Business News

In Business News this week: CNB reports zero foreign currency intervention in March; Tax Freedom Day to come on June 2; twelve construction companies fined for cartel activity; betting company Fortuna sees operating profit slump on higher Czech taxes; companies named after their owners benefit from greater trust, says study.

CNB reports zero foreign currency intervention in March

Photo: Štěpánka Budková

The Czech National Bank reported Friday that it did not intervene in the foreign currency markets in March to maintain its low crown policy. In February the central bank intervened to the tune of 623 million euros and in January by just over 2.15 billion euros to keep the crown near or lower than 27 crowns to the euro. Since the start of the low crown policy at the end of 2013 it has spent around 19 billion euros on maintaining the target exchange rate. The bank says it will maintain the low crown policy until at least the middle of next year when it hopes inflation will approach its annual target rate of 2.0 percent.

This year’s Tax Freedom Day to come on June 2

This year’s Tax Freedom Day in the Czech Republic falls on June 2nd, according to the Prague-based Liberal Institute, referring to estimates by the OECD. Tax Freedom Day is the day in the year when the average Czech has earned enough to pay his annual tax bill. This means that people’s entire earnings in the first 153 days of the year will be paid to the authorities, which is the lowest figure since 2000, while anything earned after that is theirs alone. This year, the Tax Freedom Day comes three days earlier than last year, and four days later than the OECD average.

Twelve construction companies fined for cartel activity

Illustrative photo: Kristýna Maková

The Czech competition office has announced a fine of 278 million crowns on a group of 12 construction companies. The ČTK agency said that the largest fine, amounting to tens of millions of crowns, had been imposed on the Hochtief company. The Polish-based building company, Swietelsky, had cooperated with the competition watchdog in a bid to reduce its fine, the agency added. The cartel allegedly covered building contracts in South Bohemia and the Vysočina. The companies can still appeal the fines and findings of the authority.

Betting company Fortuna sees operating profit slump on higher Czech taxes

Betting company Fortuna said it business boomed in the first quarter of the year with the value of bets placed rising by around 26 percent to total around 250 million euros. But operating profit plummeted by around 37 percent to 4.6 million euros. Fortuna, majority owned by the Penta group, said one of the main factors was a steeper betting tax in the Czech Republic. The group operates in the Czech, Slovak, Polish, and Hungarian markets.

Study: Companies named after their owners benefit from greater trust

Illustrative photo: Kristýna Maková

Companies in the Czech Republic named after their owners more easily nurture customer trust, which translates into increased profit, a study by the analytical firm Bisnode suggests. The study examined limited private companies with majority owners and other firms. It suggests that profitability among companies named after the owner was 0.5 percent higher than those with neutral names. Eleven percent of company founders 60 or older name their firm after themselves; while those under the age of 30 who do so are just five percent. Consumers seemed more likely to trust a company where the CEO was unafraid to put his or her name up front, standing fully behind their product, the analysis suggests.