Friday, 10 April 2020

HBOR Says Loans Worth More Than 13.5 Billion Kuna Available to Real Sector

ZAGREB, April 10, 2020 - The European Commission on Thursday approved a second Croatian scheme for support to the economic sector in the context of the coronavirus pandemic, and the total credit potential of the two schemes is €1.8 billion (more than HRK 13.5 billion), intended for the real sector.

The schemes were approved on the basis of the Temporary Framework for State Aid Measures, adopted by the European Commission on March 19 and amended on April 3, the Croatian Bank for Reconstruction and Development (HBOR) said in a statement.

The first scheme, totalling €790 million (HRK 6 billion) and approved by the EC a few days ago, secures credit potential for exporters' liquidity in the form of insurance policies.

In cooperation with the Finance Ministry, a few days ago the HBOR put forward a second scheme, intended for small, medium and big enterprises affected by the coronavirus crisis and in need of working capital.

Under the scheme, the HBOR will provide favourable loans, with interest subsidised by the state. The total credit potential of subsidised loans is estimated at one billion euros.

More business news can be found in the dedicated section.

Wednesday, 8 April 2020

Two of Croatia's Larger Private Companies Tighten Belts, Predict Down Year

April 8, 2020 —  One of Croatia’s larger private companies is warning of a 2020 so bad, it still cannot forecast the losses. Another cut management-level salaries to avoid layoffs. 

Atlantic Grupa and Adris Grupa, two of Croatia’s more-prominent private companies, face a dismal 2020 as measures to stop the spread of coronavirus limit consumer spending and hurt bottom lines.

Adris, a diverse conglomerate with holdings in everything from tourism to the nation’s largest insurance company, said anti-COVID-19 measures would have a significant impact on its revenues. But it is avoiding layoffs. Instead, it will cut management-level salaries by 30 percent for three months, with an option to extend another three.

It also promised it won’t lay off any of its 8,000-plus employees.

“Regardless of the circumstances domestically and globally, and of the severity of economic and social situation, Adris Management Board decided that no employees would be laid off,” company said in a statement. “The investments that have already been agreed and investments that have been launched will be realized, and preparations for planned projects will also continue.”

Atlantic Grupa offered a dour outlook, saying it’ll fall short of its 2020 targets, though it cannot say by how much.

“Due to the uncertainty related to COVID-19 pandemic, both from the perspective of its impact on the economy and consumption and from the perspective of its uncertain duration, the impact on our financial and operating results cannot be estimated in more detail at this time,” it said in a letter, adding it'll have a better understanding of the situation by the end of the month.

The company finished 2019 with HRK 187 million in profits, an increase over the previous year.

“Market policies and initiatives to reduce the spread of COVID-19 have significantly increased across all Atlantic Grupa’s key markets,” the company wrote. “These initiatives, among others, have a significantly negative impact on tourism and hospitality industry, as well as on many other sectors, considering that they include closure of hotels, restaurants and cafes, the cancellation of all sporting and entertainment events, significant limitations in travel, insisting on social distancing, shorter working hours of grocery stores with full closure of almost all other stores, and the adoption of work from home policies wherever possible.”

It added that it supported any and all measures being taken to stop the virus’s spread, and will weather the coming economic downturn.

“We have entered into this situation from a very strong financial position and record-high results in 2019, which enables our business continuity even in these difficult market circumstances,” it wrote.

The conglomerate sells several Balkan drink and snack staples, including Cedevita, Smoki and Cockta. It also owns the Farmacia pharmacy chain. It will donate HRK 28 million to various crisis headquarters and health institutions around the region.

Adris Grupa’s annual income is slightly over HRK 3 billion. It owns hospitality group Maistra, fish-farming and processing firm Cromaris, and it recently bought insurance company Croatia Osiguranje, among others. The company has so far donated HRK 3 million to Pula and Rijeka’s hospitals to buy ventilators, as well as HRK 2 million for Zagreb’s earthquake recovery.

Wednesday, 1 April 2020

103 Innovative Projects to Receive EU Grants Worth 342 Million Kuna

ZAGREB, April 1, 2020 - Economy Minister Darko Horvat has signed 103 decisions on project financing based on the call for applications "Innovations in S3 Areas", to be supported by EU grants in the amount of HRK 341.7 million (€44.96 million), the Economy Ministry said on Wednesday.

The purpose of the call was to encourage SMEs to commercialise their innovative products or services exclusively in line with identified priority thematic areas and inter-sector topics of the Smart Specialisation Strategy (S3), the ministry said in a statement.

Based on the call for applications, a total of 169 project proposals were submitted, worth HRK 1.4 billion, with the grants sought in the amount of HRK 580.1 million.

Of that number, 112 project proposals were assessed as positive and eligible for EU funding in the amount of HRK 364.3 million, while their total value is 943.6 million, the ministry said, adding that nine more decisions on project proposals remained to be made after complaints were analysed and certain explanations were obtained from the applicants in question.

Minister Horvat said that support for innovative projects would eventually help increase exports and boost the competitiveness of the Croatian economy on the global market.

More business news can be found in the dedicated section.

Tuesday, 31 March 2020

Coronavirus to Cost Thousands of Jobs, Steep Drops in Wages

March 31, 2020 — The coronavirus’s first non-medical victims are 8,000 workers facing unemployment, as well as 300,000 others facing steep paycuts down to minimum wage, according to Vecernji List.

The stark The Tax Administration yesterday said it received 39,047 requests from companies and craftsmen to delay their payment of taxes; one-third of the requests came from the hotel and catering industry.

In addition to companies and entrepreneurs who are banned from working, others with a drop in income of more than 20 percent, including the self-employed can count on government assistance in paying wages.

Prime Minister Andrej Plenkovic’s government met on Monday to create a new package of measures to alleviate the problems of entrepreneurs during the coronavirus epidemic. The measures reportedly include a freeze on administrative fees and compulsory contributions to the Ministry of Economy. Officials expect the plan will be adopted this week.

Under the proposal, oft-lamented fees would not be charged over the next three months, with an option to extend the measures if necessary. The cutback on compulsory payments would also include government fees for water usage, radio frequencies, and membership fees for the Croatian National Tourism Board, among others.

Sources told Vecernji some fee cancellations experienced headwinds, particularly the compulsory charge for Croatian Radio Television (HRT) service.

The Economic Ministry says some of the benefits now being discussed will be permanently abolished, in line with the plans for administrative relief already in the works before the crisis.

There are also rumors from Brussels that the minimum support given by the European Commission will be raised from the current €200,000 will be raised to €1 million.

In the two weeks of isolation, the number of unemployed citizens registered with the Employment Service increased by more than 6,000, but also information that three thousand workers had found a job. The fees cancellations would come as many small businesses worry for their future.

Croatia has approximately 100,000 active legal entities and about 80 thousand craftsmen. Already in the first week of implementation of the coronavirus measures, every fourth craftsman and every fifth company requested a tax deferral. 

The hospitality and tourism sector had 12,804 requests, the most of any.  More than 800 entrepreneurs from the health and social care systems, 762 from information and communication activities, and 639 from real estate businesses are also seeking a delay.

There is a lot of focus on public sector salaries as well. The Institute for Public Finance calculated that reducing public sector salaries would do more harm than good at the moment. 

Cutting the salaries of employees in institutions and companies where the government is the predominant employer would bring relatively modest savings of 0.38 to 1.22 percent of GDP annually, while the negative consequences would be much greater.

The negatives include a fall in citizens' living standards, a fall in spending, a loss of staff, the collapse of public institutions, and an even greater decline in GDP. However, the authors of the analysis do not dispute that, when the crisis is over, public sector wage cuts will eventually come to a head.

Tuesday, 31 March 2020

United Group Donates Protective Gear Worth $500,000 to Croatia

ZAGREB, March 31, 2020 - United Group, which includes several telecom and media companies operating in Croatia, decided to donate 5,600 COVID-19 test kits, 150,000 protective masks, 4,000 protective glasses, seven ventilators and other protective gear worth a half million dollars, the N1 broadcaster said on Monday.

United Group, a multi-play telecom and media provider in Southeast Europe, will donate $3 million worth of protective gear to the seven countries in the region in which it does business: Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, North Macedonia and Bulgaria.

The delivery of the donations starts this week. The donated protective gear and medical equipment was paid on 15 March.

The companies within this group that operate in Croatia are Tele2 Croatia, and United Media with channels: Nova, Doma, N1, Sport Klub, Fight Ch, Grand, Pikaboo, Vavoom, Mini, Lov i ribolov and IDJ.

More coronavirus news can be found in the Lifestyle section.

Thursday, 26 March 2020

HUP Leader: Private Sector Will Again Bear Brunt of Crisis

ZAGREB, March 26, 2020 - The president of the Croatian Employers Association (HUP), Gordana Deranja, told Hina on Thursday that no one was to blame for the COVID-19 epidemic but that she was afraid that the private sector would again suffer the most.

"The situation is not pretty, we are plagued by uncertainty, the economy is in a difficult state and we do not have a clear vision of what will happen next. It is clear that neither the government nor any of us are to blame for the epidemic, but I am afraid that the private sector will once again pay the biggest price," Deranja said.

She added that in the economy everyone "is asking for write-offs, and not for deferral", since the situation was a catastrophe.

"HUP leadership regularly communicates with the government and ministries, it is in contact with its members, we have suggested a series of measures, and it is normal that the government does what it thinks should be done. Of course, we are not satisfied with the latest package of economic measures to help workers, entrepreneurs and the economy because we are asking for write-offs, not deferral," HUP president said.

She praised the national civil protection service and the healthcare system, as well as everyone taking care of the citizens' health and standing "on the front line of defence".

"None of us know if the crisis will last for a month or two or even longer. We do not know what tomorrow holds, but we do know that there are already many of those who cannot work, which means we do not have an income. If we do not have an income, we cannot pay people since we do not have a budget like the public sector, which we have been filling for years," Gordana Deranja said.

She said that this time the private sector stood together and would not let itself be completely destroyed.

"The economy is suffering all over Croatia. It is impossible to deliver materials, many demand advance payment, and orders have come to a halt. It is a disaster, it is nobody's fault, the whole world is in this together, but then we have to show solidarity, stay at home and respect the decisions. But then there we should also be eligible for write-offs and for exemption from tax and duty payments. Imagine, the Ministry of Tourism has generously relieved us of paying tourist board membership fees. Come on, what tourism are we talking about, this is ridiculous," Deranja said.

More coronavirus can be found in the Lifestyle section.

Tuesday, 24 March 2020

Business Sector Calls for Being Freed from Payment of Dues

ZAGREB, March 24, 2020 - The Croatian Chamber of Commerce (HGK) and the Croatian Employers' Association (HUP) on Tuesday said that the business sector affected by the coronavirus epidemic urged the government to exempt them from paying all their contributions rather than allowing for deferred payment.

"We welcome the government's first package of measures to support the economy," HGK president Luka Burilović said, adding that the Chamber had actively participated in the preparation of that rescue package.

In line with the demands of our members the Chamber of Commerce recommends that the second set of measures exempts those companies faced with problems from the payment of all contributions, including contributions and taxes on wages and of membership fees. That means exemption of payments and not deferment," Burilović underscored.

He underlined that this crisis, unlike the last, requires consumption and measures to boost consumption instead of austerity measures.

"In that light in fact, we need to absorb EU funds as much as possible, now when the European Commission is showing greater flexibility," adding that in that context the government should consider additionally covering the cost of wages by HRK 5,000 for each employee in companies affected by the crisis.

Burilović underscored that the Chamber calls on banks for a moratorium on all loan liabilities for those physical and legal entities affected by the crisis, for at least six months without charging any fees or interest.

Director-General of the Croatian Employers' Association (HUP) Davor Majetić underscores that employers are asking that all contributions and para-fiscal fees be temporarily abolished because of the hardships in conducting their business.

"It is obvious to everyone by looking at the number of people registering with the Employment Service for the payment of HRK 3,250 that the situation is critical," Majetić told Hina.

More coronavirus news can be found in the Lifestyle section.

Monday, 23 March 2020

Employers Call for Urgent Write-Off of Dues, Access to Money

ZAGREB, March 23, 2020 - The Croatian Employers Association (HUP) has called for a write-off of all dues and for access to liquid assets through various institutions for employers affected by the coronavirus crisis.

HUP director Davor Majetić said in a statement that in negotiations it had been conducting lately HUP wanted to achieve several goals.

The first goal is for all employers affected by movement restrictions to get nonrepayable grants for the payment of wages and for their operations.

HUP wants government bodies at all levels not to send them any bills and to write off all employers' dues (non-tax levies, concessions, membership fees, and public utility charges) for the duration of the crisis.

It calls for the suspension of all other taxes and concession fees rather than their postponement for the duration of the crisis, a lower profit tax rate and the postponement of the payment of profit income advances as well as the cancellation of the obligation to issue salary statements for directors.

HUP also demands loan rescheduling and refinancing, ensuring the international flow of goods, declaring a force majeure and postponing deadlines for the submission of reports, forms and statements of accounts due to difficulties caused by the pandemic.

More coronavirus news can be found in the Lifestyle section.

Tuesday, 17 March 2020

Analysis of INA's Operations, Value to be Completed in Q2

ZAGREB, March 17, 2020 - The Council for INA on Tuesday accepted a report by its investment consultant on the course of due diligence in the Croatian oil company, defining the course of further activities for the possible purchase of INA shares held by the Hungarian oil and gas group MOL.

An analysis by the investment consultant on company's operations and value is expected in the second quarter, the government said in a statement.

The INA Council, an advisory body tasked with providing guidelines, taking action and putting forward proposals to the government regarding preparations for, implementation and financing of the possible purchase of MOL's stake in the company, held its 11th meeting today under the chairmanship of Prime Minister Andrej Plenković.

Representatives of the Lazard investment consultant and other professional consultants submitted a report to the Council on the course of due diligence in INA via video link.

"The Council accepted the report and determined the course of further activities in the process of the possible purchase of MOL's interest in the company, as part of which an analysis by the investment consultant of the company's operations and value can be expected in the second quarter of this year," said the government.

More INA news can be found in the Business section.

Saturday, 14 March 2020

ZSE Indices Recover at End of Another Bad Week

ZAGREB, March 14, 2020 - The main Zagreb Stock Exchange (ZSE) indices on Friday increased by approximately 6%, recovering in part after the previous day's losses which exceeded 10%, however, on the weekly level they sank for the third week in a row, by nearly 17%.

On Friday, the Crobex index rebounded by 5.78% to 1,512 points, and the Crobex10 by 6.04% to 902 points. All sector indices were in the green today, and the building sector increased the most, by 8.26%.

The main stock exchange indices recouped a part of the previous day's losses, when they sank by more than 10% in the first minutes of trading, to their lowest levels in the last 11 years. Consequently, the ZSE suspended trading for an hour yesterday, and afterwards, the Croatian Financial Services Supervisory Agency (HANFA) decided to suspend trading until the end of the day.

Including the previous day's decrease, the ZSE indices plunged by 16.9%, and, consequently, around HRK 13.8 billion of stock market value was deleted from the stock exchange.

On Friday morning trading was resumed, and in the course of the day indices soared by up to 7.5%. Their recovery today was for the largest part stimulated by the recovery of stock prices at the European stock exchanges, which followed yesterday's record fall, and which was influenced by investors' hope that the measures adopted by a series of central banks and governments in the world would mitigate the impact of the coronavirus pandemic on the economy.

At the Zagreb Stock Exchange, regular turnover reached HRK 52.9 million, and almost HRK 53 million was realised in block trading.

The Adris Group stock realised HRK 35 million in regular trading, followed by the Valamar Riviera hotel group stock (HRK 8.5 million), the Podravka food and pharmaceutical company stock (HRK 3.35 million), Končar Electrical Industry (HRK 3.23 million), and Arena Hospitality Group (HRK 2.86 million).

The HT Telecom stock was the most liquid in regular turnover, realising HRK 9.24 million, with its price rising by 3.73%, to HRK 153 per share.

The Valamar Riviera hotel group stock turned over HRK 8.3 million, and its price increased by 10.68% to HRK 22.8 per share.

The Podravka food and pharmaceutical company stock turned over HRK 6.83 million, and its price skyrocketed by 16.56% to HRK 373 per share, making it the winner among the most liquid stocks.

More business news can be found in the dedicated section.

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