Business
STA, 11 January 2020 - Slovenia has launched SiChain, a blockchain infrastructure platform, to become the first EU country to have a pilot blockchain infrastructure system in place at state level. SiChain technology aims to facilitate blockchain technology use for companies and state agencies, and could be used for document verification as well.
The pilot project, which was launched in December last year, is designed to test blockchain applications by the state, companies, local communities and research agencies.
It is run by the Economy Ministry in cooperation with the EU Commission, with the project's infrastructure being devised by blockchain firm HashNet and telecoms provider Telemach.
The deployment timeline depends on EU Commission-approved pilot projects. As soon as they are given the go-ahead, development of prototype models will start, Telemach has told the STA.
Theoretically, there are three development phases spread across this year. Initially, transaction testing and capacity measurements are to be carried out, followed by a second phase developing more complex applications and expanding the network to the state and international levels.
The third phase is expected to create links between networks and public use.
In general aim is to implement transactions and smart contracts using hashnet technology, a distributed data block technology that is considered energy and time efficient.
SiChain could potentially be used to verify marriage certificates and other documents, standardise student ID cards, for electricity market transactions, and inter-governmental contracts within the EU.
The EU Commission has earmarked EUR 10 million for the project's pilot stage, but the actual figure depends on the proposed and approved project, according to Telemach.
"The total amount which the EU will allocate for the development and implementation of blockchain technology in the next five years, is estimated at EUR 300 million," said the telco.
European Blockchain Services Infrastructure (EBSI) is one of the key European Blockchain Partnership projects, developed by the EU Commission in cooperation with member states and blockchain experts.
All our blockchain in Slovenia stories are here
STA, 9 January 2020 - Luka Koper, the operator of Slovenia's only seaport, generated EUR 224.5 million in net sales revenue last year, a 1% uptick compared to the previous year, preliminary data show. Meanwhile, ship-to-ship transshipment dropped by 5% over 2018 to 22.8 million tonnes, the group announced on the website of the Ljubljana Stock Exchange on Thursday.
Container transshipment stayed level over 2018, while liquid cargo transshipment increased by 12%. On the other hand, bulk cargo transshipment decreased by 17%, vehicle transshipment by 4% and general cargo transshipment by 16%.
Related - Invest in Slovenia: Meet the Companies in the Benchmark Investment Index, the SBI TOP
Luka Koper said that liquid cargo transshipment was record-high in 2019, mainly due to favourable trends in fuel transport and sufficient terminal capacities.
The second half of 2019 was marked by economic cooling, which affected Luka Koper's operations as well, most notably in goods transshipment. Apart from manufacturing slowdown, the situation was made more precarious by trade wars and political conflicts overseas.
All our stories about Luka Koper are here
STA, 8 January 2020 - Slovenia's Financial Administration (FURS) collected EUR 17.6 billion in taxes in 2019, which is by EUR 954 million or 5.7% more than in 2018, its early figures show.
The trend has been present ever since FURS was set up with the merger of the national tax and customs administrations in 2014. Since then its tax collection rose by 29%.
Last year all public budgets - the national budget as well as the municipal, pension and health budgets - posted rises in revenue, with excise duties being one of few major taxes the collection of which dropped (-1.1%).
Social security contributions collected - which provide for pension, disability and health insurance and are largely paid directly to the public pension and health funds, but some also to the national budget - increased by 7.2% to over EUR 7 billion.
FURS also collected by 9.4% more taxes on income and profit; a significant rise of 5.9% was recorded in personal income tax, while corporate tax collected rose by 17%.
The VAT take increased by 2.8%.
FURS pointed out in a press release that last year's 5.7% rise in taxes it collected was higher than Slovenia's GDP growth, which reached 2.7% in the first three quarters of the year.
The national revenue service also said that more than 95% of all taxes had been paid voluntarily last year.
It noted another positive trend of a falling tax debt ever since FURS was established. Last year, it dropped by 3.1% to some EUR 1.2 billion, and by 18% since 2014.
All our stories on taxes in Slovenia are here
STA, 7 January 2020 - The Ljubljana District Court has fully upheld the Competition Protection Agency's decision to temporarily seize Mercator shares from the retailer's owner, Croatian group Agrokor, rejecting the latter's appeal.
The anti-trust watchdog announced the court's decision upon receiving it on Tuesday, while Agrokor's successor Fortenova announced it would use all legal means available to have the seizure annulled.
The agency seized 70% of Mercator shares from Agrokor on 16 December to ensure the insolvent Croatian group pay a EUR 53.9 million fine for failing to notify it of the 2016 takeover of Slovenian-based bottled water company Costella.
Agrokor appealed against the fine as well as against the seizure. The court is yet to rule on the appeal against the fine, which is expected to take more time.
The temporary seizure of Mercator shares suspended the planned transfer of the Slovenian retail group from Agrokor to its successor Fortenova.
Fortenova officials denounced the seizure in December as an attempt by Slovenia to secure better terms for Slovenian suppliers of Mercator, a claim that Slovenia denied.
Economy Minister Zdravko Počivalšek commented on the court's decision by saying that Slovenia was a country ruled by law and that Slovenian legislation had to be respected.
Meanwhile, Fortenova termed the court's explanation unconvincing and legally weak, insisting the agency's decision was arbitrary, unlawful and unconstitutional.
Fortenova noted that Agrokor had notified heads of European and national regulators of the Slovenian agency's contentious conduct in the procedure and of the suspicion that "Slovenian legal and other bodies are preventing transfer of Mercator shares to Fortenova for national political reasons in contravention of Slovenian legislation and EU practice".
Agrokor also notified of the "obstacles it has been meeting with as an investor in Slovenia for the past year" the ratings firms Fitch, Moody's, Standard & Poor's, the World Bank offices in Washington and Brussels and Transparency International in Brussels and Berlin.
STA, 7 January 2020 - Slovenia successfully completed a EUR 1.5 billion ten-year eurobond issue, leveraging market appetite for fixed assets to secure a record-low coupon interest rate of 0.275%. The last bond issue a year ago came with a coupon rate of 1.188%.
The issue was significantly over-subscribed, with orders for EUR 11 billion collected, the Finance Ministry said Tuesday evening.
Invest in Slovenia: Meet the Companies in the Benchmark Investment Index, the SBI TOP
The high demand "confirms investor trust in Slovenia's credit rating and the firmness of the Slovenian economy and fiscal policy," the ministry said.
The bond issue makes Slovenia the first eurozone country to tap the bond market this year and the issue size covers almost the entire planned borrowing of EUR 1.58 billion for 2020.
It comes at a time when investors are looking for safe investments amidst continued global uncertainty, which has been driving down bond yields across the eurozone.
The yield on Slovenia's 10-year benchmarks was just above zero yesterday, according to data on the MTS Bonds.com platform.
The bulk of the latest issue was purchased by fund managers (52%), followed by pension funds and insurers (18%), and banks (14%).
STA, 7 January 2020 - Following some three months of police search, runaway tax debtor Zlatan Kudić was apprehended on New Year's Eve, reportedly in central Ljubljana. One of the biggest tax debtors in the country, Kudić will await the end of his tax fraud trial in detention.
National broadcaster TV Slovenija reported on Tuesday that the Ljubljana District Court, where the trial began in 2013, did not want to reveal when the proceedings will resume since the defence had requested the panel of judges to be excluded, with the court president still deliberating on the issue.
Kudić vanished when the trial was drawing to an end. The former director of the Ljubljana company Maxicon, which went bust in 2012, is standing trial for tax evasion, money laundering and destruction of evidence.
The Financial Administration (FURS) should not hold out much hope of recovering EUR 25 million worth of debt owed by Kudić, said TV Slovenija, since Maxicon was erased from the list of tax debtors upon going into receivership.
FURS could claim the debt via a pecuniary claim in a criminal procedure, but it is questionable whether Kudić formally has any assets left at all.
It is not yet clear where the defendant was hiding from the arrest warrant. His attorney told the public broadcaster that Kudić did spend some time in Slovenia, at least in December.
All our stories about taxes in Slovenia are here
Ex-Yu Aviation reports that passenger numbers are looking up again at Ljubljana Airport, after last year’s collapse of Adria Airways saw Slovenia lose 60% of its international seat capacity, and that the recovery should be further boosted by the business hub that’s developing in the area.
With regard to flights, post-Adria, a growing number of carriers have announced plans to increase the frequency of services offered to and from Ljubljana, such as Aeroflot, Air France, Air Serbia, British Airways, Finnair, Montenegro Airlines, Brussels Airlines, Lufthansa Swiss International Air Lines and Transavia, while the Slovene government is in talks to with three European regional carriers to subsidise flights to and from Frankfurt, Munich, Zurich and Brussels.
Turning to the business hub, a spokesperson for the airport’s operator, Fraport, is quoted as saying: "When you enter the airport, the first thing you notice is the growing Brnik Business District. TNT Express Worldwide, Cargo-partner and Kuehne + Nagel have already set up their own logistics hubs here. UPS Adria Ekspres is building a logistics centre as well, and Iskra Mehanizmi and SchaferRolls are constructing their facilities here too. More than half of the plots are, or will shortly be, under long-term leases, while some of the bigger plots are still available.” No word, though, on whether a hotel operator is interested in one of these plots.
Fraport thus remains confident with regard to the airport’s new terminal, work on which started in the summer of 2019, with the opening due to take place in June 2021, in time for just Slovenia's six-month Presidency of the Council of the European Union. The new terminal will operate in conjunction with the renovated existing terminal, raising capacity from 500 to 1,280 passengers per hour.
STA, 6 January 2020 - Four former top executives of Hypo Alpe Adria have been sentenced to between six and eight years in prison for defrauding the now defunct financial group of EUR 22 million through property transactions.
Former Hypo Alpe Adria CEOs Anton Romih and Božidar Špan, former Hypo Leasing director general Andrej Potočnik and former Hypo Alpe Adria Consultance director Andrej Oblak were found guilty of abuse of office and money laundering by the Ljubljana District Court on Monday.
"Guilty because they abused their position with the intent of gaining a pecuniary advantage for themselves," judge Srečko Škerbec declared at the close of a long-running trial, one of the first in the country to put bankers in the dock.
He said the quartet committed the crimes with the assistance of Hilda Tovšak, the former boss of builder Vegrad, who pleaded guilty to aiding in the abuse of office and money laundering in the case in the pre-trial hearing in November 2015, agreeing to a suspended sentence.
The highest sentence, eight years in prison, was given to Oblak, the former CEO of Hypo Alpe Adria Consultance. Romih was given six years in prison, Špan six years and six months and Potočnik six years.
The judging panel also imposed fines of EUR 37,000 on Oblak and EUR 35,000 on each of the other three defendants. Once the judgement becomes final, they will also have to pay back the illegal proceeds they made.
The court upheld the prosecution's view that the defendants had defrauded the bank of several million euro, the money which they had moved off-shore to Liechtenstein and Luxembourg before attempting to launder it.
The court held that Oblak had sought to hide the origin of proceeds by means of numerous financial transactions and swaps for equity stakes, while the others had accepted what they knew was unlawfully gained money and covered its origin.
The criminal acts were related to real estate projects in Ptuj in the north-east of the country and Trzin in central Slovenia.
"It involved an enormous procedure and complex financial transactions," said judge Škerbec as the reading of the judgement went on for several hours. The defendants were not present to hear it.
He noted the many twists and turns in the trial, including obstacles in the reading of evidence, interruptions and defendant absences, noting that witnesses from Austria, Liechtenstein and Luxembourg had been called to the stand.
Early on in the trial, the defence succeeded with its motion to suppress evidence because the court had failed to inform witnesses in a Luxembourg law firm about their rights.
More than 60 hearings into the trial after more than 40 witnesses had been heard, the trial had to start anew last year after it had been interrupted for more than three months.
The delays were due to numerous motions for exclusions of evidence and the judging panel, and defendants being absent for medical reasons, including one losing consciousness in court.
"The defence sought exclusion of the presiding judge or the entire judging panel 14 times, and several motions concerned exclusion of evidence," said the judge.
"In their closing arguments the defence repeatedly asserted that the panel did not follow their proposals. However, I accepted at least one third of the defence's motions," Škerbec said.
The prosecution had sought a total of 38 years in prison for the quartet, a year and a half more than the combined sentence handed down by the court.
Nevertheless, prosecutor Ana Bučar is happy with the ruling, so she is yet to decide whether to appeal against it.
She is happy the court has recognised the defendants' acts as criminal acts and sentenced them to prison, and also that "this lengthy trial which was extremely complex from the aspect of evidence and procedural law has ended".
Meanwhile, the defence has already announced appeals and highlighted that a number of procedural mistakes had been made, so it expects the rulings to be quashed by higher-instance courts.
Lawyer Žiga Petrnel said that "we didn't agree with the indictment five years ago and we agree even less with the verdict now".
His colleague Dejan Markovič is disappointed that in the lengthy trial with more than 160 hearings the court has made several procedural mistakes to the detriment of the defendants. "So the ruling will definitely be quashed at one of the appellate courts."
Lawyer Blaž Kovačič Mlinar said he had expected "such an outcome" because the judge had been steering the trial towards "a guilty verdict".
He thus believes that "only at the appellate courts will we be able to start discussing the substance of the matter".
Kovačič Mlinar also believes "the defendants were found guilty also because their defence had been decisive and active".
The 11 companies that are in the SBI TOP index are the most liquid and highly capitalised stocks on the Ljubljana Stock Exchange (LJSE). The index, which is designed to be tradeable, thus serves as a capital benchmark for the country, intended for use in index-linked financial instruments
The SBI TOP rose 15.2% in 2019, representing a good return for investors, even better than real estate (on average). But what are the firms it includes, and what do they do? Using data from the last trading day of 2019 (December 23), the component companies are listed as follows in ascending order of value for their index free-float capitalisations.
11 Intereuropa - €12,034,049
Based in Koper and part of the Intereuropa Group, this company offers a global logistics service and the leading supplier of such services in Slovenia and South-Eastern Europe. In September 2019 Pošta Slovenije, the state-owned postal operator, announced plans to acquire 72% of the firm. Our stories on Intereuropa are here.
10 Unior - €19,443,136
Now entering it’s 101st year in business, Unior grew from the 18th century tradition ironworks in the Pohorje hills. The forged metals and toolmaker is now a leading global supplier for the auto industry. The name is based on the words univerzalno orodje (universal tools). All our stories on the company are here.
9 KD Group - €42,742,453
KD Group is one of the Slovenia’s leading financial groups, managing market and non-market investments. The firm was founded by Matjaž Gantar, who died 2018 at the age of 54, having become one of the richest men in Slovenia, with a colourful and varied career that included being the bass player in two of the country’s legendary punk bands, Lublanski Psi and Pankrti. Our stories on KD Group are here.
8 Cinkarna Celje - €90,170,233
Established in 1873, Cinkarna Celje is a chemical company whose main product is titanium dioxide pigment. This is able to protect materials against the damaging influences of sunlight and weather, in addition to having very good bleaching and coating properties. Exports account for more than 80% of the firms sales. Our stories on Cinkarna Celje are here.
7 Luka Koper - €127,680,000
Luka Koper runs the port of Koper, a logistics centre that’s the best connected container port in the Adriatic, and ranked 80th in a list of the 900 best connected ports in the world. It’s expected to benefit from Chinese investment in Trieste, and from the growing infrastructure and trade links between Europe and Asia. Our stories on Luka Koper are here.
6 Telekom Slovenije - €144,826,192
In addition to its operations in Slovenia, Telekom is also the majority owner of a number of foreign subsidiaries, including mIpko Telecommunications sh.p.k. (Kosovo); Siol DOOEL Skopje (Macedonia); Blicnet d.o.o., Banja Luka and Siol, d.o.o., Sarajevo (Bosnia and Hercegovina); Siol d.o.o., Beograd (Serbia); Siol d.o.o., Podgorica (Montenegro); and Siol d.o.o., Zagreb (Croatia). Our stories on the company are here.
5 Pozavarovalnica Sava - €187,005,529
Better known as Sava Re, the company is an international insurance group present in more than 100 insurance and reinsurance markets across the globe, and is the largest of reinsurance firms domiciled in Central and Eastern Europe. Our stories on Sava Re are here.
4 NLB - €248,000,000
The recently (2018) privatised NLB is the largest banking and financial group in Slovenia, with subsidiaries throughout the former Yugoslavia and it’s logo atop one of the towers in Ljubljana’s Republic Square. Our stories on the group can be found here.
3 Zavarovalnica Triglav - €305,560,389
Triglav is Slovenia’s biggest insurance group, with a story going back to 1900. In recent years it’s also become the leading provider of mutual funds in the country, with asset management activity now an increasingly important part of its business. All our stories on Triglav are here.
2 Petrol - € 533,049,906
The Petrol Group operates petrol stations all over Slovenia and elsewhere in the former Yugoslavia, as befits its original name of Jugopetrol Ljubljana, which it lost in 1953. A major investor in Croatia, where it operates over 100 stations, it also own Jadranplin, which stores and sells liquified petroleum gas, and recently moved into the convenience store market. Our stories on the company are here.
1 Krka - €714,424,941
Krka is a pharmaceutical company based on Novo Mesto that focuses on producing generic drugs for the global market. A much smaller part of its business, but with a relatively high profile in Slovenia, is the company’s line of health resorts, under the name Terme Krka Group, which includes spa complexes and hotels. Our stories on Krka are here.
Keep up with all our business news in our business section
Adria Airways finally collapsed in 2019, with investigations as to the role of its owner, 4K Invest, in the affair still ongoing. Since the closure of the erstwhile national carrier a number of airlines have stepped in to fill the more profitable gaps in the schedule, while the Slovenian government is said to be in talks with regard to subsidising some other routes.
Meanwhile, what remains of Adria is being auctioned off, with the sale of its various licenses and permits expected in the coming weeks. Ex-Yu Aviation reports that the firm’s Air Operator Certificate (AOC) – which allows the holder to run commercial flights – is being offered at a starting price of €45,000. Purchasing the AOC would enable the new owner to restart Adria’s previous services from Slovenia and other EU Member States.
However, before you reach for your wallet note that the AOC would only be useful to a buyer who purchased Adria’s entire estate, as well as agreed to take on a number of obligations that remain after the carrier’s bankruptcy.
Two prominent names from Slovenian business who have been mentioned in connection with purchasing Adria’s assets are Joc Pečečnik, the founder of Interblock Gaming, and the “banana tycoon” (and property developer) Izet Rastoder.
STA, 1 January 2020- Uniform cigarette and tobacco packaging will roll out on New Year's Day under new rules, bearing graphic warnings of the adverse health effects of smoking and donning the Pantone 448 C dark brown hue, known as the ugliest colour in the world, to further deter anyone from picking up the harmful habit.
Changes to the act on the use of tobacco and related products will be introduced on Wednesday. Packages will be non-branded, standardised and overall looking as uninviting as possible, according to the Health Ministry.
Smoking is the No. 1 risk factor potentially leading to premature death in Slovenia, but it can be mitigated. Moreover, lung cancer is caused by smoking in almost 90% of cases, with more than 3,000 Slovenians dying from smoking-related diseases every year.
Uniform packaging is an effective preventive measure deterring consumers from buying tobacco and cigarettes, said the ministry, adding that Slovenia is thus joining the club of the most progressive countries in this fight worldwide, including Australia, France, the UK, Ireland and Norway.
A group of 38 MPs, mostly coalition deputies, tried to postpone the changes, endorsed in 2017, until 2023, but the parliamentary Health Committee voted down their proposal in July.
The attempt ignited warnings that the postponement would have a negative effect on public health. There were also speculations that the tobacco industry was behind the proposal, with the Commission for the Prevention of Corruption looking into possible wrongdoings in the lobbying process.
