Business News

In this week’s Business News: Czech economic confidence takes fresh hit; Škoda reports strong sales and increased profits; the government is to increase the country’s petroleum reserves; Unipetrol reports significant losses; a survey finds that cleaners and politicians are the Czech Republic’s least prestigious professions and a Finance Ministry report says that taxing betting winnings is not viable.

Czech economic confidence takes fresh hit

Confidence in the Czech economy took another month on month hit in June, falling by 1.6 percent, according to new data from the Czech Statistics Office. Confidence in the retail and construction sectors saw a slight up-tick, while the service sector and manufacturing saw a decline. According to analyst Michal Kozub, cited by ČTK, confidence in the manufacturing sector is now at its lowest levels since the beginning of 2010. Meanwhile, Czech consumer confidence rose slightly in July, up to -28.3 from -29.3 the previous month. Consumer demand remained stagnant, with expectations for the ensuing three months also decreasing. Recent reports suggest that belt-tightening is impacting sectors such as the soft drinks industry, with sales of non-alcoholic beverages falling by 10 percent since 2004.

Škoda reports strong sales and increased profits

Škoda Rapid

The Škoda automobile company sold around 408,000 car units in the first half of 2012, according to new data released by the company. The figure represents a 12.6 percent improvement on the same period the previous year. Sales increased by 6.6 percent reaching €5.7 billion, with profits up by €449 million and sales up by 12.4 percent. The popularity of models such as the Roomster, Yeti and Octavia – as well as the Rapid, which is sold in India, are said to be behind the strong sales.

Government to increase petroleum reserves

The Czech government is to increase the country’s emergency petroleum reserves by ten days. This will mean that the Czech Republic will be able to last for 100 rather than 90 days on these reserves in the case of a disruption of regular oil supplies. The price tag for the extension is between 4.4 and 4.7 billion crowns over the space of two years. The move was undertaken in relation to the implementation of a new method of calculating the reserve supply required by the EU; this meant that under the new count, the Czech Republic would have been below the legally required threshold of 90 days. The new EU rules will also mean improvements in the way the reserves are stored and distributed.

Unipetrol reports significant losses

The Czech petrochemical company Unipetrol, which is a subsidiary of the Polish company PKN Orlen, experienced losses of 959 million crowns in the first half of 2012, according to newly-released data. The figure represents a dramatic reversal from the same period the previous year, when the company experienced profits of 463 million crowns. In the second quarter of 2012 alone, the company’s losses reached 598 million crowns despite an increase in revenues of 7.2 percent year on year. Unipetrol, which focuses on the processing and distribution of petroleum and petroleum products, said that the disappointing results were caused by “inventory re-evaluation losses” – which means that its fuel stocks were made less valuable by falling oil prices – as well as by a weak external macroeconomic environment. Majority owner PKN Orlen also reported second quarter losses of around €1.6m.

Survey: cleaners and politicians are least prestigious professions

Photo: archive of the Czech Government

A new survey from the CVVM polling agency has revealed what respondents believe to be the least prestigious jobs in the Czech Republic. The final three places in the poll were occupied by cleaners, ministers and members of the country’s parliament. Other professions with a particular low ranking were secretaries, priests, and salespersons. The most prestigious profession according to the poll was that of doctor, followed by scientists, teachers and nurses. The survey also revealed that three-fifths of respondents were satisfied with their jobs and that only seven percent were significantly dissatisfied. Additionally, ten percent were considering trying to find a better job.

Finance Ministry report says taxing betting winnings not viable

The Ministry of Finance may decide to scrap plans to tax winnings from the betting business in light of the results of an analysis it commissioned to evaluate the viability of taxing as income prizes won by those betting on sports and other activities. The study found that the logistics of establishing such a system would be highly impractical. Although such winnings are taxed in other countries, for example the US, the ministry concluded that forcing the identification of people in a largely anonymous system would place an unfair burden of establishing the identities of players on ticket sellers in stores. Another proposal to require winnings to be declared on tax returns was also deemed impractical. Instead, the study recommends the continuation of the current system in which lottery companies themselves pay taxes on their profits.