Business

05 May 2020, 10:29 AM

STA, 4 May 2020 - With the tourism industry projected to remain shut down longer due to coronavirus than most other sectors, the Slovenian government is considering extending temporary emergency aid for tourism companies by a few months or even until the end of the year, Economy Minister Zdravko Počivalšek said on Monday.

"Tourism experienced the impact of the coronavirus crisis first and, partially due to the reliance on foreign guests, it will not be able to restart its operations until later," Počivalšek said before a newly established council for tourism, a government advisory body, convened to discuss the need for additional aid and health standards.

Specifically, the state financing of temporary layoffs, which expires at the end of May, could be extended by four months or even until the end of the year for the tourism business. Počivalšek said he would formally propose that to the government.

It would also make sense to set up a fund that would extend grants and favourable loans for the financing of current operations and investments since the industry needs to adjust to new standards.

While the current epidemiological situation is favourable and represents "an optimistic basis," Počivalšek noted that revenue in tourism was expected to contract anywhere between 25% and over 70% this year depending on the pace of the easing of measures.

Bar terraces opened today and restaurants have been allowed to serve food for take away and delivery for several weeks now. Počivalšek said "more significant steps" might follow in the second half of May or in June, for example the opening of small accommodation facilities.

Slovenia has also been in talks with Croatia on reopening the border for tourism. Počivalšek said the heads of both public health institutes would discuss protocols for border crossing this week.

The minister however warned that tourism would change permanently as a greater emphasis is placed on health. "I am confident that the tourism business and we as the competent ministry know which direction the measures should take so that we remain at the vanguard in this field."

Počivalšek noted that Slovenian tourism had already built its business model on niche experiences and active holidays, which he said would remain its foundation in the future.

The director of the National Institute of Public Health, Milan Krek, said after the session that an expert group would meet this week "to make sure that once the green light for opening is given, innkeepers, hotel owners and other workers in tourism are ready."

Gregor Jamnik, the head of the Slovenian Association of Hotels, said liquidity was essential now for hotel operators since the industry would take longer to recover and since the likely ongoing presence of the virus would require "an unprecedented change of conduct in hotels, bars and restaurants".

Podčetrtek Mayor Peter Misja, the head of the Slovenian Tourism Association, added that the standards that will be put in place should be workable. "Slovenia should not be more papal than the pope."

30 Apr 2020, 13:59 PM

STA, 30 April - It seems increasingly likely that the closure of stores, including groceries, on Sundays as a result of the coronavirus epidemic will become a permanent arrangement and be extended also to the period after the crisis. A legislative initiative to this effect, announced by the opposition Left, was backed on Thursday by PM Janez Janša.

In announcing the legislative proposal, the Left joined today the Trade Union of Shop Assistants, which argued ahead of Labour Day in favour of keeping stores closed on Sundays and bank holidays also after the epidemic.

The Left pointed out that voters had already decided in a referendum in 2003 that stores should be closed on Sundays, but were ignored later due to pressure from retailers.

Prime Minister Janša responded to the Left's tweet by tweeting "We support". Support was also expressed at the government's coronavirus briefing by Interior Minister Aleš Hojs, who said he had been an advocate of this all along. Hojs said those working in stores should be free at least one day a week and that it did not matter if consumers spent their money in six or seven days.

The Chamber of Commerce responded to the developments by arguing that the trade union and the Left should be aware one working day less would result in redundancies.

"Such a change depends on a change of the collective bargaining agreement that needs to be agreed by social partners, meaning the trade unions and employers," the chamber's president Marija Lah told the STA.

29 Apr 2020, 08:29 AM

STA, 28 April - The government is further relaxing restrictions imposed to contain the coronavirus by reopening museums, galleries and libraries and by allowing real estate agents and chimney sweepers to resume business tomorrow. As of 4 May, bars and restaurants will also be able to reopen, yet serving guests only at outdoor facilities.

Outdoor bar and restaurant facilities reopening is the first easing of restrictions for the hospitality sector, the government noted after Tuesday's correspondence session.

Given that the recommendations of the National Institute of Public Health are taken into account, all the latest exceptions to the 16 March temporary ban on the sale of goods and services allow for a minimum contact between people, the government explained its decision on the relaxation of measures.

Small businesses such as shoe repair shops, key cutters, clothing shops, photographers, photocopy services, watchmaker shops and jeweller's will also reopen on Monday.

While the government announced that hairdressers and beauty parlours will reopen on 4 May some time ago, it now also added massage and pedicure services to the list.

Excluded are however still saunas, wellness centres, piercing and tattoo shops and other similar shops where it believes Covid-19 could be contracted more easily.

People older than 65 as well as other vulnerable groups such as pregnant women and disabled will be able to do their shopping also outside the dedicated hours, that is not only between 8am and 10am. The elderly will also no longer have to present a document to prove their age.

Nevertheless, the vulnerable groups are still recommended to do their shopping during the hours which are designated especially to them.

While even shops which have remained open during the lockdown had to close on Sundays, shops selling mostly food can be open on Sunday, 3 May, between 8am and 1pm.

This is to avoid crowds just before and after the May Day holiday weekend, when shops would otherwise be closed for three full days, from Friday to Sunday.

Union calls for permanent closure of shops on Sundays

STA, 28 April 2020 - The Trade Union of Retail has called for the permanent closure of shops on Sundays. "Over this past month we have proved as a nation that Sunday shopping is not urgently needed," it said in a message circulated ahead of Labour Day.

The union says Sunday shopping was a great burden for employees and ate into the time they could otherwise spend with their families. It also distracts the families of shoppers from spending quality time together.

Several European countries have put in place limits on Sunday shopping and "their retail systems are functioning despite such restrictions."

Slovenia closed shops Sundays as part of lockdown measures that took effect in mid-March, with exemptions only for petrol stations and small independent grocery shops.

Before the pandemic, working time was almost fully liberalised and many shops were open Sundays.

28 Apr 2020, 12:14 PM

STA, 28 April 2020 - Revoz, the Renault-owned car assembly plant and by far Slovenia's largest exporter, relaunched production on Tuesday after shutting down due to the coronavirus epidemic on 17 March.

The resumption of operations will be gradual and workers will work in two shifts starting next week, the company told the STA, adding that preventive measures had been beefed up and additional protective gear had been provided for employees.

The Novo Mesto-based company relies heavily on workers from the broader region and even Croatia, and has previously indicated that the re-launch of production would hinge on the resumption of public transportation, which has been suspended nation-wide since 16 March.

It said employees would have to arrange their own transportation to work this week while efforts will be made to arrange bus transportation for those unable to do that until next week.

Revoz has a workforce of roughly 3,400 and produces the Renault Clio, Renault Twingo and Smart Forfour EQ models.

27 Apr 2020, 12:16 PM

STA, 25 April 2020 - Retailer Mercator saw its sales revenue increase by 1.8% to EUR 2.14 billion in 2019 as net profit nearly tripled to EUR 4.7 million from EUR 1.6 million in 2018. Mercator also reduced its debt.

Revenue from retail sales, Mercator's core business, increased by 2.2% to EUR 1.7 billion.

Normalised gross operating profit (EBITDA) rose by more than 60% to EUR 172.5 million.

The retail group reduced its debt by almost a quarter last year, mostly as a result of its real estate monetisation. Net financial debt by comparable standards amounted to EUR 587 million and the net debt-to-EBITDA ratio was reduced from 7.2 to 5.2.

Mercator, a Ljubljana-based group, is part of the insolvent Croatian holding Agrokor.

Its transfer to Fortenova, Agrokor's successor, has been suspended after the Slovenian Competition Protection Agency temporarily seized Mercator shares Agrokor as security for a fine.

24 Apr 2020, 12:08 PM

STA, 23 April 2020 - Environment and Spatial Planning Minister Andrej Vizjak announced on Thursday a deregulation of construction legislation that he argues will substantially speed up construction in this crucial period. "Every month of delayed investment in construction is a month lost and reduces budget revenue," he told the press.

Vizjak, who explained the proposed changes have been incorporated into the amendments of the first coronavirus crisis stimulus package, pointed to the pending recession. The changes "allow immediate launch of certain investments that are on hold now", he added.

A key segment of the proposed change envisages the integration of several construction permit procedures while ridding potential investors of the obligation to first obtain claims over the land slated for construction.

While legislation was changed in 2018 due to protracted proceedings - in particular environment-related challenges - to allow a construction permit to be obtained simultaneously with the environmental permit, this "integral procedure" would now no longer require investors to first prove their claim over the land in question.

The government argues that this condition has often been impossible to meet in more complex construction projects and that it also made no sense to try to obtain such rights before the environmental review is completed.

Moreover envisaged to be running simultaneously with the "integral procedure" and not after it is the procedure needed for investors to be allowed to override the public benefit of preserving the environment with other public benefits.

Notably, the changes would also affect projects that were subject to the environmental permit phase before the 2018 changes. All these projects would be allowed to automatically enter the integral procedure.

Another major change, which Vizjak said would for instance speed up the construction of the expressway meant to connect the Koroška region in the north with Dolenjska in the south, is a provision allowing construction to start as soon as a building permit is issued and not only after the decree is final.

"Many construction projects are on hold today because of appeals, even in cases where these appeals are unfounded and only serve as extortion," he said.

Some of the appeals have been initiated by small NGOs, which would no longer be possible with the changes, as these stipulate NGOs need to have at least 50 members to be able to challenge permits.

Appeals would also need to be filed within 15 days after a permit decree is published and all challenges would be labelled as a priority.

What is more, the government wants authorities issuing opinions in permit procedures to do so in an unambiguous fashion and without ensuing contradictions. In case the opinions are negative, they would also need to include proposals on how to make an investment feasible.

23 Apr 2020, 12:08 PM

STA, 22 April 2020 - The Chinese-owned group Hisense Europe is planning to close 2,200 jobs by the end of the year as a result of the coronavirus pandemic, including as many as 1,000 in Slovenia, TV Slovenija reported, citing a trade unionist.

According to the report, the management of household appliances maker Hisense Gorenje set its plans at a meeting featuring Chao Liu, one of the executive directors, production manager Tomaž Korošec, staffing officials and representatives of the works council, trade union and the employees' representative on the board Drago Bahun.

The management presented data on the situation resulting from the pandemic. Production in Velenje has not yet returned to full capacity after being completely suspended for three weeks.

The head of the in-house trade union Žan Zeba told the public broadcaster that Hisense was to make 1,000 people redundant in Slovenia, including 700 at the production facility in Velenje and 300 in the Ljubljana-headquartered company Hisense Europe.

Zeba said the staff were shocked by the extent of planned layoffs, noting that the company had received state aid "probably also in order not to make redundancies".

The first meeting with employees on layoffs are to be held after May day holidays.

Gorenje is to set out detailed plans about job cutbacks on Thursday.

23 Apr 2020, 11:06 AM

STA, 22 April 2020 - Slovenia's leading insurance group, Triglav, expects the coronavirus pandemic to slash its profit by at least 10% and premiums by 5% this year. It says though its business is sound enough to cope with the situation successfully.

Triglav Group had initially projected a pre-tax profit of between EUR 95 million and EUR 105 million for this year, however, new calculations show the figure could be 10-25% lower.

The insurance premiums collected, initially projected at around EUR 1.2 billion, were to be 3-5% lower as a result of the pandemic and its impact on the economy and international financial markets.

The company made the impact assessment based on the projected contraction in GDP and various scenarios of how long the stall in economic activity may last and how quick recovery once pandemic measures are relaxed. It expects gradual easing of the situation by the end of 2020.

The projected deterioration of the economic situation and the suspended activity in the manufacturing and service sectors in Slovenia and the region will impact the group's underwriting activities.

In its release with the Ljubljana Stock Exchange on Wednesday, the company estimates that primarily the written premium and claims result of the non-life insurance segment will be affected.

Motor vehicle insurance premiums are also expected to be affected by lower sales of new vehicles, deregistration of existing vehicles and lower coverage.

Slowed economic activity is to suppress life insurance premium and premium written in real property insurance, credit insurance and general liability insurance; lower demand is expected for travel insurance.

Lower net claims incurred are anticipated for some insurance classes due to reduced economic activity and movement restrictions.

Financial market shocks, particularly changes in credit spreads on government and corporate bonds, will affect not only the return on investment but also the market value of Triglav assets and liabilities and thus the capital adequacy ratio.

The decrease in the market value and thus the amount of financial assets under management will also be reflected in lower income from the management of clients' assets.

However, the insurer assesses that its insurance and investment portfolios are sufficiently resilient and that its capital position appropriate to effectively cope with increased risks arising from the Covid-19 pandemic.

The company expects it will be able to assess the impact on this year's operations with a higher degree of certainty at the end of the second quarter, on which basis it will revise the annual business plan for 2020.

21 Apr 2020, 11:12 AM

STA, 20 April 2020 - Ultralight aircraft maker Pipistrel has started developing cargo aircraft, a sort of a flying van, and a hydrogen-powered passenger shuttle, the company's CEO and founder Ivo Boscarol has said after the aviation authorities rescheduled the launch of its flying taxis.

An extended deadline for the development of flying taxis, commissioned by US ride-hailing company Uber, has enabled the Ajdovščina-based Pipistrel to start working on the planned freighter.

Meanwhile, the hydrogen-powered jet for 19 passengers would be intended mainly for transport between cities, for example from Maribor to Zagreb, said Boscarol.

"Currently, there are no such transports, only on roads. That is one of niche markets and the company has started working on its conceptual development," he told the press a few days ago.

Apart from a spacious facility, manufacturing the shuttles would require vast electricity capacities - the planes would be thus made in Italy, a more ideal setting than Ajdovščina, since all the required conditions are met there, he added.

The development of flying taxis for Uber has slowed down due to a "more conservative approach to using such aircraft" taken by international aviation authorities.

The taxis are supposed to be flying mainly above cities, which are considered a challenging ecosystem. The authorities have hence postponed using such vessels until the end of this decade.

As a result, Pipistrel has somewhat shifted its focus to developing a similar aircraft designed to transport cargo, an electricity-powered flying van that is supposed to fly above smaller cities.

Boscarol believes that the freighter will be launched prior to the Uber taxi.

Meanwhile, the company's investments in new plants in China and Italy have been brought to a standstill. The project in China saw zero activity in the past four months, with the investment estimated to be two years behind schedule.

On the other hand, the first phase of the investment in expanding manufacturing capacities at Gorizia Airport is completed, but the company has been deliberately moving slowly to see what happens with the airport.

"The airport was operating for a while, but it's closed now. We can fly in Slovenia, so we fly here now. The company is lucky to have two locations at its disposal," said Boscarol.

The plant in the making near the Slovenian-Italian border is meant to be for producing drones and bigger aircraft.

20 Apr 2020, 14:10 PM

STA, 20 April 2020 - Revoz, the Slovenian subsidiary of the French car maker Renault, continues to top the Delo list of Slovenia's largest exporters, followed by pharmaceutical companies Lek and Krka, and the household appliances maker Gorenje, the only four companies whose exports exceeded a billion euro in 2019.

Revoz recorded exports of EUR 1.77 billion, followed by Lek with EUR 1.48 billion and Krka with EUR 1.4 billion. Gorenje was at EUR 1.12 billion, shows a list published by Delo on Monday.

The top ten is rounded off by aluminium producer Impol, steel group SIJ, industrial conglomerate Kolektor, home appliances maker BSH Hišni Aparati, foundry LTH Castings and aluminium producer Talum.

Overall merchandise exports totalled EUR 33.5 billion in 2019 and trade continued to grow through February, but the coronavirus pandemic has probably already led to a sharp contraction.

Delo says the major exporters are now preoccupied with mitigating the damage, as supply chains have been interrupted and entire industries ground to a halt.

"We definitely don't expect a repeat of the results from previous years, but the survival of the company should not be jeopardised," Jani Jurkošek, the general manager of SIJ, told Delo.

Srečko Stefanič, the boss of chemical company Melamin, said that "we cannot count on a reversal of the trend ... before autumn, while the recovery and the return to what had already achieved may take a year or two."

Delo's annual list includes 110 companies that have reported their results. While the top ten are broadly unchanged, some major companies do not yet have audited results for 2019 and have therefore not been included on the list.

20 Apr 2020, 12:18 PM

STA, 17 April 2020 - Infrastructure Minister Jernej Vrtovec has approved a 50% reduction in port fees for Luka Koper, the operator of Slovenia's only seaport. Talking to the press as he visited the port on Friday, Vrtovec said that this "discount" would remain in place until September and would be extended if necessary.

The goal is to preserve the port's competitive edge in the face of the coronavirus pandemic, with CEO Dimitrij Zadel expressing satisfaction with the move. Vrtovec believes the reduction in fees will attract international shipping companies.

Zadel said that similar measures to increase the competitive edge had also been introduced at other ports and that this brought the Koper port on par with others. Vrtovec also praised the company for taking adequate precautionary measures, as none of its workers had tested positive for Covid-19.

Moreover, the ministry will also approve subsidies for railway transport in short, similar to other countries, said Vrtovec.

The minister also commented on the construction of a second rail track to the port, confirming that the ministry was looking into the possibility of folding 2TDK, a special vehicle company established for the construction and management of the new track, into Slovenske Železnice, the national railway operator.

However, a definitive answer to this will be possible only after analyses are performed and Slovenske Železnice and other key players are consulted, in about a month or two.

Vrtovec dismissed information that Hungary may join the second track project, saying no talks were taking place, but he underlined the importance of countries in the hinterland for the development of Luka Koper.

In terms of the coronavirus epidemic measures, Vrtovec would not say when public transport may be relaunched. He said however that the government may decide as early as today that vehicle inspection services reopen on Monday.

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