STA, 5 July 2019 - Biser Bidco, the sole owner of Slovenia's second largest bank NKBM, decided on Friday to pay out EUR 5 million in dividends, leaving EUR 126,66 million in profit undistributed.
The EUR 5 million payout is significantly lower than the year before, when Bidco Biser decided to pay out EUR 45.8 million in dividends. The AGM also granted a discharge of liability to the bank's management and supervisory boards.
The Luxembourg-based company is owned by US fund Apollo, which holds 80% of the company, and the European Bank for Reconstruction and Development (EBRD).
The two companies signed a contract to buy the Maribor-based state-owned bank for EUR 250m in mid-2015, meeting all the requirements in April 2016.
The AGM comes only a few weeks after NKBM was selected as the best bidder in the privatisation of Abanka. A EUR 444 million sales contract has already been signed, with the transaction pending regulatory approval.
The sale is expected to go through by the end of the year. The NKBM-Abanka merger, which is expected to be wrapped up in the first quarter of 2020, will create the second largest bank group in Slovenia.
STA, 7 July 2019 - Slovenia's organic farming sector continues to grow slowly but steadily. There were 3,320 agricultural holdings registered as organic farms last year, a 4% increase over 2017. The farms produced more organic vegetable and fruit in 2018 than the previous year, which was a bad year for farmers due to extreme weather conditions.
Farms holding the status of organic producers represented 4.8% of all farms in Slovenia.
The country's total organic produce grew by 27% last year compared to 2017, amounting to over 29,000 tonnes, while the amount of produced vegetables (over 1,800 tonnes) increased by 21% compared to 2017, shows the Statistics Office data released on Friday.
The production of grapes (over 1,500 tonnes) and olives (over 550 tonnes) increased as well, by 15% and 31%, respectively.
The 2018 organic production of fruit was almost six times bigger than in 2017, weighing more than 5,000 tonnes.
The number of animals in organic farming was mostly lower in 2018 than in the previous year - on average by 9% - with the exception of honey bee colonies (up by 31% to 2,863), other animals, such as game reared in pens (up by almost 9%) and cattle (up by almost 2%).
The total amount of organically produced meat grew by 26% in 2018 compared to 2017.
The production of organic milk in 2018 mostly increased compared to 2017 - organic cow's milk was up 20% to 6,900 tonnes, sheep milk was up by almost 2% to 181 tonnes, while goat milk was down 13% to 139 tonnes.
The organic production of honey and eggs grew in 2018 as well - by 41% and 26%, respectively.
Agricultural areas intended for organic farming increased in 2018 - by 1,320 hectares or 7% compared to 2017. The organic vineyard area grew by 37%, organic orchards by 14% and olive grooves by 13%, while the area for organic production of vegetables increased by 11%.
The share of permanent pastures and meadows in organic farming is decreasing though, but at a slow pace - the share was at 82.8% in 2017 and 81.7% in 2018.
STA, 4 July 2019 - The Ministry of Labour has come up with a calculation of the effect of the planned rise in the minimum wage in 2020 on the entire economy, establishing that, coupled with the elimination of bonuses from the minimum wage, it would cost the private sector EUR 197.1 million or 1.77% of the wage bill.
The calculation comes as a response from the government to the criticism from employer representatives about it having failed to make proper projections before adopting legislative changes raising the minimum wage.
In a recently published document, the ministry says that the effect of the raise of the gross minimum wage could be estimated relatively precisely based on data from previous years, while it is much harder to estimate the effect of the elimination of bonuses, as there are no relevant databases.
The ministry has established that the financial effect of the expected raise of the minimum wage in 2020 would be EUR 63.6 million or 0.57% of the wage bill, and the elimination of bonuses an additional EUR 133.5 million or 1.2% of the wage bill.
In commerce, where the number of employees on minimum wage is the highest, the added cost is expected to be EUR 37.3 million or 1.81% of the wage bill.
The ministry has assessed that the cumulative financial effects at the level of the entire economy will not be significant, while it is aware that they could be higher in industries with lower wages and a higher number of permanent bonuses.
It does not expect that a large number of companies will get into trouble considering that the total net profit posted by Slovenian companies last year increased by 16% and that the economic situation and the situation on the labour market are favourable.
Employer representatives are disappointed with the calculation, with Jože Smole, the secretary general of the Employers' Association, telling the STA that the analysis was very modest, featuring only three pages of text.
Smole is convinced that it does not take into account the complexity of the matter and is critical of the ministry for relying too much on the general data about profit and disregarding the possibility that companies which do not make profit would get into further trouble.
The Chamber of Commerce and Industry (GZS) reiterated in its response that it was against the changes to the minimum wage act, which it believes will hurt vulnerable individuals and companies the most.
The changes, which were passed last year without the approval of all social partners, raised the minimum wage this year from EUR 638 net to EUR 667 net, and next year it is expected to increase to EUR 700 net.
All our stories on pay in Slovenia are here
STA, 2 July 2019 - The share of electricity from renewable sources in gross end use in Slovenia in 2018 rose by 3.4 percentage points to 21.8% from 2005, the Energy Agency, the national regulator, says in its 2018 report.
This was facilitated by a support scheme which has since 2009 involved more than 2,500 producers with almost 3,860 production facilities running on renewables.
But in line with national goals stemming from the EU's climate and energy package, the share of renewables in gross end use will have to be raised to 25% by 2020.
To achieve this goal, progress will have to be made in transport and in power production, the agency says in the report, which has been sent to the National Assembly.
In transport, Slovenia was by 4.7 percentage points behind the target 10.5% share in 2018, while the gap for electricity output to the 39.3% goal was over 7 points.
Renewables-based power was generated mostly by hydro plants and other plants running on renewables, reaching 34.5% of the country's total power output in 2018, up almost 5 points annually.
The rest of Slovenia's power output came from coal-fired power stations (29%) and the Krško Nuclear Power Plant, the country's only nuclear power station (36.5%).
Domestic electricity production covered almost 85% of domestic electricity consumption, up 1.7 points from 2017.
However, the agency said the output did not reflect the actual potential of the country's electricity production facilities.
It was rather a result of the structure of production facilities, their competitiveness and the emerging electricity market target model, says the report.
For instance, hydro power stations' output depends on water levels, while coal-fired power stations and plants running on liquid and gas fuels strongly depend on daily power consumption as well as on market variables such as the prices of emission coupons, fuel or wholesale.
The agency also says market concentration in the retail market somewhat decreased last year, which shows there is more competition among electricity suppliers.
However, the end price of electricity for an average household edged up 0.3%, while it rose by more than 8% for other users.
While there is still much room to save on electricity bills by changing suppliers, the number of those did so in 2018 dropped by one point to 5.7% over 2017, a second consecutive annual drop.
The Energy Agency is the country's national regulatory authority which directs and supervises electricity and gas energy operators.
Its mission is to act in the interest of all market stakeholders, so it is not financed from the state budget but from network charges.
STA, 3 July 2019 - The production of the fifth generation Renault Clio was officially launched at Revoz, the Novo Mesto-based assembly plant of the French car maker on Wednesday. The project to establish the assembly line for the latest Clio is worth EUR 90 million, with the Slovenian government chipping in a EUR 6 million incentive.
The ceremony was attended by Prime Minister Marjan Šarec and Economy Minister Zdravko Počivalšek, with Šarec saying that Slovenia was proud to have had a factory such as Revoz for the last 60 years.
He said the EUR 90 million investment was a milestone in the development of the automotive industry in Slovenia and in industrial development in general.
Počivalšek noted that the Slovenian car industry boasted 284 companies, which generated 10% of the gross domestic product and more than 20% of exports while employing more than 16,000 people.
Slovenia recorded EUR 15.2 billion in foreign investments last year, which is EUR 1.2 billion more than in 2017.
Počivalšek said the Environment Agency was processing more than a hundred applications for environmental permits, "which means a lot of investments are planned in Slovenia".
Announcing the launch of the new generation of the B-segment supermini, Revoz CEO Kaan Ozkan said that it would bring new jobs, additional investments and a technological breakthrough as a major milestone for the plant and the local environment.
According to Ozkan, the predecessors of Clio V have been among the best selling car models in Slovenia, with the plant producing almost more than two million units since 1995.
As the government announced the project investment at the end of last year, it said that it expected the new investment in Novo Mesto to increase added value per employee at Revoz, which employs 3,400 people.
So far, more than 270 people have been hired because of the new investment.
The government said that Renault intended to invest EUR 4.2 million in buildings and EUR 85.8 million in new machines and equipment as part of the project.
According to the Economy Ministry, the investment will return multiple times as Revoz is expected to pay more than EUR 14 million in taxes and social security contributions in the first three years alone.
Revoz produced older Clio generations between 1993 and 2015, with the last Clio II car produced there at the end of April 2015.
The plant produced almost two million and a half of these vehicles before launching the production of Clio IV in June 2017. It also assembles the Renault Twingo and the Smart Forfour, including its electric version.
STA, 3 July 2019 - The Serbian AIK Banka, a new sole owner of Gorenjska Banka since April, decided at Wednesday's annual general meeting that EUR 12 million, or almost two-thirds of last year's distributable profit of Gorenjska Banka of EUR 18.9 million, will be earmarked for dividends at EUR 33.75 per share.
The rest - EUR 6.9 million - will remain unallocated, with EUR 4.3 million being at the bank's disposal for unlimited and immediate use to cover risks or losses the moment they occur.
The assembly granted discharge of liability to the management and supervisory boards for last year as well as passed a number of amendments of the company's articles of association today.
The supervisory board, currently including six members, is as of now required to have a minimum of three members and a maximum of seven, while the management board, currently featuring two members, is required to have at least two members and at most five.
Gorenjska Banka generated EUR 20.68 million in profit before taxes last year, thus doubling the 2017 gross profit. The net profit in 2018 was EUR 17.1 million. The bank's total assets amounted to EUR 1.83 billion at the end of the last year.
STA, 2 July - Speaking to the Slovenian press in Budapest in the wake of a takeover of SKB bank, the CEO of financial services provider OTP Sandor Csanyi announced organic growth on the Slovenian market, with detailed decisions still subject to an ongoing analysis.
Csanyi described the operations of SKB, which has been sold to Hungary's OTP by the French group Societe Generale, as above average.
He said the foray onto the Slovenian market was important for OTP because of its proximity and promise of good results. Csanyi simultaneously sees the Slovenian market as demanding, arguing banks will have to operate more efficiently.
Still, major changes are not planned for now at SKB, which includes staffing. If there are no mergers, mass layoffs do not make sense, he said, while arguing it was of course normal for some posts to be centralised and that the detailed plans still depended on an ongoing analysis.
Csanyi did not wish to reveal how much OTP paid for SKB, the third largest Slovenian bank when it was acquired by Societe Generale in 2001.
He would also not say how much OTP had offered for Abanka, the current Slovenian no. 3 which ended up being sold by the state two weeks ago to the NKBM bank under its new owner, US fund Apollo. He said OTP just offered too little, while he described the sales procedure as entirely transparent.
According to Csanyi, OTP wants to grow in an organic fashion in Slovenia and reach at least a 10% market share.
The company is interested in helping finance the new Koper-Divača rail track, even if Hungary as a country would not participate, while Csanyi would also not mind participating in some other state projects.
Also highlighted was Ljubljana's Emonika, the stalled train and bus passenger terminal project, with Csanyi saying the situation was presently being examined.
STA, 1 July 219 - A bill to limit commission fees for renting real estate and other costs which real estate agencies can charge their clients, was endorsed at committee level on Monday, although MPs from left and right were reserved about limiting "business initiative". The cabinet supports the opposition-sponsored bill, but realtors are outraged.
The Left, which supports the minority government, filed the changes to the law on real estate agencies in June to improve the status of tenants but also landlords.
Under the changes, landlords would fully pay the commission fee charged by a real estate agency for a service commissioned by them.
This means tenants would no longer shoulder part of the fee, which the Left deems fair, since they have to pay a down payment and the rent.
A cap would also be imposed on the commission fee that can be charged by apartment rental agencies to landlords. The capped amount would correspond to one monthly rent, but would not go lower than 150 euro.
The Left believes tenants in apartments rented out at market prices should benefit the most since they will no longer have to pay commission fees for the services they have not commissioned and since landlords would be encouraged to rent out their apartments for longer periods.
The bill also introduce EU rules in acquiring qualifications for a real estate agent. As Left leader Luka Mesec told the Infrastructure, Environment and Spatial Planning Committee, Slovenia had already received a warning about a delay from the European Commission.
State Secretary at the Ministry of the Environment and Spatial Planning Aleš Prijon said the bill was in line with the government's housing policy, especially in that it protected tenants.
A similar view was expressed by the Consumer Protection Association, whose Jana Turk said it improved consumer protection in the rental market.
On the other hand, representatives of real estate agents find it unimaginable that anyone would limit the price of a service available on the free market.
Boštjan Udovič from the Chamber of Commerce and Industry (GZS) said there was enough competition on the market and citizens were obliged to use this service.
He said that less than 50% of the deals were made through real estate agents, which showed tenants were not forced to shoulder the commission fee for the service.
If the bill is passed, the GZS's chamber of real estate business will report Slovenia to the European Commission and probably ask the Constitutional Court to review it, he announced.
All our stories on real estate are here
STA, 27 June 2019 - Addressing the press in the face of mounting criticism on Thursday, the management of Adria Airways said it was aware of the carrier's issues but was also working hard to resolve them. CEO Holger Kowarsch said talks with potential strategic partners were under way, but he added Adria could also survive on its own.
Adria, Slovenia's former flag carrier which is in German ownership since 2016 and has struggled with liquidity problems, will do all it can to reduce the number of cancellations and delays, Kowarsch said, but he added that these were normal for all airlines and could not be avoided entirely.
Chief operating officer Tadej Notersberg said the challenges had gotten tougher in May primarily because of an unexpected protraction of maintenance work on aircraft and staff issues.
Now, only one plane remains subject to maintenance work, while 50 pilots and 70 cabin staff members were employed in the past year, with training taking a while.
Adria rejected media reports of a high pilot turnover rate, saying staff turnover had not increased and was lower than at comparable companies in Europe.
Meanwhile, Kowarsch did not wish to talk about any names, but said Adria was in talks with several potential partners. While the company was allegedly seeking state aid recently, Kowarsch added it could also survive without a strategic partner.
Adria did not negotiate a new contract with aircraft maintenance firm Adria Tehnika after the old one expired, but it has already picked a new partner, whose name will be revealed next week. Media reports suggest a Scandinavian company will take over maintenance in September.
Notersberg said Adria parted ways with Adria Tehnika because it was not happy with it, while he said the change will definitely not affect safety.
All our stories about Adria Airways are here
Along with Slovenia being discovered as a hidden gem another story that seems to swing by on an annual basis is the one about IKEA opening a store in Ljubljana. However, before you get your hopes up, and perhaps postpone the purchase of a bookcase from another retailer, we present a brief history of the long-delayed project, with the implication that you may still have to leave the country for a visit.
The first news under the headline “IKEA Coming to Ljubljana” seems to come in April, 2014, with a report in the Slovenia Times that:
Swedish furniture giant Ikea is interested in buying a 84,000 square metre plot in Ljubljana's shopping district BTC, the business daily Finance reported on Tuesday. According to unofficial information, Ikea is in talks to buy the plot, owned by insurer Zavarovalnica Triglav, for a sum between EUR 19.3m and EUR 22.7m.
The report quotes a spokesperson for BTC City as saying that it will be at least 18 months – until end last quarter of 2015 – before construction begins.
All’s quiet on the IKEA front until about a year later, March 2015, when the Swedish furniture giant signed a preliminary agreement on the purchase of a plot of land in Ljubljana's BTC City.
At around the time when construction was supposed to have been underway, the next news suggested that things were still at a preliminary stage. Ljubljana’s Mayor, Zoran Janković, no doubt as anxious as the citizens he presides over as to when he’ll be able to get a reliable supply of meatballs, easy-to-assemble furniture, free paper tape measures and pencils, announced in January 2016 that the board of the Swedish company had just confirmed plans to expand to Ljubljana. Reports in the Swedish media indicated that the store would now open in 2018.
Notably, the Mayor said in early 2016 that the negotiations with IKEA had already been going on for nine years.
Eighteen months later, and in September 2017 IKEA issued a press release saying that it had chosen the companies who would build its store and the needed infrastructure in Ljubljana, with the project now waiting for an environmental permit before the building permit could go force.
In February the Slovenian media reported that demolition work had already begun on the site of the proposed store, but that construction work, and indeed any further developments, remained in limbo due to the unresolved status of a planned access road.
On 7 June, 2018 the headline news was "IKEA gives Janković an ultimatum". The report states that the firm “has found a solution in a new spatial planning law that allows investors to request an emergency procedure for changing the relevant zoning plan. It filed the application on 4 June.” On June 19 it was reported that the company would need to conduct a traffic study to show that a new road between Kajuhova and Ameriška streets should be constructed to provide access to the planned store.
A further report in October 2018 said that the project was still on hold until Ljubljana Municipality agreed to build the road.
In February of this year, some months after the store was original due to open, Ljubljana City Council unanimously endorsed a decision that allowed IKEA to finally start building its store in BTC City, even though the required access road south of the planned centre has not yet been built due to ownership complications. The report concludes that IKEA will soon start construction of the 30,000 sq-metre store, which could open in 2020 and provide around 300 jobs.
Related: BTC City as a Food Destination
STA, 23 June 2019 - Slovenia-based industrial companies generated EUR 26 billion in revenue last year, 9.4% more than in 2017, data from the Statistics Office show. The office noted however that about 2-3 percentage points should be attributed to the inclusion of additional industries in the index, among them wood processing, metallurgy and machine repairs.
Industrial revenue has been increasing for years. In 2014, it was at 19.4 billion, the year later it climbed to EUR 20.1 billion, to EUR 21.3 billion in 2016 and to EUR 23.7 billion in 2017, the office said.
Companies making cars and trailers have been at the forefront in the recent years as well as in 2018, when they accounted for nearly 15% of total industrial revenue, followed by production of electric devices (11%) and metallurgy (10%).
Some 75% or EUR 19.8 billion in revenue was generated abroad. Companies making cars and trailers generated 93% of their revenue abroad, followed by companies making boats (86%).
On the other hand, beverage makers generated nearly 75% of their revenue on the domestic market, followed by food companies (71%) and publishing companies (64).
More data on this can be found here