In this week’s Business News: economy enjoys late spurt; depressed construction sector managers falsify figures; low rates hit big banks; iconic porcelain producer hikes profits; and closely observed train drivers.
The Czech economy grew by one of the fastest rates in Europe in the last quarter of 2013 with a 1.6 percent advance compared with the previous three months. That rate of growth is believed to be the second only to Romania in the rest of Europe. In spite of the late spurt, the Czech economy as a whole is expected to have shrunk by 1.1 percent over the entire year.
The sad state of the Czech construction sector is perhaps summed up by managers who cooked the books to cover up disappointing results at one of the biggest building companies. The more than creative accounting by three managers at the Czech unit of Swedish building group Skanska contributed to a sharp drop in 2013 profits to nearly 900 million crowns. Skanska, which boasted a clean image in a somewhat murky sector, said it had laid off the managers and shaken up internal procedures.
Low interest rates have dented profits for two of the country’s biggest banks. Komerční Banka declared a just over 10 percent fall in net profit for 2013 while ČSOB was 11 percent down on the previous year. Cleaned up of exceptional factors, Komerční Banka said its profit drop was just 5.6 percent with ČSOB stating a 3 percent fall. The remaining third big bank, Česká Spořitelna, should declare its results at the end of the month.
Strong exports to the Far East and Russia have helped traditional porcelain producer Český Porcelán boost its 2013 profits by around 10 percent to around 5 million crowns. The manufacturer, which celebrates its 150th anniversary this year, exports around 60 percent of its output. This includes dishes in the traditional Czech ‘blue onion’ design as well as porcelain figures, which are particularly popular in Russia.
Rail passenger company Czech Railways is seeking another round of cost savings with train drivers the subject of close scrutiny. The company has installed global positioning and other monitoring systems to work out if fuel consumption really corresponds to the distances travelled. First results of monitoring show 10 percent or higher differences in fuel consumption. In some cases, drivers are leaving motors running or travelling needless extra kilometers. Fuel theft could also be a factor. With a 2 billion crown annual fuel bill, the rail company believes tens of millions could be saved.