrastructure, it fell behind in economic efficiency.

Slovenia slipped four places in economic efficiency to rank 33rd, while gaining seven spots in business efficiency (40th), one spot in infrastructure (27th) and three spots in government efficiency (39th).

"Slovenia's overall ranking is solid," said Sanja Uršič of the Institute of Economic Research, which partners with the Swiss-based International Institute for Management Development (IMD) in compiling the index.

But as researcher Peter Stanovnik pointed out, several challenges remain, among them an insufficient scope of investments, tax restructuring and health reform. He also pointed to innovation, staffing and productivity as areas that need to be tackled.

On the other hand, Slovenia performs well in measures such as exports, price competitiveness and education.

Stanovnik said investments had improved, but not enough. "Investments are essential for gains in productivity, which is still 20% behind the European average."

The government efficiency indicator improved due to progress in public finances and legislation governing business, while fiscal policy and the social framework held it back.

The improvement of business efficiency was driven be higher productivity, better management practices and values. The situation on the labour market deteriorated. "This is probably due to changes of the minimum wage act, which employers feel will not achieve their intended purpose," said Mateja Denovšek of the Ljubljana Faculty of Economics.

Gains in infrastructure are the result of higher marks for technological infrastructure and education.

"The overall estimate of Slovenia's attraction is based on a well trained workforce, high education levels and reliable infrastructure," according to Drnovšek.

Singapore tops the IMD rankings, followed by Hong Kong and the US. Statistical indicators account for two-thirds of the grades and survey-based indicators provide one-third of the final estimate; in Slovenia 100 managers responded to the survey.

The full rankings can be seen here

28 May 2019, 13:24 PM

STA, 27 May 2019 - Impol, a leading Slovenian aluminium producer, has recently entered a deal to supply German car producer BMW with aluminium rods for the bodyworks of new electric and plug-in hybrid vehicles.


The deal, worth EUR 40 million, will make the Slovenska Bistrica-based group BMW's direct supplier for at least five years, the Slovenian company has told the STA.

To meet the demand, Impol will build a new production facility spanning 3,000 square metres in Slovenska Bistrica.

The company is now seeking to obtain a building permit and plans to launch construction work in the second half of the year.

The investment is estimated at almost EUR 6.5 million, of which almost EUR 4 million will be spent on new equipment.

Production is meanwhile expected to be launched at the end of 2020 or at the beginning of 2021.

Impol will be the only supplier of aluminium rods for BMW's new electric SUV which is expected to hit the market in 2021.

The company will have to employ several dozen new workers (in production, logistics and quality control) and is hoping to further expand the cooperation with BMW.

Earlier this month, it launched a new production line for the automotive industry at its Croatian location in Šibenik.

Impol makes a wide range of aluminium products, from rods and tubes to sheets, slugs, strips and cast aluminium. Its products are used in the automotive, construction, food&beverage and energy industries.

Last year the group, which sells its products to 50 different countries, generated EUR 728 million in sales abroad, of which EUR 614 million in EU countries.

Its most important market is Germany, accounting for almost a third of its sales abroad. The company plans a 9% rise in sales revenue generated abroad for 2019.

22 May 2019, 11:48 AM

STA, 21 May 2019 - The favourable economic situation in Slovenia reflected in the domestic capital market last year, with total market capitalisation of the financial instruments listed on the Ljubljana Stock Exchange (LJSE) increasing by more than 12% compared to 2017, according to a report by the Securities Market Agency (ATVP).


The ATVP noted in the report, published on Tuesday, that total market capitalisation of the financial instruments listed on the LJSE stood at EUR 33.37 billion at the end of the year.

The bulk of this were bonds (EUR 27.02 billion), while total market capitalisation of all shares combined was EUR 6.35 billion.

The report adds that the volume of transactions had meanwhile dropped by 2.91% to EUR 337.32 million. The value of the SBI TOP blue chip index was also down somewhat, by 0.18% to 805.06 points.

The number of securities listed in Ljubljana continued to drop last year, also due to takeovers, whose number was unusually high in 2018, with the agency recording a total of 15 successful and completed acquisitions.

The number of securities on the LJSE stood at 41 at the end of the year, including two new ones - shares of the NLB bank and bonds of power producer Gen-I.

Related: Slovenian Blue Chips – the most liquid stocks on the market

Seven shares and one bond were delisted from the LJSE last year, including the stock of the household appliances maker Gorenje, which was acquired last spring by China's Hisense, which bought out small shareholders in the autumn.

Issuers are withdrawing from the market, for example after ownership consolidation, while new ones rarely decide to enter the Slovenian capital market, the ATVP commented in the report.

In order to raise awareness of Slovenian issuers about the importance of the capital market, the agency said it had implemented last year a pilot programme of support for listing of small and medium-sized enterprises.

Last year, investors could pick among 100 mutual funds in Slovenia, which were managed by six asset management firms, one fewer than in 2017, as the consolidation of the market in this field continued, the agency said.

Their combined assets amounted to EUR 2.48 billion at the end of last year, EUR 187 million less than at the end of 2017. The ATVP attributes this largely to the negative trends at international stock exchanges at the end of 2018.

The agency noted regretfully that the share of securities of domestic issuers in the portfolios of mutual funds had continued to drop last year.

Follow the business news in Slovenia here

22 May 2019, 11:46 AM

STA, 21 May 219 - The Organisation for Economic Co-operation and Development (OECD) has downgraded its forecast for Slovenia's gross domestic product (GDP) growth for this year by 0.2 percentage points to 3.4%, while upgrading the 2020 forecast by 0.4 points to 3.1%.

In the forecast published on Tuesday, the OECD said that Slovenia's economic growth remained strong, being powered by the solid domestic consumption.

Domestic consumption is supported by the improving situation on the labour market, growth of wages in real terms and a high consumer confidence rate.

The EU structural funds, the companies' needs for additional production capacities and favourable financing conditions are maintaining a strong investment growth, while exports are slowing down due to lower demand.

The OECD expects that private consumption will increase this year by 3% (3.1% in 2020), state investments by 2.2% (1.9% in 2020), companies' investments in fixed assets by 8% (7.2% in 2020), exports by 5.8% (7% in 2020) and imports by 5.2% (5.9% in 2020).

Employment continues to grow, with hiring of foreign workforce also being on the increase, the OECD said, adding that the shortage of workforce was nevertheless the highest in the last ten years.

The Paris-based organisation noted that Slovenia's fiscal policy for this year was expansive, while that for 2020 was neutral, adding that Slovenia should make its fiscal policy stricter to keep inflation pressure in check and ensure fiscal sustainability.

Measures such as restricting early retirement and facilitating privatisation would contribute to mobilising labour resources which are not fully utilised at the moment, and make labour force available to fast-growing industries, the OECD added.

It said it expected economic growth in Slovenia to slow down in 2019-2020, adding that the higher domestic demand and growth of investments would be covered with higher imports.

Given the weaker demand from abroad and higher labour costs, the growth of exports will slow down, while the employment rate will drop below the natural rate, which is expected to facilitate wage growth and increase inflation.

Slovenia's economic growth could be higher than projected if households save less and increase consumption, or lower than projected if companies fail to increase their production capacities to the expected level.

This could result in a drop in their competitiveness and lower exports, the OECD said, adding that economic growth in Slovenia could also be negatively affected by a possible strong real estate market correction.

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