GUS has published financial results of companies with more than 49 employees, active in areas excluding agriculture, hunting, forestry, fishing, financial mediation and higher education. In the first nine months of 2004 the bottom lines of companies researched were much better than a year before. Sales revenues were 17.7% up year-on-year and profitability improved. The gross financial result was PLN 57.9bn (€13.5bn) compared to PLN 24.6bn in Q1-Q3 2003, with the net financial result being PLN 46.4bn compared to PLN 15.1bn a year before. More and more companies are profitable, with 73% of those surveyed reporting a net profit, 7 p.p. up year-on-year. In manufacturing alone this ratio was 77.7%, an 8.5 p.p. hike. All economic ratios improved, including that of sales profitability, rising from 4.5% to 6.4% over a year, and the cost level indicator decreasing from 96.8% to 93.8%. The share of exporters has been increasing (to 46.5% in September 2004), and as many as ! 80% of exporting businesses reported a net profit.

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The Office for Competition and Consumer Protection (UOKiK) has fined two companies - Lokata and Kapital - for operating the so-called "Argentinean system" (to the tune of PLN 820,000 and 290,000 respectively), and for having prohibited clauses in loan agreements. Lokata's principal offence was the collection of handling charges after the termination of the agreement; and Kapital had reserved for itself the right to keep funds left over after a savings group had been dissolved. The penalties were imposed because the agreements had not been changed after the prohibited clauses had been brought to the attention of the companies. Both companies must pay €500 for every day that they delay payment of the fine.

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The Civic Platform (PO) has increased its advantage over other parties as regards popularity. According to the latest poll by the research company, PBS, undertaken by Rzeczpospolita daily, PO would get 28% of the vote if parliamentary elections took place at the beginning of November. The left side of the Polish political scene has improved its ranking. For the first time in many months the left-wing Left Democrat Alliance (SLD) reported support of as much as 10%. The League of Polish Families (LPR) saw 13% support and the same was in the case of Law and Justice (PiS).

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Internetowy Dom Maklerski SA (IDM SA), a brokerage house, plans to debut on the WSE in Q2 2005. It will be the first instance of a brokerage house deciding on an IPO. IDM SA is intent upon earning approximately PLN 15-20m from the share issue for the development of asset management services, an internet transaction platform and informatics.
IDM SA is one of the smallest brokerage houses on the Polish market. In October 2004 it had about 0.7% of the WSE share turnover and 1.05% of the futures contracts market under its wing. The firm also has 6,430 investment accounts. With regard to net profit, about PLN 5m is predicted for 2004, in contrast to only PLN 0.51m in 2003.

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The TP SA group has recently published its Q3 results. The group's consolidated revenues increased modestly by 2.5% year-on-year to PLN 4.68m, while its aggregate net profit came to PLN 596m, 18.7% more than a year ago. Analysts surveyed earlier by Rzeczpospolita, were more pessimistic about the TP SA results.
TP SA revenues from fixed-line voice services fell by 7.2% year-on-year to PLN 2.75bn, while those from data transmission rose by 15.4% to PLN 452m. PTK Centertel, the mobile arm of TP SA, recorded revenues of PLN 1.475bn, a 22.8% rise in comparison with Q3 2003. The operator' net profit soared from PLN 3m to PLN 216m over the same period.
At the end of September 2004, TP SA had a total of 11.339 million fixed-line subscribers, a 2.9% year-on-year rise. However, this was 32,000 less than at the end of June 2004. The number of TP SA broadband ("Neostrada"+SDI) subscribers surged by 174,000 in Q3 to 514,000. PTK Centertel added around half a million subscribers to its base in Q3. At the end of September it had a total 6.593 million clients. Of these, pre-paid users accounted for 54%. According to TP SA data, despite the implementation of per second billing systems and price cuts for pre-paid users, ARPU and MoU from the pre-paid segment increased in Q3 in comparison with the previous quarter.
In Q3 TP SA reduced its investment outlays and its debt. In Q1-Q3 2003 aggregate investment slumped by 25% year-on-year to PLN 1.8bn, while consolidated debt dropped to PLN 13.2bn. Nevertheless, Marek Jozefiak, TP SA's CEO, has pointed out that the operator plans to invest as much as PLN 1.7bn in Q4 itself.
During a press conference, Roger de Bazelaire, the carrier's CFO, asked by one of the brokerage house analysts, confirmed that TP SA might buy back a 34% stake in PTK Centertel, currently owned by France Telecom, TP SA's strategic shareholder.

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According to Parkiet, the Treasury is planning to complete the privatisation of most of the companies in the spirits industry next year. It is currently working on the sale of four plants, in Torun, Jozefow, Bialystok and Bielsko-Biala, and is considering the re-starting of the privatisation processes of two other Polmoses: in Szczecin and Konin.
Furthermore, the very near future should determine the fate of Polmos Torun. The latter company is to be acquired by Elana, part of the listed Boryszew group, but the investor is still unable to agree with the trade unions on the social package. The final decision on this matter is now in the hands of the Treasury.

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Pollena Ewa, the only cosmetics manufacturer listed on the Warsaw Stock Exchange, reported PLN 22m (€5m) in sales and a PLN 3.1m (€0.7m) net loss after the first nine months of 2004. The company has managed to mitigate the loss, from the PLN 7m (€1.6m) suffered in the corresponding period of the previous year, while revenues were slightly lower (PLN 23m (€5.2m) in Q1-Q2 2003). According to Przemyslaw Lis Markiewicz, the company's CEO, the fall in revenue was caused by the cessation of the production of private label cosmetics, which accounted for 30% of the company's revenues. Pollena Ewa has also reduced the prices of its products, by 25% on average, and its range from 350 to 100 products. Mr Lis Markiewicz told Parkiet: "The third quarter of this year was considerably better than that of the previous year. Sales of some products have increased tenfold". In his opinion the company's best-sellers are Kanion perfumes and the Eva Natura cosmetics lin! e. The entire product range has been sold in cheaper packaging from Poland, with a new pattern, since the beginning of this year.

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Polska Grupa Farmaceutyczna (PGF), the largest Polish drug wholesaler, is standing by its 2004 revenue forecast despite poor pharmaceutical market growth. As we reported earlier, the drug market is expected to grow by approximately 3% in 2004 despite a forecast of 8-9% around the beginning of the year. According PGF's president, Jacek Szwajcowski, in a statement to Rzeczpospolita, the company will earn some PLN 48m (€10.9m) in net profit in contrast to revenue of PLN 4bn (€909m).
After the first three quarters of 2004 PGF had earned revenue of PLN 2.7bn (€613m), a 7.5% year-on-year rise. Q3 2004 net profit amounted to PLN 39.3m (€8.9m) in contrast to PLN 32.1m (€7.3m) the year before. Although the third quarter is traditionally the worst for the pharmaceutical industry each year, as fewer people become ill during this time, PGF managed to increase its sales revenue by 2.1%, a year-on-year rise, to PLN 891m (€202.5m).
Polska Grupa Farmaceutyczna also announced that it will pay a dividend to its shareholders and develop the more advanced services, i.e. the most profitable, for its clients.

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Following Carrefour's acquisition of 13 Hypernova hypermarkets from Ahold last Monday, the retail industry in Poland has been speculating in the last few days with regard to further steps toward consolidation of the market. Andrzej Lewinski, the president of the Polish Chamber of Trade (PIH), suggested to Puls Biznesu that "the US Wal-Mart giant is interested in developing a network of smaller stores in Europe, which means that Ahold would be a good takeover target for the company". Andrzej Falinski, the president of the Polish Organisation for Trade and Distribution (POHiD), in turn, warned that "if the restructuring decisions are now being taken by foreign chains, this is a clear signal for Polish traders to look at their own position on the market. Without thorough organisation and restructuring of their finances and their technical background, they will have no chance of surviving, and this applies in particular to those operating in large cities".

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According to the Finance Ministry, the number of used passenger vehicles imported to Poland has decreased compared to summer months 2004. In October the figure (preliminary data) stood at 91,600, and in the course of the first ten months of the year: 610,000. The number of imported used vehicles this year is already twice as high as that of new ones sold in car dealerships and Rzeczpospolita daily assumes that at least another 150,000 used cars will arrive. According to Wojciech Drzewiecki of Samar, a company monitoring the Polish automotive market, the decrease in imports of used vehicles might be connected with the Ministry of Finance announcement of an introduction of a fee related to the amount of pollution emissions of a car.

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Ireniusz Fafara, vice-president of the Social Insurance Institution (ZUS), has announced at a session of the Public Finances Committee investment plans for ZUS in 2005, worth PLN 315m. This sum will be used to complete investments begun in Poznan, Krakow and Bydgoszcz (new buildings) as well as to purchase IT systems and equipment.

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At the end of 2004 PKN Orlen, a fuel company, will have a net profit of about PLN 2bn, almost twice that of 2003, when the figure was PLN 987m. In Q3 2004 net profit was 2.3 times higher year-on-year, when revenues increased by 28%. During July-September the company reported a net profit of PLN 837m with revenue PLN 8.5bn. Analysts claim that such a situation has resulted from the healthy fuel product market. PKN Orlen is a supplier of about 63% of the fuel on the Polish market and 50% of the diesel. In Q3 Orlen processed 3.4 tonnes of oil, 9% more than a year ago, 7% more fuel (727,000 tonnes) and 17% more diesel (887,400 tonnes).
After the first three quarters, net profit was PLN 1.82bn and revenues - PLN 22bn.

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In November the local authority of the Mazowieckie voivodship will announce a tender for the supply of 10 trains. The local authority will buy the trains as part of a project relating to the creation of a company called Koleje Mazowieckie together with Polskie Koleje Panstwowe Przewozy Regionalne (PKP PR), part of the national rail carrier PKP. Koleje Mazowieckie will manage passenger transport within the Mazowieckie voivodship. The creation of such a company is part of a government programme which will encourage local authorities to take over responsibility for local passenger transport and investments.
Parkiet reports that the manufacturers of the trains are finding the production deadlines premature, and this may lead to a situation in which Polish producers are unable to meet them. The president of Pojazdy Szynowe PESA Bydgoszcz, Tomasz Zaboklicki, has informed Parkiet that the deadline for first trains may be even August 2005, when the typical production cycle lasts about 2-3 years.
By the end of 2007 investment in new trains in Mazowieckie may amount approximately to as much as PLN 130m, but this will all depend on how much money PKP PR is prepared to spend, along with the scale of the EU co-financing.

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According to data contained in a report prepared by the media house Starlink, companies in Poland are spending more on promotional activities. The company estimates that, in Q3 2004, the advertising market in Poland grew by 11.5% year-on-year to PLN 858.8m. In Q3 2003 the figure was PLN 770m. In August 2004 companies spent 16% more than a year ago, the most robust growth being witnessed in radio advertising (23.5%); spending on outdoor advertising saw a rise of 18.1%, whereas the lowest rate of increase was reported by magazines (4.9%). In Q3 2003 48.1% of the spending on advertising was aimed at television, but in Q3 2004 this figure decreased to 47.7%. During the first three quarters of 2004 the most active entities in TV advertising were entertainment and cultural companies, which spent PLN 39.7m, followed closely by medical concerns - PLN 29m. Less money was spent by telecoms companies (PLN 3.7m) and cleaning product companies (PLN 10m).

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