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KEY MACROECONOMIC INDICATORS
Better data on current account
8 November 2004
The NBP-published
data on current account in August turned out to
be much better than expected, as instead of the forecast
deficit, Poland reported a surplus of €462m. However,
this figure might be significantly corrected in a month.
Poland's payment balance data has improved due to
factors including the positive balance of transfers from
the European Union and increasing exports. According to
the latest data by the NBP, in the first eight months of
2004 a cumulated deficit of €1.7bn was reported compared
to the negative balance of €3.4bn in the same period
last year. Cumulated exports were up from €34bn to
€42bn, and imports from €37.6bn to €44.7bn. Trade
deficit was €2.7bn, better than the €3.6bn figure
reported in January-August 2003.
top ^ LEGAL & REGULATORY
"Small" company not
small?
8 November 2004
Thousands of
small companies may lose the chance to obtain
development funds from the European Union because of the
Polish definition of small and medium-sized companies,
which is different from the EU standard. In the European
Union the two main criteria are: revenue: €10m, and the
workforce (50 persons). In Poland, in an act relating to
freedom of economical activity, there is also a
stipulation that such a company, to be considered small,
may not sell 25% of its shares to anyone, even, for
example, with regard to venture capital used to obtain
money for investment.
top^
POLITICS
Elections - when?
8 November 2004
President
Aleksander Kwasniewski has stated in an interview for
the weekly Polityka, that parliamentary elections
might take place in autumn 2005, as allowed in the
constitution, although he had earlier proposed May. At
the end of October this year, the President also
proposed that presidential elections in October 2005 be
merged with the referendum on the European Constitution.
The opposition is against this idea and wants the
referendum to take place later on.
top^ FINANCE & BANKING
HSBC to establish chain of
branches in Poland
11
October 2004
HSBC, one
of the world's largest banks, which entered the Polish
market a year ago, is preparing to create a chain of
branches in order to circumvent brokers. According to
the vice-president of the HSBC, Lech Kurklinski, this
will enable it to regulate quality of service and help
to control and motivate employees. The strategic product
of the bank is hire-purchase, which is offered in some
chains of shops, including Sony. The second pillar,
created in 2005-2006, of HSBC activity in Poland will be
cash loans, which will be offered in branches all around
Poland. Next year the bank will offer credit cards and
then mortgages. It is also possible that car loans will
be offered. Representatives of Household, a company in
the HSBC group, have helped to prepare an offer for the
bank's clients. The branches will open under the
Household brand which is present on the other markets -
as Beneficial Kredyt. There was no disclosure of any
further investment details, the number and ! location of
the branches or the details of the strategy.
top^ IT & TELECOMS
Mobile density to reach
56-58% in 2004
8
November 2004
Boguslaw
Kulakowski, the president of Polska Telefonia Cyfrowa,
Poland's leading mobile operator, has told Interfax that
Poland's mobile penetration rate is about to
reach 56-58% in 2004, as Poland catches up with the
European Union, possibly reaching EU averages in 2-3
years. This is in line with our forecasts from the
latest report "The Telecommunications Market in Poland
2004". The Polish mobile telephony market's robust
growth has continued in terms of the number of
subscribers after all three mobile operators
significantly slashed their prices for pre-paid services
(initiated by the introduction of Heyah, a new mobile
brand, in Q1 2004).
Meanwhile, even more promising
forecasts have been presented by another mobile operator
- Polkomtel, which manages the Plus mobile network. The
operator believes that mobile density may near 59-60% by
the end of 2004. In addition, Polkomtel executives
predict that in 2005 mobile expansion will be maintained
and some 9-10 million SIM cards may be sold on the
Polish market. According to the operator, at present
some 30% of pre-paid mobile users in Poland use more
than one SIM card.
top^
FOOD & DRINK
Pozmeat stops production
8 November 2004
The management of
Pozmeat, a Poznan-based meat company, has
announced that production has stopped because of last
Wednesday's suspension of power supplies. Grupa
Energetyczna Enea, an energy distributor, has stopped
supplying the company because of the PLN 800,000
(€186,000) owed to Enea by Pozmeat. As a result of the
cessation in production, the management board has
informed Pozmeat's trade unions about imminent
dismissals. Bogdan Wierzbicki, the president of the
company, told Rzeczpospolita: "By the end of November we
will let around 250 employees go". Earlier, we reported
that, on 27 September, the company filed for bankruptcy
and the liquidation sale of its assets. The firm's debts
reportedly exceed PLN 90m (€21m). After the first half
of 2004, the company suffered a PLN 12.4m (€2.9m) net
loss on sales of PLN 9.5m (€2.2m).
top^ NON-FOOD CONSUMER GOODS
Stora Enso to acquire
majority interest in Poland's Intercell
8 November 2004
Stora Enso, the
Swedish-Finnish packaging giant, will acquire 66% of the
shares in the packaging producer Intercell from private
shareholders and the International Finance Corporation.
The acquisition is expected to be concluded by the end
of 2004, subject to approval by the regulatory
authorities. The financial terms of the transaction were
not disclosed.
The Treasury owns the balance of the
shares in Intercell. In February 2004 the Polish
Treasury announced its intention to privatise its
shareholding in the company.
A company statement
reads: "The acquisition is part of Stora Enso's strategy
of increasing its Packaging Board operations. The
transaction will expand Stora Enso's corrugated
packaging business and strengthen its presence on the
fast-growing Polish market".
Intercell is one of
Poland's largest corrugated packaging companies, with
integrated operations ranging from waste paper
collection to corrugated packaging production. The
Company has three corrugated packaging factories in
Poland, along with a sack factory in Poland and one in
Serbia. Intercell's paper and cardboard mill in
Ostroleka has an annual production capacity of about
250,000 tonnes of containerboard and sack and kraft
paper. Its annual corrugated packaging capacity is about
250 million m2. In 2003 Intercell's sales were €150m,
60% of which was from packaging and 40% from
containerboards and paper. Its EBITDA in 2003 was €27m.
The Company employs about 1,700 people. Intercell also
operates Poland's largest recycled paper collection
business, covering approximately 15% of the market in
Poland.
top^
PHARMACEUTICAL
Poles spend 4% more on drugs in
H1
8 November 2004
In the first half
of 2004 Poles spent PLN 5.8bn (€1.3bn) more on medicines
than they did a year before. The growth figure is
equivalent to 4%. It is estimated that, both in Poland
and the other new EU member countries, drug sales will
continue to rise. According to IMS Health, the ten new
EU members will record growth equivalent to at least 9%
of the pharmaceutical market until 2006. Conversely, in
the pre-accession EU countries, such as France and
Germany, growth is expected to be much more modest.
The reasons for increasing spending on
pharmaceuticals in Poland include the ageing Polish
population and rising pharmaceutical prices. According
to the estimates of some experts, the state's
contribution to drug reimbursement will fade and more
original, expensive medicines will be prescribed. It is
the government's aim to reduce spending on the
subsidising of medicines. Reimbursement savings will
bring in PLN 500m (€116.3m) and the reimbursement total
will amount to PLN 6.2bn (€1.4bn).
top^ RETAIL
66% increase in profit for Jeronimo
Martins
11 October
2004
The Portuguese
retailer Jeronimo Martins has reported a
nine-month net profit of €58.1m, a 66% rise in
comparison with the previous year. This has been
attributed to higher-than-expected operating results and
lower charges. Sales for Portugal's second-largest
retailer were €2.53bn in the first nine months, up by
0.6%, in comparison with €2.52bn a year ago. The company
has emphasised the particularly healthy performance of
the Biedronka discount store chain, which confirmed
healthy results, with 16.5% growth in sales and a 44.8%
increase in operational cash flow, paving the way toward
breaking even in Poland, even after the Eurocash loss.
According to Jeronimo Martins, Biedronka will maintain
the pace of its expansion until the end of the year and
is expected to meet the targets of the proposed
investment plan, reaching the year-end with 730 stores.
top^ AUTOMOTIVE
FSO debt
reduction
8 November
2004
The creditors of
FSO have decided to reduce the company's debt.
FSO owes a total of PLN 196m to 621 small creditors. The
agreement makes FSO more attractive to investors, as the
possibility of its bankruptcy has been reduced. The
consortium Shanghai Automotive Industry Corporation-MG
Rover and Avto-ZAZ of Ukraine are now FSO's possible
investors. The Ukrainian side has begun to repurchase
debts that FSO has in banks.
top^ CONSTRUCTION
Fakro opens two new
plants
8 November 2004
Fakro, a
producer of windows based in Nowy Sacz is to open two
new production plants employing around 250 employees at
the end of next year.
A new production-assembly hall
will be completed in Dobra (in the Malopolskie
voivodship) in the next few months. It will provide work
for 50 employees. This year, work should also begin on
the construction of another production hall in Rudnik
(in the Podkarpackie voivodship) with a surface area of
10,000m2. Two hundred jobs will be created.
top ^ INDUSTRY
Lotos reports record
profits
8 November
2004
The Lotos
group, the second largest fuel company in Poland,
reported a net profit of PLN 393.5m after Q3 2004, in
comparison with PLN 201m in the corresponding period of
2003. The revenues from the sale amounted to PLN7.6bn
for Q1-Q3 2004 in contrast to Q1-Q3 2003 - PLN 6.1bn.
Pawel Olechnowicz, the president of Lotos, has said
that the result is not only an issue of careful economy
and efficient fuel processes but also a consequence of
effective improvements.
The amended prediction for
2004 as a whole is now the higher figure of a PLN 500m
net profit.
The Lotos group is to be privatised in
Q1 2005. The plans outlining the company's WSE debut,
prepared by the privatisation advisor, will soon be
presented.
top ^
TRANSPORTATION & LOGISTICS
Peakes - on WSE in
November
8 November
2004
The Polish
Securities and Exchange Commission (KPWiG) has agreed to
a WSE debut by Peakes, a state-owned transport
company. Peakes hopes to gain about PLN 150-160m, which
will be spent on investments such as the purchase of new
transport resources and the modernisation of existing
ones (PLN 100m), an informatics system (PLN 20m) and
acquisitions (PLN 25-35m). The remaining amount of money
required to finance investments will be raised from the
company's own resources.
In H1 2004 Peakes' revenues
came to PLN 276m, and the net profit was PLN 18.7m.
Today 51.5% of Peakes' shares belong to the Treasury,
and this will be reduced to about 33%.
top ^ MEDIA & ADVERTISING
TVN heading for WSE in
December and almost tenfold increase in Q3 2004 net
profit ...
8 November
2004
TVN, a
television station, will debut on the WSE in December.
The public share issue is planned for the second half of
November. In mid-2004 this offer was valued at about
$100-150m. The president of ITI, TVN's owner, Piotr
Walter, said, at a press conference, that ITI will not
relinquish control of TVN and will keep at least a 51%
share in the TV station.
At present 90% of TVN is
under the control of ITI, a media group, and 10% is
owned by a subsidiary of the BRE Bank.
TVN has seven
TV stations: TVN, TVN Siedem, TVN 24, TVN Meteo, TVN
Turbo, TVN Style and ITVN. 89% of the revenues of TVN
are from advertising, amounting to PLN 500.9m in the
first three quarters of 2004, when net profit was PLN
99.6m. Net profit in Q3 stood at PLN 23m, which is
almost ten times more in comparison with Q3 2003, when
it was PLN 2.4m.
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