In this week’s Business News: the ad spending slide hits Nova profits; one sole order for Staropramen; bad loans provisions hit Česká Spořitelna; ČEZ powers up in Germany; and Czechs lose taste for pork products.
Commercial broadcaster sees turnover and profits plummet
The Czech Republic’s biggest commercial television company – Nova – has given a clear picture of the impact of shrunken ad spending on profits. The tv company’s turnover plunged by 41 million dollars to just over 70 million dollars in the second quarter. Profits halved to 31.9 million dollars from the 60.8 million pulled in during the same period a year earlier. Commercial broadcasters are estimated to have slashed ad rates by up to 50 percent but spending across all media is still expected to be down by around a third this year.
Investment group lodges sole bid for Staropramen
The sale of Czech brewer Staropramen has attracted only one bidder according to media reports. London-based investment group CVC Capital Partners is said to be the only contender which lodged a bid for the Czech Republic’s second biggest brewer together with peers in six other countries in Central and Eastern Europe. But there is speculation that the bid might not be big enough to prevent Staropramen’s owner – Belgian-based multinational InBev – calling a halt to the sale. InBev launched the sale to cut its debts after buying US brewer Anheuser-Busch.
Bad loans fears cut Česká Spořitelna profits
The Czech Republic’s biggest bank, based on client numbers, has reported a 4.4 percent fall in profits during the first half of the year compared with the first six months of 2008. Česká Spořitelna reported net profit of 6.31 billion crowns or around 247 million euros. Profits were mainly hit because the bank has been forced to put aside more money to cover the risks that existing loans will go sour. This is partly due to the economic downturn. The bank said provisions for bad loans more than tripled to 150 billion euros.
ČEZ takes control of German power plant project
The seeming unstoppable power and money making machine that is electricity giant ČEZ is continuing its foreign expansion. This week the state-controlled colossus announced that it has bought the full rights to a project to build a power 600 MW capacity plant but bought out the remainder owned by Czech-Slovak investment group J&T. The companies teamed up this year to acquire German coal company MIBRAG which drew up the project for a new power plant to use its brown coal.
Pork bears brunt of meat production slide
Czechs’ taste for meat – and pork in particular – has taken a slide
according to figures from the national statistics office. Meat production
as a whole was down 7.1 percent in the second quarter of the year compared
with the same period in 2008. Pork was the worst casualty with production
falling 8.8 percent compared with decreases of 5.7 for beef and 5.2 percent
for poultry. Pork still however counts for just over half of Czech meat
sales. There are reports that foreign tourists are steering clear of pork
dishes because of swine flu fears but the statistics office does not draw
any conclusions on this count.