불가리아 주요 경제뉴스 (24 February – 2 March 2012)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (24 February – 2 March 2012)

 

Sections/headline briefs:

 

MACROECONOMY:

v  Bulgaria’s Business Climate Sees Slight Decrease Feb 2012

v  Bulgaria’s industrial PPI grows 5.3% y/y in Jan 2012

v  Bulgaria’s general budget deficit narrows by 37.6% y/y in Jan 2012

v  Economic slowdown in Bulgaria shows in corporate balance sheets

 

 

INVESTMENTS:

 

COMPANIES AND INDUSTRIES:

v  Bulgaria's Solarpro opens branch in Macedonia

v  Varna airport resumes operations

v  Competition for Sofia metro-line extension attracts 15 bidders

v  State companies pay EUR 89mn in dividends to Bulgaria’s state budget in 2011

v  Sales of Bulgaria’s battery producer Monbat fall 32.9% in Jan 2012

v  Commercial vehicle sales in Bulgaria rise 26.9% y/y in January 2012

v  Bulgaria announces competition for construction of Struma Motorway section

v  Turkcell may submit USD 1.4 bln bid for Vivacom - report

 

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria’s Business Climate Sees Slight Decrease Feb 2012

Bulgaria's total business climate index has registered a 2.4% decrease in February 2012 as compared with the previous month, according to the country's National Statistical Institute. A worsening business climate has been observed in the Bulgarian construction,retail trade and service sectors. The business climate in industry has preserved its level from the previous months despite a decrease in production activity. The main factor limiting the activity of the enterprises remains the uncertain economic environment, even though its negative impact has decreased over the last month. In February, Bulgaria's business climate in the construction sector decreased by 2.3% as compared with January. The uncertain economic environment and financial problems continue to be the main factors limiting the activity in the constructionbranch, followed by insufficient demand. Construction activity forecasts for the next 3 months are more favorable. The business climate in retail trade decreased by 1.9% in February. However, retailers have expressed optimism in their prognosis for the next three months. February saw a 7.6% decrease in Bulgaria's service sector business climate. The Institute's survey shows a decreased demand for services over the last 3 months and relatively moderate expectations for the next 3 months.

 

Bulgaria’s industrial PPI grows 5.3% y/y in Jan 2012

The industrial producer price index (PPI) increased by 5.3% y/y in January, speeding from 4.1% y/y in December thus breaking the downward trend from H2 last year, statistics office data shows. In monthly terms, producer prices advanced by 1.7% after flattening out in December. The higher inflationary pressure in January was due to acceleration of the price increase of the utilities (up by 5.1% y/y in January as compared to 2.7% y/y in December) following upward corrections of natural gas prices as of Jan 1 as well as to more expensive manufacturing goods (6.3% y/y growth speeding from 5.5% y/y). At the same time, the prices of the mining industry declined by 3.4% y/y speeding from 3.2% y/y a month earlier. In terms of final use, the price growth accelerated in energy (from 4.7% y/y in December to 7.9% y/y in January) only while in all other sub-groups the inflationary pressure eased. The broader index including export sales also accelerated to 4.8% y/y in January as compared to 4.1% y/y in December. 

 

Bulgaria’s general budget deficit narrows by 37.6% y/y in Jan 2012

The general budget posted a deficit of BGN 297.8mn (EUR 152.3mn) in January 2012, down by 37.6% y/y, according to preliminary data of the finance ministry. The gap accounted for 0.36% of the full-year GDP projection as compared to 0.63% of GDP a year earlier. Total budget revenues increased by nominal 13.4% y/y and 10.8% y/y in CPI-deflated terms. The respective increases in tax revenues were very close to the total. VAT revenues, up by nominal 25.1% y/y to nearly 50% of the total revenues, had the largest contribution for the revenues expansion. Total expenditures rose by 2.1% y/y in January. The general budget deficit fell by 43.2% y/y to BGN 1.58bn (EUR 809mn) in 2011 to 2.1% of the full-year GDP flash estimate, running below the target of 2.5% of GDP set in the budget law. The government will target a budget deficit of 1.35% of the projected full-year GDP in 2012. 

 

Economic slowdown in Bulgaria shows in corporate balance sheets

Bulgaria's economy is slowing down and this is reflected in consolidated balance sheets for the latest quarter, Capital Daily said, quoted by local news agency Focus. Results are better, but at a slower rate compared to previous quarters. Оne of the reasons for this is the increase in costs which leads to a profit-margin contraction. At the same time, exports are also declining, leading to a fall in profits compared to 2011. "After the first signs of economic slowdown in Bulgaria’s key foreign-trade partners in the EU, it was logical to see the first signs of slower economic growth in export companies," Boncho Ivanov, Portfolio Manager at UBB Asset Management, said. Mincho Minchev, Chief Dealer at Investbank, pointed out that results of the individual companies are heavily dependent on the performance in their sector. Minchev said that industrial, agricultural, and export companies are registering growth, but public construction companies "have deteriorated considerably" and are on the verge of bankruptcy". Svetoslava Mitisheva, broker at Bulbrokers, thinks that first-quarter results will be "rather unsatisfactory".

 

INVESTMENTS:

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's Solarpro opens branch in Macedonia

Local company Solarpro has opened a branch in Macedonia, the company informs through the local stock exchange. Solarpro claims to be the country’s largest company from the photovoltaic sector. It operates 18 photovoltaic projects, 10 of which with total production capacity of 30 MWp have been already completed and inaugurated. The capacity of the projects, which are still to be wrapped up, stands at some 40 MWp. Solarpro is controlled by Alpha Finance Holding. 

 

Varna airport resumes operations

The airport in the northern Black Sea city of Varna resumed operations on Wednesday (February 29, 2012), as the repair of its runway was completed in line with schedule, investor.bg informs quoting information from the concessionaire Fraport Twin Star Airport Management. The official opening will take place on Sunday (March 4). Fraport has invested some BGN 40mn (EUR 20.5mn) in the project. We remind that the airport closed on October 15, 2011 when the renovation started and all the passenger traffic was transferred to the other Black Sea airport in the southern city of Burgas. In August 2011, Fraport Twin Star Airport Management signed a contract with the local arm of Germany’s Max Boegl Bauunternehmung for the reconstruction. Fraport Twin Star Airport Management, a 60/40 joint company of Fraport and local BM Star, operates the two sea airports under a 35-year concession contract since 2006. 

 

Competition for Sofia metro-line extension attracts 15 bidders

A total of 15 companies have submitted offers in the tender for extending the metro line in the capital city of Sofia, state-run news agency BTA reported. Some 44 companies bought tender documents. The indicative value of the project is set at some EUR 168mn, EUR 130mn of which will cover the construction of the track. The project should be completed by the end of 2014. The length of the new section is almost 5km. 

 

 

State companies pay EUR 89mn in dividends to Bulgaria’s state budget in 2011

Bulgaria's state-owned companies paid BGN 174mn (EUR 89mn) in dividends to the state budget in 2011, finance minister Simeon Dyankov said, as quoted by Dnevnik Daily. The state received dividends in the amount of BGN 112mn in 2010 and BGN 344mn in 2009, respectively. Bulgarian Energy Holding (BEH), which recently announced that it has posted some BGN 500mn pre-tax profit in 2011, is among the entities owned by the state. 

 

Sales of Bulgaria’s battery producer Monbat fall 32.9% in Jan 2012

The net consolidated sales of Bulgaria’s largest car battery producer Monbat (including Monbat Recycling) decreased by 32.9% y/y to BGN 14.1mn (EUR 7.2mn) in January 2012, according to information posted on the website of the local stock exchange. The pre-tax profit of the company plummeted by 89% y/y to BGN 299,000 in January. The company explains the deterioration with lower demand during the month, decrease in its inventories and planned annual repair of the local units of Monbat Recycling. The net consolidated sales of Monbat increased by 12.9% y/y to BGN 213.2mn (EUR 109mn) last year and its pre-tax profit rose by 6.7% y/y to BGN 21.3mn. In December 2011, sales went down by 16% y/y and its profit fell by 13.7% y/y. 

 

Commercial vehicle sales in Bulgaria rise 26.9% y/y in January 2012

The total sales of new commercial vehicles, which include vans, trucks, buses and coaches, in Bulgaria rose by 26.9% y/y to 250 units in January 2012, data by the European Automobile Manufacturers’ Association shows. The sales in all EU countries declined by 4.7% in a year to total of 141,120 units. In 2001, sales of new commercial vehicles in Bulgaria fell by 6.6% to 2,927 units while the EU 27 market expanded by 9.9% to total of 1.94mn units, respectively. Last year, the local car importers association said it will discontinue announcing vehicles sales statistics as it believes numbers are affected by cars re-exports and do not reflect correctly domestic demand. 

 

Bulgaria announces competition for construction of Struma Motorway section

The state road infrastructure agency opened a procedure for selecting a company to construct the 37km section of Struma Motorway between the towns of Dupnitsa and Blagoevgrad, the institution informed in a note on its website. The indicative value of the project is set at BGN 200mn (EUR 102.3mn), VAT excluded. It will be financed from the EU Cohesion Fund under the country’s transport operational programme. Struma Motorway will link the capital city of Sofia with the Greek border in the south-western area of the country. Its total length stands at about 156 kilometres, 133 kilometres of which remain to be built. 

 

Turkcell may submit USD 1.4 bln bid for Vivacom - report

Turkish operator Turkcell may submit a bid for Bulgaria's incumbent telecommunications operator Vivacom, valuing the Bulgarian company at about USD 1.4 billion, according to Bloomberg citing people with knowledge of the process. The bidding will be discussed by Turkcell's board as soon as this week, said one person, who declined to be identified because the process is private. While Turkcell's management is eying Vivacom, a deal would need the approval of its board, which has blocked proposed deals before. Turkcell is evaluating potential investments abroad, including a possible bid for Vivacom and there's no board decision on any bid, the company said in a statement to the Istanbul Stock Exchange on 1 March. VTB Capital, one of the three strategic business arms of VTB Group, is considering the acquisition of Vivacom together with Sofia-based Corporate Commercial Bank , said VTB Capital CEO Atanas Bostandjiev in an interview in Sofia on 1 March. Three binding bids have already been submitted for the company, the Bulgarian newspaper Capital reported. The other bidders include Icelandic billionaire Thor Bjorgolfsson, who controlled Vivacom between 2005 and 2007 and has bid with Panos Germanos, who founded the Greek phone-services retailer Germanos. The third bidder to meet the 27 February offer deadline is Pamplona Capital Management, a UK-based private equity firm, according to the newspaper.

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea