In this week’s Business News: number crunchers confirm economic recovery; Popron Media heads for history; public tenders shrink in 2013; energy regulator in the hot seat in court; and the chips are down for one of the biggest snack producers.
Trade, production, and construction on the rise
A slew of statistics this week testify to the recovery of the Czech economy. April trade figures showed a surplus of 16.5 billion crowns, slightly better than a year earlier. The trade surplus so far this year has swollen to almost 70 billion crowns, around 20 percent higher than in the first third of 2013. Industrial production was 7.7 up in April on the same month last year, which is slightly lower than in March, with the suffering construction showing similar growth.
Popron Media owners launch insolvency proceedings over debts
The owners of one of the biggest and best known film and music distributors in the country are filing for insolvency. Owners of Popron Media say they have no alternative with around 450 creditors lining up for debts totalling around 144 million crowns. Popron Media has fallen on hard times since its peak in 2008. The economic recession, lower spending on music and films, and the drift to Internet purchases are blamed for the company’s decline with losses registered every year from 2010 onwards. The final nail in the coffin was a 50 percent drop in sales at the end of 2013.
Tender volume falls in 2013
The volume of public tenders from the state and state firms shrunk by 18 billion crowns, or almost 4.0 percent, last year according to the Ministry of Regional Development. It said the development was the result of ongoing cuts in government spending. The volume of tenders has been falling since 2009. The biggest beneficiary in 2013 was construction firm Eurovia, followed by rivals Hochtief and Metrostav. Tenders now account for a quarter of all public spending compared to around 30 percent five years ago.
Spotlight on energy regulator in solar connection court case
The controversial head of the Czech national energy regulator has been in a Brno court for most of the week fending off charges that she was part of a conspiracy to earn billions for a solar power developer. Alena Vitásková is accused of failing to rescind the licence of two solar power plants awarded prematurely so they could earn higher state subsidies. Extra earnings are estimated to have added up to 2 billion crowns. Vitásková denies the charges and says they have been fabricated in a bid to unseat her. She and other defendants could face sentences of up to 12 years if found guilty.
Sour taste for snacks giant
The Czech Republic’s biggest potato crisp producer is digesting some of its worst results in recent time. Bohemia Chips saw turnover slide by 8.0 percent last year to around 1.37 billion crowns. That is the third year running that sales have shrunk. Profits were down around 40 percent to around 74 million crowns. Better times are not expected this year with domestic demand seen flat and exports slightly down. The Czech producer is part of a German-based multinational, Intersnack Group, with annual turnover of over 2 billion euros.