Exchange In Z³oty, December 15, 2009 National Bank of Poland MID-RATE 1 EUR 4.1667 1 USD 2.8635 1 CHF 2.7549 1 GBP 4.6600 1 AUD 2.5996 1 CAD 2.6986 1 RUB 0.0948 100 JPY 3.2117 1 CNY 0.4197 1 CZK 0.1598 100 ISK 2.2651 100 HUF 1.5104 1 NOK 0.4909 1 SEK 0.3992 1 DKK 0.5599 1 LTL 1.2067 1 LVL 5.8952 1 EEK 0.2663 1 RON 0.9804 1 BGN 2.1304 1 UAH 0.3583
Weather Today Grey, cloudy and cold, but dry. High: -5C/23F Low: -9C/16F Thursday Getting progressively colder with light snow. High: -9C/16F Low: -10C/14F
Focus Today’s Puls Biznesu headlines: •Giants will invest and layoff •Freezing temperatures help the shoemakers •Silesia is attractive •EGB Investments returns to its founders •Brokers planning leverage for the bull market
Name days Today Alina, Zdzis³awa Bean, Euzebiusz
Thursday Jolanta, Olimpia Florian, ¯yros³aw
Wednesday, December 16, 2009
Warsaw Business Journal’s daily news update
www.wbj.pl
Tel.: (48 22) 639-85-67/68, Fax: 639-85-69
Highlights Business Economics Politics International
HIGHWAY DELAYS LEAD TO SEVERED CONTRACT INFLATION CLIMBING BUT SHOULD DROP OFF NEXT YEAR MULLING OVER CHANGES TO PENSION SYSTEM NEW GERMAN APPOINTEE HAS TIES TO WARSAW
Domestic SOLIDARITY IN WARSAW TO PROTEST RANGE OF PO POLICIES Real Estate
J.W. CONSTRUCTION BREAKS GROUND ON NEW VENTURE
Business
GDDKiA fires contractor over highway delays The General Directorate for National Roads and Motorways (GDDKiA) has cancelled a contract worth over EUR230 million with Austrian concern Alpine Bau for the construction of the Œwierklany-Gorzyczki highway. This is the second time in history that such a radical decision has been made after talks with the investor. "A similar situation took place a few years ago with Acciona. After a nine month long break the investor returned to complete the construction. This is how the breach of contract ended," said a representative of a construction company. "The company constantly failed to meet the deadlines set in the contract. The advancement of work should currently be at 85% and it is at the level of 50%," said the spokesperson of GDDKiA, Marcin Hadaj. Representatives of the Austrian company do not feel guilty and suppose that there could have been two reasons for the decision. "We assume that the first is the prolongation of the execution of the contract and our claims reaching over EUR21 million from the Directorate. GDDKIA accepted them but did not sign the annex. […] the second reason is the fact that we questioned the ordered project of one of the bridges, which is threatened with catastrophe," said Jaros³aw Duszewski of Alpine Bau. (Puls Biznesu, pp. 1, 4) A.K.
Samsung to make major investment in factory Rzeczpospolita reports, quoting unofficial sources, that "Amica will sell its washing machine and refrigerator production plants to Samsung for around z³.200 million." The manufacturing facilities will continue to produce orders for both of the firms, but will be enlarged. The investor is considering doubling the production capacity and employment within a few years. The negotiations with one of the largest electronics producers from Korea have been in progress for the past few months. The details have already been settled and the finalization of the strategic agreement is close. However, representatives of the companies involved do not want to officially comment on the news. Amica is the third largest player on the domestic white goods market with a 12.5% market share. It employs 2,500 people. Samsung controls a 4.4% share of the market. (Rzeczpospolita, p. B1) A.K.
Direct sales approach not catching on for PZU A year after the launch of direct sales of insurance policies via the internet and telephone, PZU has collected z³.1.5 million in contributions in the first three quarters of this year through these sales channels. Throughout the year, the figure is expected to reach around z³.2 million. When,
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Wednesday, December 15, 2009
In Brief
Nowy Styl busy in South Africa Domestic enterprise Nowy Styl has installed almost 100,000 seats in two stadiums in the Republic of South Africa, where next year's football world championships will be played. The value of the orders amounted to between z³.10-20 million. Representatives of the company are currently in talks with the contractors building the stadiums in Poland. (Parkiet, p. 4)
iRuch to be launched in 2010 The management of press distributor Ruch has approved the launch of an internet project, iRuch, which will provide media in pdf format, which will make it easier to read on computers and smart phones. "We are in negotiations concerning the terms for the development of software for such a project," said Bogdan Œcibut, board member at Ruch. The project is to be launched in Q2 of 2010. (Parkiet, p. 5)
IAI to float on New Connect Szczecin-based IT firm IAI will debut on the New Connect floor of the Warsaw Stock Exchange (WSE) on Wednesday. The company specializes in developing software for online stores, which is used currently by some 600 internet shops and warehouses. The proceeds are to be used on foreign expansion. In 2008 the firm generated z³.1.5 million in revenue and z³.388,000 of net
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on December 18 of last year, PZU's president Andrzej Klesyk announced the launch of PZUDirect, he informed that it will diversify the firm's distribution channels. Meanwhile, between January and September PZU collected a total of z³.6.17 billion in contributions, which means that the direct sales channel has generated merely 0.02% of the total revenues. Representatives of the company did not want to comment on the results. "Unfortunately we cannot give out the information. This is an internal issue for the company. We can only state that the costs of the project were much lower as compared to competitors using similar direct sales solutions," informed PZU's press office. Parkiet reports that out of a sum of z³.10 million earmarked for this year for the direct channel, the investments for the project stood at z³.330,000. (Parkiet, p.1) A.K.
Mirbud close to completing construction firm acquisition Property developer Mirbud will pay up to z³.70 million for a 100% stake in a company specializing in the construction of roads and bridges. The publicly listed enterprise signed the letter of intent with the acquisition target yesterday. It now has eight weeks to examine the financial and legal situation of the entity. The final condition of the take over will be the green light from the Competition and Consumer Protection Office (UOKiK). Parkiet reports that the acquired company generated over z³.110 million in revenues last year and a z³.11 million EBITDA profit. In 2009, the figures are expected to increase by some 10-20%. "The company that we are planning to acquire specializes in road construction, a segment which will develop very dynamically in our country in the coming years," said Jerzy Mirgos, Mirbud's managing director. "The acquisition is a part of our strategy which foresees an increase in the share of revenues generated from the road construction segment to 30-40%," he added. In 2008, only 4.1% of the firm's revenues from construction came from this segment. (Parkiet, p. 4) A.K.
Swissmed to build long planned second hospital Medical firm Swissmed will soon commence the construction of its second hospital, a project which has been planned for nearly two years. The hospital will be located in Warsaw. "This took so long because we had to adjust the investment policy to the changing market situation. We will build a completely new hospital. We are finalizing the preparations for the execution of the project," said Swissmed's CEO, Roman Walasiñski. In relation to the investment, the company has guaranteed itself a capital injection of z³.16.75 million. Until the end of February, a general shareholders meeting will be held which will decide on the issuance of up to 9 million new shares. These will be taken over by Dom Maklerski Rubicon Partners (7 million shares) and the firm's main shareholder, Bruno Hangartner (2 million shares). "The raised sum will not be enough to finance the whole investment but will enable its start," said Walasiñski, adding that the company has already prepared a plan to finance the whole project. (Parkiet, p. 5) A.K.
Economics
Inflation rate climbs to 3.3%, should drop off soon The Central Statistical Office (GUS) informed yesterday that prices paid by consumers in November were 3.3% higher than in the same month of the previous year. The year on year inflation was 0.2% higher than in October. The prices were pulled up mainly by the food sector, where the increase was 0.7% as compared to the previous month and petrol the price of which jumped 0.9%. The main reason behind the more than 3% increase in prices was an escalation in fees on flats and food prices. The inflation would have been even higher if it was not for a fall in the prices of clothing and shoes. According to analysts, in December as well as in January the inflation will again be higher, but next year the dynamics will begin to
Wednesday, December 16, 2009
In Brief profit. (Parkiet, p. 7) A.K.
Interviews and then a vote
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reverse. Within less than 6 months, the inflation rate is projected to drop to 2.5%, according to the target of the Monetary Policy Council (RPP). (Rzeczpospolita, p. B4) A.K.
Politics
Proposed change to retirement system considered
Law and Justice (PiS) deputies which were banished from the gambling commission on December 4, have now been called as witnesses to be interviewed by the remaining members of the same commission. After the interviews take place on Friday, the Sejm will once again vote on whether to reinstate them to the commission. (Gazeta Wyborcza, p. 5; Rzeczpospolita, p. A5)
The Labor Ministry is continuing its preparations to revolutionize the retirement system. This time the idea is to let the people decide at which age they want to retire. "We could totally eliminate the highest retirement age," said Labor Minister Jolanta Fedak. The plan is simple. Today, in order to retire, a woman has to be 60 and men have to be 65. Under the new proposal, the government or the parliament, it has not yet been decided which one of them, would settle on a "minimum proper retirement." According to this, "the person who would exceed this threshold could quit the job regardless of age," added Fedak. The Labor Ministry has not decided on the amount of the proper retirement, as today the benefit cannot be lower than z³.675 gross, while the average retirement benefit, according to the Social Insurance Office (ZUS), amounts to z³.1,500 gross. There is a disadvantage for early retirees, however. "These people would have to take into account that they will receive a lower benefit," said Fedak. (Gazeta Wyborcza, p. 1) A.K.
Senator in hot water
Germany appoints new envoy for relations with Poland
Senator Krzysztof Piesiewicz has suspended his membership in Civic Platform's (PO) Parliamentary Club. The decision came after it was revealed that the prosecutor has not only recordings but also testimony from witnesses confirming that the politician took drugs. (Rzeczpospolita, p. A4)
Presidential no comment President Lech Kaczyñski has refused to issue an opinion regarding the appointment of Pawe³ Wojtunik as the new head of the Central Anti Corruption Bureau (CBA). Prime Minister Donald Tusk, after the gambling affair came to light, dismissed Mariusz Kamiñski from the post and appointed Wojtunik as acting head. (Rzeczpospolita, p. A5) A.K.
International The Deputy Foreign Minister in Germany, Cornelia Pieper, was yesterday appointed as the coordinator for cooperation with Poland. The politician speaks Polish fluently as she has spent several months living in Warsaw and studying the language in 1980. "I was a witness in Warsaw, when Poles went to the streets to protest against the communist party," she said adding that the citizens of the former East Germany owe a debt to Poland. Pieper is planning an official visit to Warsaw in January. (Rzeczpospolita, p. A12) A.K.
Domestic
Solidarity out in force to protest array of PO policies "Work and bread" and "Criminals - for devastation of the country and the nation - noose", were some of the slogans shouted out by several thousand Solidarity trade union members in Warsaw yesterday. On their website they promoted the protest with a poster showing Poland being squeezed by a black octopus, which is meant to symbolize Civic Platform (PO) crushing the shipyards, health care, mining, education and the energy sector as well as the arms industry. Surrounded by the police and in front of the Prime Minister's Chancellery, they burnt tires and threw petards. Two police officers were lightly injured. The trade unionists' postulates were then handed to the PM's head of advisers, Micha³ Boni. (Rzeczpospolita, p. A6) A.K.
Real Estate
J.W. picking up the pace in commercial sector One of the leading property developers in Warsaw, J.W. Constuction, has commenced its first commercial investment in the capital city with groundbreaking on the office building Jerozolimskie Point. The five story building, with an available area for rent of 4,000 square meters, is to be finalized in 2011. The first stage of the investment will be financed from the company's own funds. This is not, however, the company's only commercial investment that the firm is planning to launch in the nearest future. In 2010 it plans to begin construction of a 22 story office building in Szczecin. In addition, and also next year, J.W. Construction will commence the construction of an office building and hotel complex in Warsaw. The enter-
Wednesday, December 16, 2009
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prise's main shareholder Józef Wojciechowski announced that in 2015 up to half of revenue for the firm will come from the commercial market. (Parkiet, p. 4) A.K.
Numbers in the News
Stock Watch
17%
Quick start loses steam as WSE closes slightly higher
of domestic enterprises are planing to reduce employment in H1 of 2010. (Rzeczpospolita, p. B2)
20 million is the number of personal bank
accounts
currently
active in banks in Poland.
After a good start on the Warsaw Stock Exchange (WSE), the mood of investors soured with time. Already by the middle of the day, the WIG20 index was below the level at which it closed the previous day and finally ended at the same level as on Monday. The leader of the trading session was broadcaster TVN which saw its share price increase by 2.84% after UniCredit analysts gave it the buy recommendation with a target price 19% higher than yesterday's closing. On the other side of the ledger were the shares of telecom giant TP SA, which lost 1.7% in value. Out of the 377 publicly listed enterprises, only 110 recorded an increase in value. Together with the rising value of the US dollar, the z³oty is on a downward trend as yesterday the exchange rate reached z³.4.20 to the euro. (Rzeczpospolita, p. B15) A.K.
(Rzeczpospolita, p. B2)
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