Business

30 Nov 2018, 10:20 AM

STA, 29 November 2018 - The first reading in the National Assembly of a bill raising the minimum wage by overhauling the way it is calculated indicated that the changes, proposed by the opposition Left with the tentative support of the coalition, are likely to be watered down somewhat during the adoption process.

While all parties agreed the minimum wage, currently at EUR 638 net, was too low, they mostly found issues with the bill.

The motion, coming after basic welfare allowance went up from EUR 297 to EUR 393 earlier this year, would increase the minimum wage by roughly 5% in 2019 and just as much in 2020. In 2021 it introduces a calculation formula that would keep it 20% above minimum living costs.

The main objection raised on Thursday by most coalition parties and the government as it held a correspondence session had to do with to the timeline of the raise, which is closely linked to the exclusion of individual bonuses and allowances from the calculation of the minimum wage.

"A predictable business environment is crucial for the economy in Slovenia, which is why the minimum wage needs to be raised in a well though-out, predictable and gradual way. When considering predictability, it is inappropriate that changes adopted in December 2018 already enter into force in January 2019," the government wrote.

All our stories on Slovenia’s minimum wage are here

It highlighted the need to phase out the bonuses - employers have been including various bonuses into the minimum wage - gradually, arguing "this would give the public as well as private sector enough time to adjust".

While asserting it was in favour of the goals of the proposal, the government reached out to employers, who have been complaining the changes were drafted without social dialogue.

It said that "it would make sense when searching for the most appropriate solutions in the next stages of the legislative procedure to consider social dialogue to the highest extent possible and adjust the enforcement's dynamics for individual solutions".

The proposal in general was rejected only by the opposition New Slovenia (NSi), whose Jožef Horvat said the rise would disrupt the balance of the wage scale, and by the opposition Democrats (SDS) whose Karmen Furman identified a misguided wage policy combined with a misguided social transfers policy as the reason for this disruption.

The two parties also highlighted the absence of social dialogue, while Jerca Korče of the senior coalition Marjan Šarec List (LMŠ) said the Economic and Social Council had had a number of opportunities to discuss a higher minimum wage.

"I have the feeling that the time will never be right for this debate," she said, also rejecting accusations that an effort was under way to revive "an outdated social model" and to meddle in the economy.

"The state has to see the whole picture, which is comprised of both business and the recipients of the minimum wage. Because the wage did not increase on its own, politics assessed it was time to intervene," she said.

Joining the Left in supporting the changes in their current form was the opposition National Party (SNS), whose Dušan Šiško was however simultaneously critical of the raised welfare allowance.

In the end, the bill was endorsed in a unanimous vote with the SDS and NSi abstaining.

Related: Find out the average pay for various jobs in Slovenia

29 Nov 2018, 12:50 PM

STA, 27 November 2018 - MPs failed to pass in a re-vote on Tuesday a reform bill on real estate agencies which was to improve the legal certainty of consumers as well as realtors. The upper chamber vetoed the motion in March, claiming that it excessively regulated the field.

While today's vote ended 42:10 in favour of the bill, absolute majority of 46 out of 90 MPs would have been needed in the re-vote.

Only four of the five coalition parties supported the bill, while the Alenka Bratušek Party (SAB) did not present its view.

The Marjan Šarec List (LMŠ), SocDems, Pensioners Party (DeSUS) and the Modern Centre Party (SMC) said that the bill would protect consumers and provide for the legal safety of all stakeholders on the real estate market.

But the opposition parties New Slovenia (NSi) and the National Party (SNS) agreed with the objections to the bill voiced by real estate agencies, who argued that the bill would restrain agencies too much.

In contrast, the opposition Left opposed it for allegedly not bringing enough regulation.

All our real estate in Slovenia stories are here

The opposition Democrats (SDS) did not present its arguments.

The National Council, the upper chamber of parliament, vetoed the bill in March at the initiative of a group of councillors led by Mitja Gorenšček, the executive director of the Chamber of Commerce and Industry (GZS).

The bill was initiated by the GZS's real estate agencies section but after it was amended at parliamentary committee level, the group turned against it, saying that it envisaged excessive regulation by capping the provision in real estate deals with individuals at 4% (which is in line with the existing law), by limiting provisions in rental deals to one-month's rent and by setting the maximum costs in case of no deal at EUR 150.

29 Nov 2018, 10:20 AM

STA, 27 November 2018 - Foreign-owned high-tech companies RLS and Bosch Rexroth, airport operator Fraport Slovenija and logistics firm Cargo-Partner have won the Invest Slovenia FDI Award to become this year's best foreign investors in their respective categories.

The awards were given out by the SPIRIT agency in Brdo pri Kranju on Tuesday evening, rewarding excellence in R&D and business results; long-term presence in the region; the best employer; and a new greenfield investment into a logistics centre.

RLS (website), a Komenda-based producer of advanced magnetic rotary and linear motion sensors, received the award in the category of R&D and excellent business results.

In 2017, the company had 135 employees and posted a revenue of EUR 21m, up 18% on 2016, with value added per employee at EUR 99,000.

The company, set up by director and co-owner Janez Novak in 1990, has been co-owned by Great Britain's Renishaw, a world leader in metrology since 2000.

Bosch Rexroth (website) from Škofja Loka, which is part of Germany's group Bosch Rexroth AG, won the award in the category of long-term presence in the region.

The company develops innovative solutions for new mobile services for industry and households, and has been present here since 1998, when the foreign investor, at the time known as Mannesmann Rexroth, set up a company in Železniki.

Last year, it posted EUR 40.5m in revenue, of which 99% was generated abroad, and a net profit of over EUR 1m, boasting value added per employee of EUR 40,400.

The best employer in the region is Fraport Slovenija (website), the company from Germany's Fraport Group operating Ljubljana's international airport.

Since it acquired Slovenian airport operator Aerodrom Ljubljana in March 2015, Fraport AG has significantly improved business results and started hiring new staff.

With more than 400 workers in 2017, it was one of the largest employers in the region of Gorenjska, north-west, and is planning further hirings.

A special mention for a new greenfield investment into a logistics centre went to logistics company Cargo-Partner (website) from Ljubljana, which is part of the Vienna-based Cargo Partner group.

Having entered Slovenia in 2005, the company launched a EUR 25m investment into the logistics centre in Brnik near Ljubljana airport in August, which is the largest investment at the group level so far.

With 90 employees, Cargo-Partner generated almost EUR 34m in revenue in 2017, with its value added per employee at EUR 45,500.

Foreign investment in Slovenia reached EUR 13.7bn in 2017

Eligible for the award were companies with at least 50 employees which had not cut workforce in the past year and which had generated at least EUR 35,000 in added value per employee.

The companies had to be in majority foreign ownership, had to operate with a profit and had to have all their tax obligations settled.

The awards have been conferred together with the Ministry of Economic Development and Technology since 2006 as part of a national strategy to attract FDI.

FDI in Slovenia topped EUR 13.7bn at the end of 2017, up 5.4% over the end of 2016, accounting for 32% of Slovenia's GDP, which is still 25 points below the EU average.

27 Nov 2018, 10:20 AM

STA, 26 November 2018 - Port operator Luka Koper reported on Monday a nine-month net profit of EUR 49m, which is a 22% improvement on the same period last year. Net sales revenue was up 6% to EUR 168m.

Excluding the EUR 9.1m compensation received over damage to a bridge crane caused by a ship during a storm, the January - September 2018 net profit would amount to EUR 40.9m, a 3% year-on-year improvement, the company pointed out.

The group's operating profit (EBIT) rose by 29% to EUR 57m or by 8% to EUR 47.4m when discounting the mentioned one off event.

The core company recorded EUR 165.5m in revenue, a 7% increase, net profit rose by 22% to EUR 47.7m, EBIT by 30% to EUR 55.8m and EBITDA by 22% to EUR 77.2m.

Transshipment in the port was just under 18 million tonnes, which is on par with the first nine months of last year. March saw a monthly record of 2.3 million tonnes.

Luka Koper had a workforce of 1,217 at the end of September, a 11% increase on a year earlier.

It spent EUR 9.5m on investment at the level of the group.

All our stories on Luka Koper port are here

26 Nov 2018, 14:20 PM

STA, 25 November 2018 - The Kidričevo-based group Talum, which is increasingly adding production of ready-made products to the principal activity of aluminium production, expects good business results this year despite the turbulent and unpredictable situation on the global market, chairman Marko Drobnič has told the STA.

According to him, the conditions in the aluminium industry globally have been extremely dynamic and unpredictable this year, both in terms of supply of raw materials as well as their prices.

He said the situation had never been this tough before.

Drobnič attributed this to the relations between the US, Russia and China, most notably the US's sanctions against certain Russian companies, its introduction of customs, and environmental restriction on production in China.

A focus on greater added value

Talum had to respond quickly to the growing prices of the raw materials used in the production of primary aluminium, especially aluminium oxide.

Since the production of aluminium in Europe will become a relatively sensitive matter given the circumstance, Talum's strategic goal since 2012 has been to raise the value added of its products.

The new business strategy for 2018-2022 also follows this guideline. According to Drobnič, the emphasis will be on sustainable development, renovation and optimisation of business processes and digitalisation.

"I see great potential for development in innovation. A key priority is also to train staff to be able to respond to changes, given the developments outside that are extremely dynamic and unpredictable," the CEO said.

Talum expects revenue to reach some EUR 360m at the end of the year, which is 3% more than in 2017. Profit is expected to be somewhat lower, at EUR 1.5m.

The group currently employs 1,500 people, which is 125 more than at the end of 2017.

The company's Engish website is here

26 Nov 2018, 11:45 AM

STA, 24 November 2018 - The state budget generated almost one billion euro in revenue from the privatisation of state assets in the last six years, with the recent sale of a 65% stake in the NLB bank actually representing the bulk of it. Among the most profitable years were also 2014 and 2016, when the state sold some major investments.

With the share of the country's largest bank sold at EUR 51.50 at the recent IPO, the state received the proceeds amounting to EUR 609m.

Funds raised used to reduce debt and grow a demographic fund to pay for pension system

"The proceeds from the sale of the capital investment in NLB have been transferred to the budget and used for repayment of debt in accordance with the public finance act," the Finance Ministry has told the STA.

More than EUR 540m or 90% of the proceeds have been earmarked for debt repayment, and the remaining 10% have been transferred onto a special account of the ministry.

The money will be reserved for the planned independent demographic fund, which is a response to the demographic changes and which looks to ensure long-term stability of the pension system.

The special account for the demographic fund has been holding ten percent of the proceeds from all privatisation deals since April 2014, when the law on Slovenian Sovereign Holding (SSH), the custodian of state assets, entered into force.

A total of EUR 97m has been collected on the account so far.

Since 2013, when the National Assembly confirmed a list of 15 companies for privatisation, the national budget has received a total of EUR 983.7m in proceeds.

Before the SSH law entered into force, all proceeds were spent for repayment of debt, which stood at EUR 31.8bn at the end of last year.

Due to the economic growth Slovenia has been recording in the recent years, its share in the country's GDP has been decreasing, standing at 74.1% at the end of last year.

The recent history of privatisation in Slovenia

The first companies to be privatised were coatings maker Helios in October 2013 and medical laser maker Fotona in January 2014, followed by car electronics maker Letrika and Ljubljana airport operator Aerodrom Ljubljana.

Proceeds from the privatisations completed in 2014 amounted to EUR 119m.

In mid-2015, the state-owned owners of sports equipment maker Elan sold the company for a symbolic sum, with the new owners, Bank of America Merrill Lynch and Wiltan Enterprises, securing EUR 12m as a return of state aid received in 2008.

Aircraft maintenance company Adria Airways Tehnika was also sold in 2015 to the Polish Linetech Holding for around EUR 1m.

In the same year, the US investment fund Apollo and the European Bank for Reconstruction and Development bought NKBM, the second-largest bank in the country, for EUR 250m, while bread and pasta maker Žito was acquired by Croatia's Podravka.

The privatised companies from the list also include car parts maker Cimos, tissue maker Paloma, and airline Adria Airways.

All our stories on privatisation in Slovenia are here

23 Nov 2018, 12:50 PM

STA, 23 November 2018 - Mercator, Slovenia's largest retailer, posted a group net profit of EUR 9m for the first nine months of 2018, which compares to a EUR 10.5m loss in the same period last year, as sales rose by 1.6% to EUR 1.62bn.

Profit before income tax, depreciation and amortisation (EBITDA) rose by a quarter to EUR 87m, with operating profit (EBIT) surging by 157% to EUR 36m, the company said in an interim financial report released on Friday.

The improvement was driven by retail sales, which rose by 5.4% to EUR 1.2bn. "A new strategy, new store concept, store refurbishments and improved competitiveness of services are driving positive results in the core business," the company said.

On its key Slovenian market, retail sales improved by 0.5% despite what the company said was a significant reduction in store surfaces.

By the end of September, the group reduced its net financial debt by a tenth to EUR 738m, with the debt-to-EBITDA ratio going from 16 to 7.2.

Investments in fixed assets were almost halved to EUR 19m.

The number of employees dropped by more than 2% at group level to 20,322.

The core company saw sales improve by less than a percent to EUR 880m, while net profit remained flat at EUR 14.7m.

The financials do not yet account for the monetisation of real estate agreed in October, when Mercator concluded a sale and leaseback agreement with Austrian developer Supernova involving ten malls and worth EUR 117m.

Related: How to get a Mercator Pika card

21 Nov 2018, 11:50 AM

STA, 20 November 2018 - Small and medium-sized enterprises in Slovenia generate 65.1% of added value and 73.4% of jobs in the non-financial sector of the economy, which is above the EU average, according to the annual report from the European Commission. The annual productivity of these companies was however almost 25% below the EU average.

According to the 2017/2018 annual report on European SMEs, Slovenian SMEs in the non-financials sector recorded a steep growth between 2013 and 2017.

Their added value was up by 33.4%, and number of employees by 5.6%, which is well above the performance of large companies in this department.

In the 2016-2017 period, added value generated by SMEs was up by 8.8%, which was the largest annual increase since 2008. Employment in the same period was up by 2.9%, which is also the largest increase since 2008.

Forecast remains positive for SMEs

The outlook for SMEs and the non-financial sector in Slovenia as a whole remains positive. Added value generated by SMEs is expected to increase by 11.6% in the 2017-2019 period, and employment by 0.6%.

According to the European Commission, the main challenge for Slovenia is still the shortage of qualified staff. It sees a solution in closer ties between the economy and the education system.

The Commission also thinks that Slovenia should find alternative sources of financing, especially for fast-growing companies which deal with innovation. It also calls for further reduction of administrative barriers.

The report, published on Tuesday, coincides with the 2018 SME Assembly, which is taking place in Austria's Graz between Monday and Wednesday. The European Enterprise Promotion Awards will be conferred there this evening.

19 Nov 2018, 14:25 PM

STA, 16 November 2018 - The Supreme Court has reversed a decision in favour of Swiss franc borrowers, as it ordered a retrial in a case in which the Higher Court sided with the borrower's claim that he had not been forewarned about possible appreciation of the currency. The case was reported by the Bank Association of Slovenia on Friday.

This is one of the cases related to the by the Swiss central bank in 2015 to stop defending the value of the franc against the euro, which led to a surge in the value of the franc against the euro.

The affected borrowers in Slovenia have been trying to reach a systemic solution, including through the Franc Association, which is lobbying for a special law. In the meantime, courts are processing individual cases.

The key issue: Should Banka Slovenije have foreseen Swiss franc appreciation?

The particular case had been rejected by the court of first instance, while the Higher Court changed the ruling by completely upholding the claim by the borrower and finding the contract null and void.

According to the newspaper Delo, the case involves the Austrian-owned bank Banka Sparkasse.

The Bank Association of Slovenia, which advocates the case-by-case basis, argued today that the Supreme Court said the consequence of the bank failing to forewarn the borrower could not be the basis for annulling the contract.

The court added that when assessing loan contracts in Swiss francs, courts should take into account that the Slovenian consumer legislation at the time did not precisely regulate the mechanism of informed consent.

The Supreme Court added that an absence of loan calculations in any case must not be a decisive factor, according to the Bank Association.

The court has also confirmed that the central bank, Banka Slovenije, had not been able to project in its publications that the Swiss franc will appreciate, which had happened in 2011 and 2015. It is not possible to make reliable and precise forecasts regarding the period and extent of the change of currency exchange rate, it added.

While the impact of certain factors is predictable to a certain extent to experts, no expert could have predicted a unilateral measure such as that by the Swiss central bank in 2015, which had a decisive impact on the Swiss franc exchange rate, the association also quoted the court as saying.

16 Nov 2018, 11:50 AM

STA, 15 November 2018 - Samo and Iza Login, the founders of tech firm Outfit7, top the list of the 100 richest Slovenians, compiled by Manager magazine, for the fifth year in a row. Their assets are estimated at EUR 689m, while total assets of the top 100 have been estimate at EUR 5.7bn, a new record and 10% more than last year.

The Logins are the principal founders of the company best known for its globally successful app Talking Tom, which they sold to the Chinese United Luck Group for US$1bn in January 2016.

The couple has transferred the proceeds from the sale to a family non-profit charity organisation, which looks for solutions for global environmental problems, said the newspaper publisher Finance, which publishes Manager magazine.

Following the Logins is Sandi Češko, the owner of multichannel retailer Studio Moderna, with EUR 334m, and Marko Pistotnik, one of the former owners of Outfit7, with EUR 210m.

€24.2m gets you to the bottom of the Richest Slovenians list

Also in the top five are Joc Pečečnik, the owner of gaming products provider Interblock, with EUR 194m, and Tatjana and Albin Doberšek of the Germany-based Engineering Dobersek, with EUR 183m.

With total assets of the top 100 breaking a new record this year, the threshold for making it to the exclusive company was also up to EUR 24.2m from EUR 20.4m last year.

This year's list features five newcomers and five individuals or families who have returned to the top 100.

The highest-ranking newcomer is Izet Rastoder, the owner of the banana trading company, Rastoder, who ranks 40th with EUR 36.2m.

The property Manager takes into account in compiling the list is majority stakes in companies or co-ownership.

Since many Slovenian businessmen have sold their companies over the past few years, the share of the proceeds from the sales in the total property of 100 richest Slovenians has been increasing to reach around 25% this year, Finance explained.

14 Nov 2018, 17:31 PM

STA, 14 November 2018 - NLB shares were listed on the Ljubljana and London stock exchanges on Wednesday, bringing the sale of 65% of Slovenia's leading bank via an initial public offering (IPO) to an end. By selling NLB, Slovenia has partly met its commitment to the European Commission to sell 75% minus one share in exchange for a bailout in late 2013.

As the state has retained a controlling 35% stake, US financial fund Brandes Investment Partners (7.6%) and the EBRD (6.3%) have emerged as the two largest private owners.

The state has sold almost 12 million shares or 59.1% of all shares of NLB at €51.50 per share to get almost €609m, but taking into account an over-allotment option the stake could increase to 65% (€669.5m).

The seller is making an additional 1.18 million NLB shares available pursuant to the over-allotment option. The shares will be kept on a separate fiduciary account and be made available 30 days after the listing to make deals to stabilise the price.

"We remain a Slovenian banking group," NLB chairman Blaž Brodnjak said at today's listing on the Ljubljana Stock Exchange (LJSE), which was accompanied by symbolic bell-ringing when trading opened in Ljubljana at 9:15 AM.

The bank's shares have also been listed in the form of financial instruments known as GDR on the London Stock Exchange. NLB has become the first Slovenian joint-stock company to be listed in London.

"The head and heart of NLB remain in Ljubljana," said Brodnjak, adding that a new era was beginning for the bank, as "we have been very limited in our operations for five years", referring to the restrictive measures set down by the Commission.

Under the commitment to the EU, Slovenia has to sell another 10% of NLB by the end of 2019. Until then, the bank will be subject to a set of measures the Commission has imposed to make sure NLB is not in a more favourable market position than its competitors.

Once all limitations are lifted, it will be a "great privilege and great responsibility" for the bank, Brodnjak assessed, labelling today's listing as "the most important day in the bank's history".

Until the end of 2019, the bank is banned from making acquisitions, having aggressive advertising campaigns and performing leasing services.

Moreover, since the stake sold this year will be less than 75% minus one share, the bank will also have to start procedures to sell NLB Vita, its insurance subsidiary.

Brodnjak however hopes that it will be possible to negotiate with the European Commission the elimination of the remaining limitations and requirements. He noted that European Commissioner for Competition Margrethe Vestager will pay a visit to Ljubljana soon.

He believes that under a majority private ownership, the bank will develop in the sense of corporate management and freedom of operation. The bank is in a very good shape and is a systemically important institution in another five countries.

The group is also present in Serbia, Montenegro, Bosnia-Herzegovina, Kosovo and Macedonia, and the bank will now be vying for the "title of a regional champion", for which it has potential as it is familiar with the history and culture of the region.

Finance Ministry State Secretary Metod Dragonja said that with the transaction, Slovenia had met the first, most important commitment to the European Commission.

"Slovenia has clearly shown that it respects the commitments given. The credibility that the state has gained by doing so will make a positive impact on the state's and bank's credit ratings," he added.

Lidija Glavina, the chairwoman of Slovenian Sovereign Holding (SSH), said that SSH would continue with the sale of the remaining shares by the end of 2019.

"Despite the very demanding situation on financial markets, internationally renowned financial investors have decided to buy," she said, adding that NLB nevertheless remained "an independent Slovenian financial institution".

SSH will be able to sell the remaining stake after a six-month moratorium. There will be no price range and procedures will be simplified. "We will be waiting to get the maximum out of it," Glavina announced.

LJSE chairman Aleš Ipavec added that it was "an important day for the Slovenian capital market", while he did not wish to comment on the price of the share.

"Some are not satisfied as it is allegedly too low. But the market will show soon how much the share is really worth," he added.

The listing ceremony was also attended by representatives of regulators, the financial sector and some companies, mostly those traded in the prime market.

Slightly more than €500,000 in turnover with the NLB shares has been generated so far, with the price standing around €55, which is €4.50 above the price fetched with the IPO.

NLB closed the day’s trading at €56.65, 5.15 above the IPO price.

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