Business News

In Business News this week: Czech banks boost collective profits; apartment prices surge in second quarter; uncertainty over future of Aircraft Industries; ČEZ extends outage for Temelín reactor; exports to Russia continue to slide.

Banks see profit rise in first half of year

Photo: Eva Odstrčilová

The aggregate net profit of banks in the Czech Republic increased in the first six months of 2016 by 7.27 billion crowns year-on-year to 44.73 billion, according to the data release by the Czech National Bank on Thursday. The banking sector’s total assets amounted to 5.84 billion crowns at the end of June, which is an increase by 375 billion compared to the end of 2015. The banks recorded a 98.43 billion profit from financial and operational activities, a year-on-year increase by 10.3 billion crowns.

Apartment prices soar in second quarter

The average price of apartments in Prague and other regional towns in the Czech Republic increased by 11.1 percent year-on-year in the second quarter of 2016, according to the price-tracking website cenovamapa.org. The average price per square metre in Prague was 60,300 crowns, while in Ústí nad Labem, square metre is sold for 11,400 crowns. The quarterly increase was 6.1 percent, which is the fastest growth since 2010. The sales of apartments in the second quarter amounted to 20 billion crowns.

Industry minister seeks assurance over Aircraft Industries’ future

Minister of Industry and Trade Jan Mládek has appealed for intervention by his Russian counterpart, Denis Manturov, to intervene in the problems of Czech aircraft company, Aircraft Industries. Mládek said the Russian-owned company has run up debt and without help from UGMK it’s future is uncertain. Aircraft Industries, based in the far east of the country, had a wealth of technological know-how and many skilled craftsmen, the minister added. Unions earlier warned that they would take strike action because of the deteriorating situation at the Czech company. Mládek added that he had proposed a meeting in Prague of all parties concerned. The company makes the LET aircraft but sales in one of the main markets, Russia, have dropped sharply. Many of the 900-strong workforce have been forced to take leave with reduced wages with fears now that production will be shifted to Russia.

More nuclear woes for ČEZ

Photo: Filip Jandourek

Czech dominant domestic power company ČEZ said Wednesday that it has revised its target for the second reactor at Temelín to start producing power again. The company, which is around 70 percent state owner, said on September 8 that it expected a two week outage to check on turbine systems. That target has now been put back to October 1. The reactor previously returned to service for around one day after an outage lasting from the start of June. The Temelín power plant is a sore point with neighbouring Austria particularly after the many early problems following its commission.

Double digit drop in exports to Russia to July

Czech exports to Russia have continued to decline this year, falling by 12 percent year-on-year in the period from the start of January to the start of July, according to figures released by the Czech Statistics Office on Tuesday. While the Russian federation was the destination of nearly 4 percent of Czech exports in 2012, that figure has now fallen to just 1.7 percent. EU sanctions imposed on Russia over its role in the annexation of Crimea are seen as a main reason for the trend. However, the Czech Chamber of Commerce says there are other factors involved, including Germany’s increased share of Czech exports on the back of the Czech crown’s weakness toward the euro.