Business News

In Business News this week: Czech business leaders, feeling the squeeze of the strong crown, call for a euro adoption target date – not this year, says the government; Prague Airport is shedding a 10th of its workforce ahead of its planned privatisation; the Czech Republic ranks among the worst states in an international study of how long it takes to deal with taxes; the number of debit and credit cards issued by Czech banks keeps increasing; and two Czech firms rank in the first five in a regional Top 500.

Strong crown causing problems for Czech companies

Finance Minister Bohuslav Sobotka

The strength of the Czech crown is forcing nearly 30 percent of companies to lay people off and even to consider moving some operations abroad, according to a survey of over 400 leading Czech firms released this week. Over half of the companies, which are in both the manufacturing and service sectors, said the strong crown had squeezed their profit margins by more than 5 percent. However, calls from business leaders for the process of adopting the common European currency to be sped up have not been heeded by the government: Finance Minister Miroslav Kalousek told Hospodářské noviny on Friday it was unlikely a target date for euro adoption would be set this year. If Poland meets its freshly announced intention of joining in 2011, all of the Czech Republic’s neighbours will be using the euro in less than two and a half years’ time.

Prague Airport letting 10 percent of workers go ahead of sell-off

Prague Airport is shedding 10 percent of its workforce as of December 1, as part of preparations for its privatisation, a company representative said on Thursday. Around 150 people will be let go, while another 90 posts which are currently unoccupied will be discontinued.

Dealing with tax drain on time of Czech firms

Czech businesses spend an average of over 900 hours doing their tax returns and fulfilling other tax duties, according to a new study by the World Bank. In fact, the Czech Republic ranked 168th out of 178 countries surveyed. Time spent is often linked to the number and frequency of tax payments firms have to make every year, though it isn’t always the case – the Czech Republic, with 12 payments a year, ranked 27th in this respect.

Number of cards issued by Czech banks keeps increasing

Photo: Štěpánka Budková

The number of payment (or debit) cards issued by banks in the Czech Republic was nearly 8.85 million at the end of June, representing a year-on-year rise of 7.2 percent. They are used three times as often for ATM withdrawals as actual payments. Credit cards are less popular, but showing faster growth – they jumped by over 20 percent to 1.26 million. Analysts say the trend is likely to turn in credit cards’ favour as banks persuade customers of their appeal.

Two Czech firms in first five in regional Top 500

Two Czech companies figure in the top five firms in the central and eastern European region, according to Deloitte’s latest CEE Top 500 table, Hospodářské noviny reported. The rankings are based on 2007 turnover. Car-maker Škoda Auto placed third, while power giant ČEZ was fifth. However, they are the only two Czech firms in the top 20, compared to four in last year’s study. Outside the upper echelon, some Czech companies are still the biggest in their fields in the region: CSOB is the biggest bank, while Skanska is number one in construction.

Škoda planning budget vehicles for Indian market

Getting back to Škoda Auto, the Mladá Boleslav based firm is planning to launch a low-priced model for the Indian market. A spokesperson said Škoda’s Fabia has done better than expected in India, but the company still felt it could do well with a cheaper car. In fact, the concern plans to bring out a total of four new budget models in India in the next few years.