Business

15 Jul 2020, 09:49 AM

STA, 14 July 2020 - Home appliances maker Hisense Gorenje will not lay off production workers as initially planned. The company will instead employ soft methods to reduce the workforce, since orders have grown in recent weeks and June was the first profitable month this year.

The latest previous plan was to lay off roughly 300 workers in the production unit Gorenje in the town of Velenje, the group having already let go of 46 employees at the back-office unit Hisense Gorenje Europe in June.

Initially, as many as 830 people were to be laid off in Slovenia.

"Due to the altered operating circumstances, the management of Hisense Gorenje has decided to employ soft methods to improve work efficiency at the production company Gorenje," reads a statement issued on Tuesday.

The increased orders are "good news for the company and its employees" and a result of measures taken to improve operations and adjust to the consequences of the coronavirus pandemic, which has included changing business models, accelerating online sales and cutting costs.

These measures will continue given the unprecedented uncertainty and instability on the market, the company said, confident that the positive trends will continue in the months to come.

The in-house trade union expressed satisfaction today that the management decided to follow its recommendations. Its head Žan Zeba expressed hope that the company would now focus on goals it had set for itself and start showing results "that will benefit all stakeholders".

10 Jul 2020, 12:06 PM

STA, 10 July 2020 - Slovenia's exports decreased by 6% to EUR 13.2 billion in first five months of the year, while imports fell by 11.5% to EUR 12.5 billion, show Statistics Office data released on Friday. In May, exports were down by 19.8% year-on-year to EUR 2.38 billion and imports by 22.4% to EUR 2.21 billion for an export to import ratio of 107.8%.

Slovenia recorded an external trade surplus in all of the first five months of 2020, the surplus in all five months combined amounting to EUR 726.9 million. In this period, the export to import ratio was 105.8%.

As for May, the office noted that the year-on-year decrease was smaller than in April, when exports were down 28.8% year-on-year and imports by 41.2%.

It said the negative effect of the epidemic on external trade in goods had been reduced somewhat, while adding the significant annual decline in April was also due to exceptionally high value of imports in April last year.

In May the export to import ratio was 107.8%; a surplus of EUR 172.1 million was generated in external trade in goods. The May external trade surplus is the second highest this year and the highest of the four May surpluses recorded after 2010.

Exports to EU member states in May amounted to EUR 1.53 billion (down 29.0% year-on-year) and imports to EUR 1.51 billion (30.7% less).

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"Trade with this group of countries grew continuously from October 2016 until the second half of last year, when the effects of economic cooling began to show. The epidemic negatively affected trade with the EU already in March 2020 and even more in April and May," the Statistics Office wrote.

As for trade with countries outside the EU, Slovenia exported goods worth EUR 848 million in May (up 4.5% y/y) and imported goods worth EUR 693.9 million (up 5.0%).

"Since the end of 2018, we have been recording high growth rates of trade with this group of countries, the trend continued in May, however the growth was significantly reduced by the epidemic."

More on this data can be found here

10 Jul 2020, 10:19 AM

STA, 9 July 2020 - Krka Group sales revenue grew by 6% year on year to EUR 803.8 million in the first half of the year, according to preliminary estimates. Net profit of the pharmaceutical group grew by 15% to EUR 160.3 million, Krka said on Thursday.

Sales of products and services were the highest in east Europe, standing at EUR 271.7 million, up 8% from the first six months in 2019.

Russia, which is Krka's largest individual market, added EUR 180.2 million to the total sales, which is also 8% more than a year ago.

Most other markets in east Europe and central Asia also recorded growth.

In Central Europe, where the group generates 22.8% of sales, sales were up by 8% to EUR 182.7 million. Western Europe follows with EUR 181.6 million, up 7% from the same period last year.

In SE Europe, where 12.9% of total sales are generated, it topped EUR 103.5 million.

Meanwhile, a 15% drop was recorded on the Slovenian market, where sales reached EUR 38.3 million.

The group attributes the drop to a 46% drop in the sales of health and tourism services because of the Covid-19 pandemic. The Slovenian market accounts for 4.8% of total sales.

Krka sold EUR 24 million worth of products overseas, which is 2% less than in the same period last year.

In the January-June period, Krka sold EUR 753.2 million worth of products, of which EUR 691.7 million came from prescription drugs and EUR 61.5 million from over-the-counter drugs. The sale of the former increased by 8% and of the later decreased by 2%.

Earnings before interest and taxes (EBIT) reached EUR 216.7 million, a 40% year-on-year increase, while earnings before income tax, depreciation and amortisation (EBITDA) were up by 30% to EUR 273 million.

Krka registered four new products in the first six months of the year, three prescription drugs and one over-the-counter drug.

The group, which employed 11,658 people at the end of June or 12,751 if agency workers are included, estimates investments in the first six months at EUR 30 million.

The preliminary data was presented by CEO Jože Colarič at today's annual shareholders meeting. Krka also said in a press release published on the web site of the Ljubljana Stock Exchange that this year sales were expected to reach EUR 1.52 billion, while net profit should top EUR 210 million.

The group plans to allocate EUR 134 million for investment, and spend 10% of sales revenue for R&D.

Krka also announced a dividend of EUR 4.25 gross per share this year, EUR 1.05 more than in 2019.

08 Jul 2020, 12:12 PM

STA, 8 July 2020 - Banka Slovenije has pointed out that the government's corona-crisis stimulus measures are having a marked effect on the labour market and that employment and wage statistics could deteriorate significantly once they are lifted. The central bank added that a deterioration on the labour market was also heralded by surveys conducted among companies.

Banka Slovenije's latest quarterly report, released on Wednesday, also says Slovenia suffered a strong decline in GDP in April, the prospects for the second half of the year are, however, more favourable.

The central bank pointed to a survey by the Statistics Office, which suggests demand will increase substantially in the third quarter, while it simultaneously projected a deterioration of the labour market situation in the second half of the year.

The financial situation of businesses meanwhile remains stable, which Banka Slovenia attributes to ample liquidity reserves, favourable bank financing, labour costs subsidies, the possibility of deferred tax payments, as well as the government's loan guarantees scheme.

On the other hand, the state's fiscal situation has deteriorated significantly. Revenue in the first five months decreased year-on-year by EUR 720 million or 9.2%, while expenditure was up by EUR 874 million or 11.4%.

The state deficit could reach around 8% of GDP this year, whereas public debt could rise to 2015 levels, when it stood at a record 82% of GDP.

08 Jul 2020, 09:56 AM

STA, 7 July 2020 - National telco Telekom Slovenije signed a contract on Tuesday with Hungarian media company TV2 Media selling Planet TV, its subsidiary which produces the eponymous TV channel. TV2 Media will pay EUR 5 million for the 100% share, Telekom said in a press release. The deal is expected to be finalised by autumn.

Today's development confirms the previous media reports on the sale and the value of the deal.

Telekom's supervisors have already given the green light while all the other approvals are expected by the end of September.

TV2 Media is owned by Jozsef Vida, whom media associate with the business network of the Hungarian ruling party Fidesz. Speculation that TV2 is eyeing Planet TV started in early June, when reports also mentioned Croatian entrepreneur Ivan Ćaleta as a second candidate.

The news portal Necenzurirano.si also reported about unofficial plans to merge Planet TV and Nova24TV, the news portal and website associated with the ruling Slovenian Democratic Party (SDS) and also in the ownership of Hungarian individuals reportedly close to Hungarian Prime Minister Victor Orban.

Telekom launched Planet TV in 2012 under the then SDS-led Janez Janša government. It was reported that the telecoms incumbent had been looking for a strategic partner which would buy a 49% share in the TV production company already at the beginning of January, only to change its mind later on.

According to the newspaper Delo, Planet TV has cost Telekom Slovenije EUR 80 million in the form of capital injections, advertisements, loans and other services since it was launched in September 2012, and has operated in the red.

The latest blow was the Court of Arbitration of the International Chamber of Commerce ordering Telekom last year to pay a EUR 23 million buyout to Antenna Group, the Greek partner who wanted out of the joint venture.

Telekom, which thus became the sole owner of Planet TV, saw the buyout significantly reduce its profit last year, which reached a mere EUR 1.2 million.

After initially announcing the search for a strategic partner, Telekom said in mid-March that selling the outright stake in Planet TV was also an option.

According to Necenzurirano.si, some supervisors expressed great reservations about the sale at today's session. They argued they had been presented only the Hungarian bid, which was picked as the best by the Telekom management and a financial consultant.

Several bids had reportedly arrived, with the second and third best bidders allegedly offering only one euro for the company.

Unlike the other bidders, the Hungarians reportedly received an assurance from Telekom that it would continue to advertise on Planet TV. Telekom reportedly also pledged to turn EUR 30 million in loans into Planet TV's capital before the sale is completed.

Telekom also allegedly plans to write off some EUR 3 million in business claims and contribute another million to help keep Planet TV afloat.

The portal also says that Hungarians could extend the sales procedure until the end of the year, but in that case Telekom would have to transfer another EUR 2 million to cover Planet TV's loss.

All our stories on Slovenia and Hungary are here

07 Jul 2020, 10:39 AM

STA, 7 July 2020 - The Ljubljana city council has confirmed changes to the municipal spatial plan for a former industrial area in the borough of Vič, where a residential complex is planned to be built. Several councillors have raised the issue of the investors including Mihael Karner, a Slovenian who is wanted by the US.

The council confirmed the project in a 21:15 vote on Monday to transform the site of the former Tovil factory in the south-western borough into a complex featuring 140 apartments, including up to 60 assisted living apartments.

The approximate location of the project

www.state.gov Mihael Karner.JPG

state.gov

The main investor in the Urban Oasis project is entrepreneur Mihael Karner, who is being sought by the Drug Enforcement Administration (DEA) with an international warrant for alleged distribution and import of anabolic steroids and money laundering.

Gregor Slabe of the Democrats said he was convinced that the US services were monitoring today's session and that they would certainly make a record of which councillors had endorsed Karner's project.

"The US is requesting extradition of Karner, his wife and brother. Since you failed to support our proposal to withdraw this disputable item from the agenda, you will be the ones held responsible for international diplomatic consequences," he added.

Igor Horvat (SDS) noted that, according to the media, the investors were companies which had not had any revenue recently, and no employees. He added that the plan's approval might jeopardise Slovenia's international reputation.

There is concern that Ljubljana will only get another construction pit, said Ksenija Sever, also of the SDS. "The investors will get loans, sell apartments, and then vanish, so that taxpayers can pay for another banking hole."

Asta Vrečko of the Left added that the investors were problematic and that the "municipality is doing favours to very disputable companies".

Vice Mayor Aleš Čerin, who chaired the session due to the absence of Mayor Zoran Janković, who is in quarantine after having a contact with a person who tested positive for coronavirus, said that the spatial plan was not about an individual investor, but spatial planning.

"Nowhere is written that the gentlemen you spoke about will be the actual investors", he said, adding that they were Slovenian citizens who had no criminal record in Slovenia.

05 Jul 2020, 14:20 PM

A new online store opened last week, El Merkadito, offering a growing range of products from the Americas, the kind of things you just can’t find in Mercator or Spa. Always interested in the exotic, delicious, and spicy we got in touch with the found, Patricia Castillo (now Patricia Grm) from Veracruz, Mexico, to find out more…

How did you come to be in Slovenia?

In 2006, I started a relationship with a Slovenian guy who then became my husband in 2009. I moved to Slovenia in 2008, when I was 20 years old, and the next year we got married. So now I’ve been here for almost 12 years and totally love the country, its people and food. That said, I still miss Mexico, and the kind of food I could eat there, which is how I got the idea for the store.

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What were you doing before this?

I’ve worked as a Spanish and English teacher for many years. Back in 2018, I became interested in remote work, and since then I’ve been working that way. Sometimes as a translator, customer support, social media assistant, and now I finally accomplished what I’ve desired for quite a long time, to have my own online shop.

mexican food slovenia 01.png

Why now?

With the lockdown everyone was doing more shopping online, and that’s when I noticed the lack of options for online food and drinks in Slovenia. Even local things, let alone foreign brands or products. Also, a great way to experience a country, especially when you can’t visit it, like now, is by trying the real, authentic food. So this seems like a great time to bring some of the America’s to Slovenia

Also, for myself, every time I go back to my lovely Mexico or Panama, where my father lives, I just want to eat the food and products you can easily find there non- stop. Maybe this is just nostalgia, but  in Slovenia I often miss the things I grew up with, so I thought why not bring them here? I’m also convinced many Slovenians are interested in trying new flavors and dishes.

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What are some of the products people can find on El Merkadito?.

We have Mexican products such as dried chilies, spicy sauces, spicy candies, chocolate with cinnamon, beans, sweets, beer, and so on, while from the US, we have different brands like Jack Link's, Dr. Pepper, Hershey's, Kellog's, Reeses, M&M's, Cheetos, and more.

You can also find products from Latin American, like Yerba mate tea, pre-cooked white or yellow corn flour, and beer.

Since we’re a small, new company, and in the spirit of solidarity with other small businesses in Slovenia and Europe, we also decided to offer some European products. Supporting each other is a good and healthy way to collaborate with other businesses, and we practice fair trade with the producers to keep this attitude in all aspects of our work.

american foods 01.png

What’s next?

I don’t know, since these are early days, but I'm really excited about this new adventure. I believe expats, especially from the Americas, will be happy to have some things at home that remind them of their childhood or good memories from where they are from. I'm also sure Slovenians are going to be curious about this, and once they try some of the interesting, delicious and hard to find products El Merkadito offers, we’ll become part of their "I love you list".

Check out the store now to see what you’d like to try, and follow on Facebook to find out when new products are added, with 15% off on your first order  in July.

01 Jul 2020, 11:16 AM

STA, 1 July 2020 - The Slovenian telecoms equipment maker Iskratel, which has been looking for a strategic partner for a while, has been acquired by the Austrian group S&T. The deal, worth EUR 37.5 million, is expected to be finalised in the autumn as it awaits regulatory approval.

The S&T group, a global IT consulting, solutions and services provider based in Linz, signed the contract to take over the outright stake in the Kranj-based group on Tuesday, Iskratel has announced.

The Iskratel group, which last year generated EUR 115 million in revenue, has been guaranteed to be able to keep its identity and brand as part of the S&T group.

The release adds that variable purchase prices had also been agreed depending on profit developments in the next three years.

The companies recognise numerous synergies with the takeover, in particular in the development of 5G networks, solutions for industry 4.0, digital transformation of industry verticals and next-generation optical broadband networks.

Opportunities are also seen in the strengthening of the sales network in the Adriatic and Eastern Europe regions, and expansion to the Western European markets.

The takeover concludes a year-long search for a strategic partner which, according to Iskratel, will "enable further growth and development and implementation of the long-term business strategy."

Željko Puljić, the CEO of the company employing 900 people and present in more than 50 countries, said that "faster portfolio development and market penetration ... will be fostered through the combined know-how, innovation drive, sourcing and sales network."

S&T CEO Hannes Niederhauser added that the company "expects to gain an advantage by strengthening our 5G product portfolio", and that, due to the synergies, it would be possible to increase Iskratel's earnings by 10% within the next 2 years.

"With this acquisition, we are positioning ourselves even more strongly for the future in our focus areas of smart factories and train radio for high-speed trains."

S&T employs some 4,900 people and operates in more than 30 countries around the world, as a leading provider of IT services and solutions and supplier of IT systems in Central and Eastern Europe, the release adds.

Commenting on the takeover for the STA, market analyst Lojze Kozole from stock brokerage Ilirika said that Iskratel had made a good deal.

Although financials for 2019 are not yet available, Kozole calculated on the basis of the 2019 figures the company had been sold at a price eight times higher than its EBITDA.

"If the EBITDA trend from the past years continued into 2019, then this is a good price," he said.

30 Jun 2020, 13:15 PM

STA, 30 June 2020 - The state-owned telecoms company Telekom Slovenije has reportedly sold its troubled subsidiary Planet TV to the Hungarian free-to-air channel TV2, owned by Jozsef Vida, whom media associate with the business network of the Hungarian ruling party Fidesz.

The unofficial news was broken on Tuesday by the editor of the news portal Požareport, Bojan Požar, who wrote that Planet TV, which produces the eponymous TV channel, has been sold for EUR 5 million, with the transaction still outstanding.

Telekom Slovenije, which launched Planet TV in 2012 under the then Janez Janša government, has not confirmed or denied the report.

Speculation that Hungary's TV2 was eyeing Planet TV started in early June, when reports also mentioned Croatian entrepreneur Ivan Ćaleta as a second candidate.

It was reported that the telecoms incumbent had been looking for a strategic partner which would buy a 49% share in the TV production company already at the beginning of January, only to change its mind later on.

According to the newspaper Delo, Planet TV has cost Telekom Slovenije EUR 80 million in the form of capital injections, advertisements, loans and other services since it was launched in September 2012, and has operated in the red all the time.

The latest blow was the Court of Arbitration of the International Chamber of Commerce ordering Telekom last year to pay a EUR 23 million buyout to Antenna Group, the Greek partner who wanted out of the joint venture.

The telco, which thus became the sole owner of Planet TV, saw the buyout significantly reduce its profit last year, which reached a mere EUR 1.2 million.

After initially announcing the search for a strategic partner, Telekom Slovenije said in mid-March that selling the outright stake in Planet TV was also an option.

Planet TV was established by Telekom Slovenije at the time of Janša's 2012-13 government. Telekom also owns news web portal Siol.net, which got a new editor-in-chief after Janša became PM again in March.

Hungarian ownership is meanwhile presently involved in two Slovenian media outlets associated with Janša's Democrats (SDS) - the weekly paper Demokracija and the NovaTV web portal and TV channel.

Al our stories on Slovenia and Hungary

23 Jun 2020, 10:33 AM

STA, 22 June 2020 - A survey carried out by the Chamber of Commerce and Industry (GZS) shows that Slovenian companies expect to generate lower revenue this year at an average rate of 17%, and that more than half of them believe their exports will also decline.

The survey carried out between 20 May and 15 June among 272 companies, and published on Monday, sees a majority of companies expecting lower revenue this year, while 13% expect higher revenue and 8% the same revenue as in 2019.

Among those which expect a decline in revenue, 18% believe their revenue will drop by 10%, 16% believe their revenue will drop by 20%, and 13% believe they are in for a 30% decline.

Some 63% of the surveyed companies expect their exports to decline this year, while almost a fifth expects an increase, and another fifth expects to see no change.

Slightly more than half of the companies expect that their investments will be lower this year than in 2019, more than a third think they will invest more and 15% think that they will invest the same amount as last year.

More than a fifth of the companies which intend to reduce investments will do this at a 50% rate or higher.

Generally, the surveyed companies will be firing more than hiring this year, and 53% expects their workforce to be reduced this year compared to 2019. Less than a fifth plans to increase the workforce and 28% thinks their workforce will remain the same.

A majority of the companies expect that their revenue will record an annual growth next year, with 31% expecting this will happen not later than at the end of June 2021.

Some 14% of the companies think this will happen by the end of this year, while 28% said this will not happen before the end of June 2021 or that this will happen even later.

Due to the coronavirus pandemic, the export presence of Slovenian companies will drop by 46 percentage points - the difference between the share of those which expect growth and those which expect a drop.

The survey also shows that subsidies for furloughed workers is the most used anti-coronavirus measure, as 55% of the companies used it. It is followed by tax deferral (24%), loan obligations deferral (19%) and loans from the guarantee scheme (14%).

On average, the surveyed companies had 33% of their workers on temporary leave during the survey. In half of the cases, the companies asked for loans ranging from EUR 100,000 to EUR 1 million, and 88% of the companies are yet to be approved their loans.

22 Jun 2020, 12:57 PM

STA, 22 June 2020 - In tackling grey economy, the Financial Administration (FURS) last year paid particular attention to undeclared work, carrying out a total of 11,982 inspections, with violations detected in 22.3% of the cases. A total of EUR 5.8 million in fines was issued, shows the annual report of the relevant government commission.

In the report, the commission for the prevention of undeclared work and employment commends FURS for managing to detect a large share of irregularities through "well planned and targeted inspections".

It is FURS which received most of the reports related to violations of the labour legislation - last year it received 2,826 reports against 3,504 entities.

In 2019, it detected a total of 2,826 violations and issued a total of EUR 5.8 million in fines, while also filing eleven criminal complaints over the criminal act of undeclared employment under the penal code.

Perpetrators received suspended prison sentences in two cases, the report shows.

What the Inspectorate of Infrastructure has meanwhile emphasised as still problematic is supervision of transport of passengers with personal vehicles, where it is hard to prove undeclared work.

On the other hand, the Inspectorate of Education and Sport notes that there are still private providers of child care who avoid registration procedures in which they need to prove they meet the personnel, spatial and equipment requirements.

"This may result in risky and inadmissible situations for children, which is why such acts should be prevented by amending the relevant law with appropriate measures," the report says.

The police say in their part of the report that no significant differences were detected in comparison with the previous years, and that undeclared work and employment is the most frequent in construction, hospitality and transport sectors.

In terms of criminal acts against the labour relationship and social security, the most frequent in recent years is the failure to pay wages and social security contributions, and illegal termination of contract.

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