Business News

In Business News this week: energy giant CEZ buys a 7% share in Hungary’s MOL and raises its profit estimate by 1.2 billion crowns; Czech Airlines agrees to sell its catering business; Skoda Auto wins Exporter of the Year award; Starbucks is coming to the Czech Republic in early 2008; and Czech beer output is set to finally cross the 20 million hectolitre mark.

Photo: archive of ČRo 7 - Radio Prague

Friday’s business pages were dominated by news of the Czech energy giant CEZ. The partly state-owned energy company has just bought a 7% share in the Hungarian gas and oil giant MOL. It’s thought that CEZ paid in the region of 28 billion CZK (1.4 billion USD) for its stake in the Hungarian company. The firms plan to embark upon a joint project to build gas-based power plants in Hungary and Slovakia. On the same day, CEZ raised its profit estimate by 1.2 billion crowns to 42.6 billion CZK (21 billion USD). The profit boost means larger dividends for shareholders, and nearly 15 billion CZK for the state, which plans to invest the money into highway construction.

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Photo: Archives de Radio Prague

Czech Airlines has agreed to sell its catering business to Alpha Overseas Holdings, a unit of Italy’s Autogrill, it was announced on Thursday. The cost of the deal has not been revealed. Czech Airlines has been selling non-core assets as part of a restructuring which it has undertaken to recover from losses generated over the past years. The deal is still to be approved by a general meeting, which will be held next month.

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Škoda Scout

Meanwhile, Czech car maker Skoda Auto won the country’s Exporter of the Year award this week, based upon the volume of its exports over the 1993 – 2006 period. Last year, the firm exported goods worth 164.2 billion CZK (8.2 billion USD) – that’s nearly 8% of the Czech Republic’s total exports in 2006. The firm’s sales in Western Europe grew by 5.4% to 120.4 billion crowns, and shot up in Eastern Europe by 46% to total 19.9 billion CZK. Second behind Skoda at the Exporter of the Year awards was Siemens Group Ceska Republika.

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The world’s largest coffee-shop chain Starbucks is set to open its first branch in the Czech Republic in early 2008, Friday’s Mlada Fronta Dnes reported. The first Starbucks in the country will be located in Prague’s Palladium shopping-centre, the paper reports. It had long been speculated that the city’s Arkada shopping-mall would house Starbuck’s first outlet in the Czech Republic, but a branch of the chain is only expected to open there in autumn of next year. Two other Prague malls have also voiced an interest in housing a Starbucks in the near future. The firm is planning to launch operations in the Czech Republic and Poland early next year.

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Onto beverages of another kind now - Czech beer output is expected to cross the 20 million hectolitre mark for the first time this year. On Friday, the chairman of the Czech Beer and Malt Association, Jan Vesely, made the prediction, but added that the growth in production would not be as big as in previous years, due to a slowdown in exports. According to Mr Vesely’s statistics, Czech breweries will export some 3.6 million hectolitres of beer this year, which is about 100,000 hectolitres more than last year. Last year’s growth, however, was about four times higher than this. Mr Vesely attributed the slowdown to the strengthening of the crown.