Business

01 Apr 2020, 15:30 PM

STA, 1 April 2020 - BSH Hišni Aparati, which was one of the first large manufacturers in Slovenia to halt production over the coronavirus epidemic, is also among the first to relaunch it. The company, the largest producer of small household appliances in Europe, operated at 15% of capacity on Monday and hopes to be at 50% next week.

"We mostly had to close because public transport was suspended, as 75% of our workers used the bus to come to work...The second reason was the absence of protective equipment and the fact that an outbreak in our factory would have meant an excessive peril for the Upper Savinja Valey. There are 1,500 of us here while the valley has 16,000 inhabitants," BSH director Boštjan Gorjup explained for the business daily Finance.

After closing shop on 15 March, BSH, which is a part of the international concern BSH Home Appliances Group, told around 150 workers to return to work on Monday. While planning to start working at 50% capacity next week, Gorjup, who is also the chairman of the Chamber of Commerce and Industry (GZS), explained this still depended on suppliers.

"Those in China have been working for some time already. I expect that those in Italy will get a green light after an inspection where they need to prove they meet security demands, much like was the case in China. We also issued a document stating that their parts are crucial for us," Gorjup said.

BSH is now taking the temperature of workers entering the factory, while providing each one with two surgical masks, protective gloves and glasses. Work has been adjusted to provide a two metre distance between workers or through plastic barriers. They are coming to work by car now, with special parking space provided.

Gorjup said that demand for household appliances had not fallen with the crisis, with online purchases replacing conventional shopping.

The other major household appliance maker in Slovenia, Gorenje, which has a 3,400-strong workforce, meanwhile remains closed. On 20 March, the management of the company, owned by China's Hisense, decided to close all facility in Europe from 23 March to 5 April.

The company, which initially introduced extensive protective measures, said then it would close as a precautionary measure to contribute to efforts to contain the virus even though it had sufficient amounts of protective equipment and production material.

The management and the trade union agreed to resume production on 6 April unless this is prevented by additional measures in other countries that would hamper operations in the industry.

Also remaining closed is Renault's Novo Mesto-based assembly plant Revoz, which suspended production on 17 March. Revoz, which emloyss around 3,400 people, said future steps would remain on "both the situation in the country and the decisions of the Renault Group".

30 Mar 2020, 13:08 PM

STA, 30 March 2020 - Housing prices increased by 5.2% in 2019 in what was the fifth consecutive year of growth, show data released by the Statistics Office on Monday. The number of real estate transactions was up 4%, mostly on account of sold used flats, while the value of the deals amounted to EUR 1.3 billion, an increase of roughly 6% on 2018.

The continuation of growth came after the housing market started recovering in 2015 with 0.1% growth to then see prices rise by 6.9% in 2016, by 10% in 2017 and by 9.1% in 2018, said the office.

The total number of real estate deals made last year was 13,682, which is a 4% increase on 2019 but 8% less than in the record year 2017.

The office pointed out that the sale of new units had been very modest for two years now, while the sale of used units was going strong, with 3,458 transactions recorded in the last quarter of 2019 alone for a record total amount of EUR 340 million.

Used flats accounted for 2,141 transactions in the last quarter of 2019, which compares to only 107 new housing units sold for a total of EUR 18 million. The latter was still an increase on 70 units sold in the third quarter.

The prices of new flats have seen fluctuations in the past four years, but a clear growth was recorded. In the last quarter of 2019 they were 26.9% higher on average than in 2015.

The prices of used housing units fell in the last quarter of 2019 for the first time after 15 consecutive quarters of growth. They were down by 0.2%, but merely on account of a 3.6% decrease in the prices of used houses as used flats were 1.7% dearer. In Ljubljana, used flats were 0.4% more expensive.

Year-on-year, the biggest increase in prices was seen in the last quarter for new houses (10.9%), followed by used flats in regions other than the capital (7.1%), new flats in general (6.3%), used houses (3.8%) and used flats in Ljubljana (3.2%).

27 Mar 2020, 14:20 PM

STA, 27 March 2020 - 2TDK, the state company managing the construction of the new railway between the port of Koper and Divača, has signed an EU 8.5 million contract with a consortium led by Markomark Nival on the construction of bridges across the Glinščica Valley, one of the first large structures on the new track.

The contract covers the construction of two bridges, which is expected to take 15 months. Under initial plans, the work should start in August and finish in November 2021.

The EU is to fund 85% of the Glinščica Valley project. However, missing the December 2021 deadline for the completion of the project would result in the European funding needing to be returned. To catch the deadline, work would need to begin in mid-2020 at the latest.

The contract was signed on Friday by 2TDK director general Dušan Zorko and director Marko Brezigar. Due to coronavirus measures, Markomark CEO Nival Marko Peter and Ekorel CEO Zoran Pogačar signed it separately.

The signing of the contract comes after the consortium, which won the public tender for the first of several bridges on the planned new Koper-Divača railway, was rejected over flawed documentation but was later successful with its appeal. Markomark Nival was asked to supplement its file.

27 Mar 2020, 09:30 AM

STA, 26 March 2020 - The Chamber of Craft and Small Business (OZS) has warned that as many as 1,400 sole proprietors closed their business this month and proposes that these also be included in the measures planned by the government to alleviate the economic impact of the coronavirus epidemic if they opt to relaunch their business.

The OZS says that many of the sole proprietors have closed their firms in order to avoid paying social security contributions and taxes at a time when demand for their services and products has died down.

"We need to understand the distress of many sole proprietors who lost their income overnight... and because there was only talk of deferring the payment of contributions and taxes, many opted to close their businesses," the chamber said on Thursday.

Last week, the National Assembly passed changes allowing sole proprietors to defer the payment of social security contributions and taxes for April, May and June.

This week, the government announced additional measures for sole proprietors, including social security contribution and tax exemptions, and providing a monthly universal income of 70% of the minimum wage.

Details of this proposal are to be defined by the government on Friday.

The OZS warned today that unless sole proprietors who had closed their businesses be included in these measures, they would end up at the Employment Office and in need of welfare, becoming an additional burden for the state.

The OZS also proposes that the measures planned be effective as of 1 March, when the slump in orders had begun to show.

23 Mar 2020, 15:43 PM

STA, 23 March 2020 - Virtually all Slovenian businesses have been affected by the coronavirus pandemic and its ramifications with 93% of the companies surveyed by the Chamber of Commerce and Industry (GZS) reporting serious difficulties. The chamber estimates a stimulus package of up to 4 billion euro is needed to avert an economic and social crisis.

"The situation at businesses is getting more alarming by the day," the GZS stated on Monday as it released the results of a survey conducted last week among micro, small, medium-sized and large companies.

Four out of ten companies estimate their revenue will drop by more than 70% in March due to disruption to business caused by coronavirus, a further 18% expect to halve their revenue and as many project a fall of at least 30%.

Micro and small businesses have been particularly hard hit with half of them expecting more than a 70% fall in revenue.

Current estimates show more than half of the companies surveyed expect a slump in business over the next three to six months and one out of three expect a limited scope of operations to persist for more than six months.

A large majority (61%) have been hit hardest by a drop in domestic demand and government measures banning direct sale of goods and services to customers, suspended public transportation and school closure (59%).

Over a third (37%) report difficulties due to lockdowns and similar restrictions in other countries, and almost as many (35%) say they have been affected by a drop in foreign demand.

Other problems reported by the companies surveyed include disruption to international transport (29%) or disrupted supply chains (20%). Some are complaining about a lack of protective equipment.

"Fact is that we have already moved from a health crisis deeply into an economic crisis. Experience suggests that a health crisis takes about two and a half months. In a similar scenario in Slovenia the epidemic jeopardising people's lives could be weathered by roughly mid-May," the chamber said.

It added that the decisions that were being taken by the government these days would decide how deep and how long the economic crisis, and hence the scope and length of social turmoil.

Businesses expect the state to fully cover the cost of the temporarily laid off labour force, defer tax liabilities, take measures to secure liquidity and labour market flexibility, set up a one-stop shop offering topical info for companies, ensure smooth movement of goods across the border and measures to secure claims in some markets.

The GZS estimates that for the Slovenian economy to remain in business and preserve as many jobs as possible liquidity measures of between two and four billion euro are needed, urging the government to draw up a new emergency package.

The chamber has sent its list of proposals to the Ministry of Economic Development and Technology.

The GZS has also joined a group of several other business associations, including the Slovenian-German Chamber of Commerce, the British-Slovenian Chamber of Commerce and AmCham Slovenia, who called for fast action to help businesses.

The group offered to the government and the crisis busting taskforce headed by economist Matej Lahovnik "all the expertise that Slovenian managers, entrepreneurs and economic and management experts can offer".

The calls come as a growing number of business are suspending or scaling down their operations to the minimum. The latest to announce a temporary closure of its 18 shops across the country has been the Croatian bakery chain Mlinar.

The glassworks Steklarna Rogaška reduced its production to 7% capacity because it cannot halt the melting furnace without long-term consequences. The decision was taken in agreement with its owner, the Helsinki-based Fiskars Group, the trade union and the works council.

The Zreče-based tool maker Unior has reduced production as well, but is still meeting its obligations to buyers, and business is continuing as usual in the division catering to the automotive industry.

Second emergency package taking shape, hints at help for self-employed

STA, 23 March 2020 - The government will discuss Monday evening guidelines for a new emergency package to mitigate the impact of the coronavirus epidemic on the population and the economy. The guidelines, which include pay bonuses for workers in critical sectors, will be presented on Tuesday and include aid to the self-employed, PM Janez Janša announced.

Janša said the guidelines, to serve as a basis for legislation the government wants to adopt by this Friday, had been coordinated by the coalition parties last Friday and were now supplemented with proposals by ministries and the advisory task force led by economist Matej Lahovnik.

The pending new measures announced last Saturday include 10-200% pay bonuses to those working in critical sectors such as healthcare, civil protection, security and critical infrastructure, as well as a temporary 30% pay cut for all state officials.

Employers in the private sector will be advised to secure bonuses for hard-working staff, in particular in groceries.

In a tweet published today, Janša added the "guidelines will include solutions for aid to the self-employed", a measure that many argued was lacking in the first emergency package adopted by parliament last week.

According to Janša, the basic idea of the package will be freezing the state of affairs. Thus the government will secure the funds needed "to preserve jobs, social stability, economic capacity, public service, potential in science, culture...in society in general".

On Saturday Janša announced a crisis bonus for pensioners and other vulnerable groups and compensation for companies that had to close shop because of the epidemic.

The government plans to define a model for determining the damage suffered by businesses as a result of the epidemic and lay down a reimbursement framework.

In the night to Friday last week, parliament passed the first package of emergency laws. The measures included pay compensation for temporary lay-offs, loan payment and tax duty deferrals for companies, as well as trade restrictions for agriculture and food products. One act gave the government complete discretion over the allocation of budget funds.

23 Mar 2020, 15:19 PM

You probably first heard of Viberate a few years ago, when it got written up along with the wave of blockchain companies based in Slovenia, with its key selling point being “music”. But while most of those of other start-ups failed to deliver on their promises, and many have simply disappeared, Viberate continues to develop and grow, with over 100 people working around the world on a variety of projects.

These are all based on a love of music, an understanding of the data associated with the business, and the value that can be added from analysing and applying it. In addition to working with industry professionals in the "live part" of the business (meaning musicians, festival organizers, venues, event promotors), Viberate also offers the Tonight Nightlife Guide app (Android and IoS), which in less viral times helps you plan a top night out in the various party cities of Europe, and a service to help music festivals develop their own apps. In short, it’s an exciting company, based in Ljubljana and going out into the world, one that’s well worth checking in on if you haven’t done so in a while.

Stay home and party with Umek, Slovenia’s own superstar DJ and one of Viberate’s founders

But why are we writing about a company that helps promote live shows when there are no live shows being planned? That’s because the good folk at Viberate, true to their flexible and dynamic origins have wasted no time to adapt to the new reality. They’ve set up Sick Festivals, a website that tracks which music festivals around the world have been cancelled or postponed, covering events in Europe, Asia, the Americas, Africa and Oceania. You can find it here, and in doing so reintroduce yourself to a Slovenian business that can help you plan your next big night out, whenever that is. And if you’re part of the live music industry then why not follow them on Facebook and keep an eye out some new solutions and features that Viberate is developing to help soften the impact of the current situation, which we’ll also report here when ready for release.

23 Mar 2020, 13:32 PM

STA, 23 March 2020 - The coronavirus crisis will have a huge impact on Slovenia's and Europe's economies and monetary policy measures will be commensurate to the gravity of the situation. Equally important will be decisive and fast fiscal policy action, Boštjan Vasle, the governor of Slovenia's central bank, told the STA.

"It is clear at this moment that the effects of coronavirus on our economic growth will be enormous," Banka Slovenije governor Vasle said, adding that estimates about the scope of the contraction will only be possible once the health situation calms down.

Vasle said monetary policy measures in the eurozone had been taken with the awareness of how serious the situation is. "Their most important message is that they are adjusted to the scope of damage that will occur. This will remain so in the future."

The European Central Bank (ECB) and national central banks in the Eurosystem have increased asset purchases in the framework of existing programmes and added a EUR 750 billion asset purchase instrument last week.

"Add together the value of these measures and we're talking about almost a thousand billion euro at the level of the eurozone. For comparison, Slovenia's GDP is around EUR 46 billion."

This is a clear signal that monetary policy is aware of the gravity of the crisis and that central banks are capable of fast and effective action. The ECB's governing council will keep a close eye on the situation and use all instruments at its disposal for additional action if necessary, he said.

If the response to this health crisis is to be successful, coordinated action of all economic policies in a country is necessary along with concerted action by domestic and EU institutions.

The ECB's governing council therefore believes that fiscal policy must respond with equal determination and perhaps even more decisively than monetary policy, according to Vasle.

"Slovenia must bear in mind the experience of the previous crisis. This experience says countries which had reacted fast were more successful and in some cases subject to fewer of the restrictions that were put in place after the initial period of action."

Slovenia's fiscal policy action is constrained by a constitutional fiscal rule. The government has repeatedly said it would take advantage of the built-in flexibility of the constraints and Vasle likewise noted that the existing rules have exemptions for extraordinary circumstances. "It would not make sense not to take advantage of that."

Turning to the state of the Slovenian banking system, Vasle said that banks were in better shape than they had been when the financial crisis erupted.

They are sufficiently capitalised and the structure of their financing is significantly different in that it is based on deposits; equity is seven times the size of non-performing loans, which improves resilience to the current shock.

Neither do banks have packages of non-performing loans on their portfolios - which had been a part of the reason why the previous crisis was so deep - while companies are financially stronger and better equipped to absorb the crisis.

Overall the liquidity of the banking system is good, with EUR 5.7 billion in primary liquidity and EUR 7.7 billion in secondary liquidity that banks may activate by selling liquid investments or by leveraging them for monetary policy measures.

"Despite the good starting point, the crisis will of course reflect on banks as well," said Vasle, adding that the impact would strongly depend on the duration of the extraordinary circumstances and the effectiveness of mitigation measures.

The fundamental objective of Banka Slovenije action within the eurozone system and in the framework of cooperation with the government is therefore to design measures that will make it possible to quickly overcome the crisis and return back to normal operations as soon as possible.

The Slovenian parliament last week passed an emergency law deferring loan payments. Banks will be obligated to grant creditors deferral, which Vasle said would eliminate uncertainty among companies and households as to how they can act in the event they are unable to meet their loan obligations.

Asked about the financial impact of this measure on banks, Vasle said it would depend on how the pandemic develops and how long it lasts. Banka Slovenije has tested even exceptionally unfavourable scenarios and determined that even in this case the measures would be financially acceptable.

But Vasle stressed that this was merely the first tier of action as coordination efforts were already under way at eurozone level to make sure such deferral of interest and principal payments do not affect bank operations.

"It is important here to assure all banks that the measures which they adopt during the crisis will affect all eurozone banks the same way. This is the only way to avoid banks in an individual country having an advantage," he said.

The third tier of action involves additional guarantees that the state could provide, for example via SID Banka, the Slovenian export and development bank, which would additionally reduce uncertainty for the people and companies.

"It is my estimate that a solution will soon be presented to the public. At this moment a legislative solution that would make this possible is already being prepared."

All our stories on coronavirus and Slovenia are here

23 Mar 2020, 09:16 AM

STA, 18 March 2020 - The Italian owners of the Slovenian subsidiary of the banking group Unicredit confirmed on Wednesday the allocation of EUR 22.8 million out of EUR 45.1 million in last year's distributable profit for dividends, meaning EUR 4.67 gross per share. The remainder will remain undistributed.

The Unicredit shareholders were also notified of the supervisory board changes - the term of five supervisors is to expire on 4 April, Pasquale Giamboi and Andrea Cesaroni will remain on the board for another term, while other three supervisors will be replaced by Enrica Rimoldi, Giorgiana Lazar O'Callaghan and Fabio Fornarolli.

Unicredit Slovenia also endorsed a multi-annual development plan for the period up to 2023 at today's meeting.

Last year, Unicredit Banka Slovenija and Unicredit Leasing generated EUR 79 million in operating revenue, a 0.5% increase year-on-year. Meanwhile, net interest revenue dropped by 8.2% to EUR 46 million compared to 2018.

The Italian banking group Unicredit generated EUR 3.4 billion in net profit, down almost 18% year-on-year. The group's revenue saw a downturn as well, with the management attributing poorer business results mostly to a drop in net interest revenue.

17 Mar 2020, 14:54 PM

STA, 17 March 2020 - Boxmark Leather, the Kidričevo-based maker of car upholstery, plans to launch production of protective face masks for Slovenia next week. CEO Marjan Trobiš told the STA on Tuesday the launch of production depended mainly on the supply of material, the machines are ready.

"At the moment, the demand is the highest for masks, since there are thousands of people who need to wear them for protection and self-protection at work. Every country is protecting its interests and does not allow exports of these products, so we decided to help our country," Trobiš said.

Boxmark will produce the masks for the state only, not for the market, he added.

The company plans to use all the material that will be delivered but Trobiš could not tell how many masks that meant.

In the coming days, a large part of other production lines, for textile, and automotive and aviation industries, will grind to a halt, so all resources will be used to make protective gear for the state.

The company has introduced several protective measures during the coronavirus epidemics. It has reduced its production capacity by some 30%. The most vulnerable groups of workers, including the elderly, those with chronic conditions and mothers of small children were temporarily sent home.

"The safety of the people comes first, so we will step up the measures this week and send more people home. Thus we will maintain sustainable production, but if supply chains do not allow us to work we will systematically cease operations," he said.

Companies with hundreds of employees cannot close overnight, Torobiš said, noting that preparations for the epidemic had been under way at the company for a month so as to be able to stay in business after the epidemic.

Boxmark, which is in foreign ownership, announced restructuring at the beginning of the year, with measures affecting 900 employees. Recently more than 200 workers were made redundant and more redundancies were planned by the end of April, when the process was expected to wrap up.

All our coronavirus stories are here

17 Mar 2020, 09:12 AM

There’s a petition going around to encourage the government to provide help for the self-employed, and specifically those making less than €20,000 a year, and those making less than the minimum salary. It’s easy to sign, has drawn a lot of attention and may already be having an effect. As of last night (16 March) the news was “the Economy Ministry is preparing measures to help self-employed affected by the coronavirus epidemic in Slovenia as part of a bill to subsidy pay of temporarily laid-off employees. Social security contributions payments for sole proprietors are to be deferred” – with the full story here.

So things look good, but if you think this is a worthwhile initiative then why not add to the pressure by clicking here and adding your name. The accompanying text is in Slovene, but plays well with Google Translate, as seen below:

There are more than 100,000 self-employed in Slovenia, which is more than 12% of the working population. With the crippling public life and economic downturn, many of them have already been hit hard by the coronavirus epidemic, as they have lost their jobs, which will also cause them difficulties in settling compulsory social security contributions.

We appeal to the Government to take immediate action with two forms of assistance from 1 March 2020 until the official declaration of the end of the epidemic and the restoration of public, economic and cultural life.

1. Exemption from the payment of compulsory social security contributions

Self-employed persons should be exempt from compulsory social security contributions in the amount of the statutory minimum.

For the criterion, we propose   that those who earn less than € 20,000 throughout 2020 should be eligible for the exemption from payment of minimum social security contributions. Those who earn more will pay back the income tax return.

2. Assist those who have suddenly lost their jobs

Some self-employed people are left without a means of survival and need help.

For the criterion, we suggest:   if they earned less than the net minimum wage last month, the state should provide them with assistance in the form of coverage of this difference. 

Wishing you all, both the government and the healthcare system and society, to successfully tackle the threat of danger, and to bring people together in support, compassion and cooperation, we welcome you.

Again, you can add you name here

13 Mar 2020, 10:18 AM

STA, 13 March 2020 - The energy group Petrol last year generated sales revenues of EUR 4.4 billion, which is 1% more than in 2018, while net profit was up by 15% to EUR 105.2 million, the parent company said in a press release on Friday as it presented the annual report.

The group last year posted EUR 472.9 million in adjusted gross profit, up 7% year-on-year, while earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 9% to EUR 196.5 million.

The net debt-to-EBITDA ratio at the end of 2019 was 1.8, up from 1.7 at the end of 2018.

It sold 3.7 million tonnes of petroleum products in 2019, 6% more than in 2018, at a total of 509 of its service stations.

The group operated 318 stations in Slovenia, 110 in Croatia, 42 in Bosnia-Herzegovina, 14 in Serbia, 14 in Montenegro and 11 in Kosovo at the end of last year.

The group also sold 21.5 TWh of natural gas, 176,400 tonnes of liquefied petroleum gas, 22.6 TWh of electricity and 145.8 thousand MWh of heating energy. No comparisons with 2018 were provided.

Revenues from sales of merchandise and related services meanwhile amounted to EUR 466.5 million in 2019, on a par with 2018.

The report notes that 13% of EBITDA last year was generated with energy and environmental solutions, with the "production of electricity from renewable sources gaining in importance".

The plan for this year is to EUR 6.4 billion in sales revenue, EUR 510 million in adjusted gross profit, EUR 214.8 million in EBITDA, EUR 109.8 million in net profit, and the net debt-to-EBITDA ratio at 1.7.

Sales of petroleum products in 2020 are expected to amount to EUR 3.4 million tonnes and sales of merchandise and related services at EUR 467.6 million.

The current strategy is valid for until 2022, but the new management, appointed earlier this year, has announced that a new strategy until 2025 will be drafted by the summer.

As for the coronavirus outbreak, Petrol said that "there have been no disruptions to our operations so far", adding that "action plans are in place to ensure energy product supply should the situation deteriorate."

The annual report was discussed by the supervisory board on Thursday. "In 2019 the Petrol group performed very well, exceeding the set targets," the board said in today's press release.

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