불가리아 주요 경제뉴스 (25 February - 2 March 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (25 February - 2 March 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

Ø  Bulgarians' Incomes Fall by 8%

Ø  Foreign Tourist Arrivals in Bulgaria Rise 6.4% Y/Y in Jan

Ø  Bulgarian banks' net profit falls 27% in Jan 2011

Ø  Foreign reserves add 0.9% in February

 

 

INVESTMENTS:

 

Ø  Cabinet, EBRD to sign memorandum for up to EUR 150mn for energy efficiency

Ø  Major International Banks to Enter Bulgarian Market

 

 

COMPANIES:

 

Ø  Germany's Magnat Real Estate To Exit Bulgaria by End-2013, Eyes Romania

Ø  EBITDA of wireless telecom GloBul rises 3.6% y/y in Q4

Ø  Power distributor E.ON Bulgaria plans capital hike

Ø  Bulgaria's Kaolin consolidated profit jumps 50% in 2010

Ø  EVN proposes 5.1% electricity price hike as of July 1

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Bulgarians' Incomes Fall by 8%

The incomes of the Bulgarian people shrank by 8.2% in 2010, the national statistical institute said. This negative tendency lends itself in part to the lower wages of the population and in part to the increasing inflation rate. The average monthly income per person in the last quarter of 2010 was 308 levs, against 320 levs a year ago, which is a decrease by 3.7%. Added an annual inflation are of 4.5%, it emerges that in 2010 the Bulgarians got by 8.2% poorer. The Bulgarians now eat more bread and less meat and fruit. Owing to the increasing prices of foods, our compatriots are cutting down their expenses on furniture, clothing items, healthcare services, as well as on alcohol and tobacco products.
At the same time, the savings of the Bulgarian people have also shrunk, as they saved an average of just 9.62 levs in the last quarter of 2010, against 60.61 levs for the same period of 2009.
The statistical institute also says that this year the savings of the Bulgarians have shrunk six times to just three levs per person per month, while more and more households have found themselves compelled to use their savings to pay their food and utility bills. In addition, taxation and social security burden in Bulgaria increased up to 30 levs per person per month in 2010 from just 19 levs a year ago. As a result, households pay off over 10% of their budget in taxes.

 

Foreign Tourist Arrivals in Bulgaria Rise 6.4% Y/Y in Jan

Foreign tourist arrivals in Bulgaria increased by 6.4% on the year to 324,262 in January, official statistics showed on Monday.In January, tourist arrivals from EU member states fell by 2.2% on the year to 156,360, the National Statistics Institute reported on its website. The decrease was sharpest in the number of visitors from the Czech Republic, by 43%, and from Spain, by 23%.

The number of tourist arrivals from other European countries rose by 14.7% on the year to 140,647 in January, as visitors from Serbia increased by 30.1% and those from Macedonia and Ukraine increased by 29.9% and 21.8%, respectively.

About 48% of all foreign tourists who visited Bulgaria in January were holiday makers, 23% were just transiting the country. Business trips accounted for 16% of the total foreign arrivals in January.

 

 

 Bulgarian banks' net profit falls 27% in Jan 2011

The combined profit of Bulgarian banks stood at BGN 46 million (USD 32.4m/EUR 23.5m) in January, down by 27% on the year, according to figures of the Bulgarian National Bank (BNB). Impairment charges continued to rise in the period, reaching BGN 111 million, up by 28% against January 2010. According to BNB, impairments were fully covered by income generated from core activities.

Despite these costs, local banks managed to generate a positive financial result, which adds to the undistributed profit for 2010 and "strengthens the capacity of the system and of individual banks to offset the negative impact of the deteriorating loan portfolio," the central bank said.

Profits were depressed by expenses made to cover non-performing loans and by lower income due to subdued lending, a trend that has persisted since the start of the financial crisis.

In monthly terms, household loans shrank by BGN 48 million to BGN 18.5 billion, while consumer loans edged down by 0.4% to BGN 9.272 billion. Housing mortgages inched down 0.1% to BGN 9.258 billion in January, while corporate loans climbed 0.4% to BGN 34.1 billion. Household deposits increased by BGN 200 million to BGN 28.238 billion in the period, while deposits of the business sector stood at BGN 62.7 billion, up by BGN 563 million compared with December.

 

Foreign reserves add 0.9% in February

Foreign reserves rose by 0.9% m/m (EUR 105.6mn) to EUR 12.33bn as of end-February, central bank data showed. The deposit of the government declined by 7.6% (EUR 187mn) in February after falling by 10.8% in January to account for 18.4% of the total foreign reserves as of the end of February as compared to nearly 25% a year earlier. The money in circulation also declined (by 0.8% m/m to EUR 33.8mn). All other components had positive contribution with commercial banks' deposit rising by 3.4% (EUR 97.2mn) during the month.

However, the major improvement was due to the 55.5% hike of holdings of other depositors. In annual terms, the total value of foreign reserves increased by 1.3% after falling by 2.5% y/y in January. Since the beginning of the year, the reserves have contracted by 5%. The ratio of foreign reserves to short-term debt improved to 113.7% at the end of 2010 from revised 111.5% at end-November, 104.6% at end-2009 and 96.5% at end-2008 but still much weaker compared to more than 120% at end-2007 and about 300% in 2002-2004.

 

 

 

 

 

INVESTMENTS:

 

Cabinet, EBRD to sign memorandum for up to EUR 150mn for energy efficiency

Economy minister Traycho Traykov and the EBRD director for Bulgaria Daniel Berg are to sign a memorandum today (March 2) under which the Bank will provide up to EUR 150mn in credit lines to local banks, the economy ministry informed on its website. The funds will secure co-financing of EU-funded projects for energy efficiency in the industry under the country's competitiveness operational programme. In addition, EBRD will provide EUR 1mn as technical assistance for the evaluation of the project proposals.

 

Major International Banks to Enter Bulgarian Market

Major international banks have submitted notifications of intent to work in Bulgaria to the Bulgarian National Bank. A total of 190 credit institutions have expressed interest in entering the Bulgarian market, according to the 24 Chasa daily; 18 of them, including 16 banks, have already notified the BNB that they want to operate in Bulgaria. The list of major international credit institutions considering the Bulgarian market includes JP Morgan, Goldman Sachs Europe, Barclays Bank, Commerzbank, Saxo Bank, Merill Lynch International, Morgan Stanley International, Erste Group Bank, the Royal Bank of Scotland, Credit Suisse, and the London branch of China Construction Bank. The Turkish Isbank will be opening its first Bulgarian branch in the first half of 2011, the BNB announced. For the time being, the central bank in Sofia has not received any requests to approve foreign acquisitions of Bulgarian banks or branches even though there are unconfirmed reports that three or four Bulgarian banks might be offered for sale.

 

 

 

COMPANIES:

 

Germany's Magnat Real Estate To Exit Bulgaria by End-2013, Eyes Romania

Germany's Magnat Real Estate said it plans to exit by the end of 2013 a number of markets, including Bulgaria, as it narrows its focus to a handful of rapidly-growing core markets in Eastern Europe. The Frankfurt-based company plans to concentrate on the Black Sea region, and in particular on Ukraine, Turkey and Georgia, it said in a statement on its website.The company currently operates on nine markets.Romania is a potential candidate to become a core market, and developments in the country are being monitored, Magnat added.

As a result, Magnat intends to gradually pull out of other markets such as Germany, Poland, Bulgaria and Russia. "The stocks and projects in these countries are to be divested by the end of 2013. The first sales should take place in as early as 2011." In its core markets, the company will be active through development of own projects and third-party asset management mandates. "Eastern Europe is currently emerging from the deep economic recession in the wake of the financial crisis of 2008 to 2010. In addition to numerous distressed situations, the long-term backlog and upward trend in Eastern Europe continues to be highly promising." Magnat says on its website it owns a 75% stake in a 10,500 square metre residential development in Bulgaria's Pancharevo it acquired in 2007. The Frankfurt-listed company also owns 75% stakes in two residential developments in Romania.

 

EBITDA of wireless telecom GloBul rises 3.6% y/y in Q4

The earnings before interest, taxes, depreciation and amortisation (EBITDA) of the country’s second-largest wireless telecom operator GloBul increased by 3.6% y/y to EUR 46.1mn in Q4 but fell by 5.6% y/y to EUR 172.2mn in the full-year readings, according to the financial report of the Greek telecom group OTE, which holds the full stake in GloBul through its cell-phone arm Cosmote. The EBITDA margin increased by 2.5pps in a year to 43.1% in Q4 and by 1.2pps y/y to 40.7% last year. Revenues went down by 2.5% y/y to EUR 107mn in Q4 and by 8.3% y/y to EUR 423.3mn in 2010. Service revenues declined by 8% in Q4 mainly due to tough macroeconomic factors, intense competition in the business postpaid segment, and lower interconnection rates. At the same time, the company managed to cut operating expenses by 6.6% y/y in Q4. The total customers’ base of GloBul reached some 3.92mn at end-2010, up by 0.4% y/y. Post-paid customers rose by more than 7% y/y to total of 2.3mn or 58% of all. At the same time, the number of pre-paid customers continued falling reflecting both mandatory prepaid registration and Globul’s strategic focus on post-paid subscribers. The average monthly consumption rose by 17% y/y to 149 minutes in Q4 but the average revenue per user dropped 4.2% y/y to BGN 16.4 (EUR 8.4) respectively, GloBul said in a statement. The company says it has maintained its market share in the country in terms of revenues.

 

Power distributor E.ON Bulgaria plans capital hike

E.ON Bulgaria, majority controlled by Germany's E.ON and controlling the distribution network in northeast Bulgaria, plans to increase its capital, Dnevnik Daily informed. E.ON has not provided information about the capital hike but said for the daily that its size will depend on the future strategy of the state energy regulator and the shareholders. The company added that it has lost BGN 21mn (EUR 10.7mn) in revenues last year because of the electricity price-setting mechanism. E.ON Bulgaria projects to post a loss this year. The state controls 33% in E.ON Bulgaria and has not yet decided if it will take part in the capital hike. We remind that the cabinet was planning to sell its stakes in the three power distributors in the country, majority controlled by E.ON, EVN and CEZ.

 

Bulgaria's Kaolin consolidated profit jumps 50% in 2010

Bulgarian mineral extracting and processing company Kaolin said on Tuesday its consolidated profit rose 50% on an annual basis to BGN 7.54 million (USD 5.3m/EUR 3.8m) in 2010.  The company's consolidated revenue stood at BGN 154 million in the period, up 13.6% against 2009, while earnings before interest and tax (EBIT) came in at BGN 12.7 million, up 37%.

Despite Kaolin's measures to cut its expenses, it registered an annual rise of 28.2% in operating costs for external services, the bulk of which were allocated for transport.  Its sales were mainly propped up by the growth in ceramic sector orders, which remained the largest market for the company's production in 2010.

 

EVN proposes 5.1% electricity price hike as of July 1.

EVN Bulgaria, majority owned by Austria’s energy company EVN and controlling the grids in south-east Bulgaria, proposed the price of the electricity to increase by 5.1% as of July 1, Dnevnik Daily reported. The overall price hike is based on 19.5% increase in the transmission price mainly and is to raise the revenues of the company to BGN 333mn (EUR 170.3mn) to back the investments. It includes also compensation for the accumulated inflation. If approved, the increase would raise the average bills of the households by BGN 2.36 to BGN 41.13 per month. The share of EVN Bulgaria in the price formation is 13% (the share of power producers and the National Electricity Company is 70.3%, the remaining part is the imposed VAT). A month ago, EVN Bulgaria said it will invest BGN 113.1mn in infrastructure upgrades. At the beginning of February, state energy commission head Angel Semerdzhiev said that the price of the electricity is to increase by 1.5% as of July 1 to cover the expenditures of the power distribution companies in the country for purchase of green energy. The companies should file their requests for electricity price hike as of July 1 today (February 28) at latest.