Business News

In Business News: Prague bourse sees trading drop in face of worries over new economic downturn; Czech Railways weighs the controversial purchase of 16 new trains at the cost of five billion crowns; leading commercial vehicle manufacturer DAF acquires a 19-percent stake in Tatra trucks; sources report that at least two firms have applied to launch exploratory operations in search of new shale gas reserves.

Trading on Prague bourse reflects widespread worries of new economic downturn

Worries over a new economic downturn saw drops in stock markets in Europe - including the Czech Republic - on Friday. Investors are nervous over debt levels in the euro area and over projected weak growth in the US. Trading on the Prague bourse dropped to its lowest two-year minimum. On Friday, for example, used car dealership company AAA Auto stocks dropped by 29 percent, before levelling up somewhat to ‘just’ 20. Komerční banka, Erste, ČEZ and Orco all suffered losses between 2 – 3 percent.

Domestic manufacturers strongly against Czech Railways deal

Photo: European Commission

Czech Railways, in which the state has a majority stake, is reportedly weighing the purchase of 16 new trains at the cost of five billion crowns. Austria originally bought the vehicles from Siemens, but is now trying to unload them at a higher price, some analysts have charged. Czech manufacturers, such as Škoda Transportation, are reportedly unhappy with the deal, saying they are capable of meeting the demand at a far lower price. They have already turned to the anti-monopoly office and filed a complaint with the European Commission over the apparent lack of transparency in the deal. Czech Railways has defended the offer by saying the vehicles were a ‘known quantity’ – having already been tested in the Czech Republic. The contract has not been signed yet.

DAF acquires almost 20 percent stake in Czech trucks producer Tatra

Global manufacturer DAF trucks has acquired a 19 percent stake as a partner in the famous Czech trucks producer Tatra; according to reports, the company, based in Holland, will provide Tatra with engines and cabins for its vehicles. Union head Jaroslav Nováčik welcomed the deal, saying it would help enormously to boost sales of the Czech truck maker. He indicated that the larger company’s business contacts, as well as dealership networks, could all have a positive impact. Tatra is one of the oldest motor vehicle manufacturers in the world.

CME announces profits of more than 800 K in 2Q

CME, the owner of commercial Czech broadcaster TV Nova, has posted profits of more than 800 thousand US dollars after suffering losses of 53 million last year. The marked improvement reflects optimistic forecasts by analysts. CME is active in six European countries including the Czech Republic. TV Nova, the strongest broadcaster on the domestic market, has announced an 11 percent growth in revenues, remaining CME’s most successful asset. Besides the Czech Republic, CME owns stations in Slovakia, Bulgaria, Romania, Slovenia, and Croatia.

Companies eager to launch exploratory operations for new sources of shale gas

The Czech Republic has reportedly seen new inquiries by energy companies regarding potential shale gas reserves, several news sites reported. The Czech Environment Ministry has confirmed that two companies seeking new sources of shale gas have filed formal applications for exploratory operations in the country, while others are said to be considering taking steps as well. Ministry representatives say the companies are Basgas Energia Czech – a subsidiary of the Australian exploration company Basgas – and Cuadrilla Resources of Britain. Also thought to be considering a shale exploration application is the domestic company Moravské Naftové doly. The companies reportedly want to learn whether the Czech Republic shares characteristics with Poland, believed to hold Europe's largest shale gas reserves.