Page 61 - CE Outlook Regions 2023

Under the exemption from the EU embargo on Russian oil imports, the
Slovak oil-processing refinery Slovnaft, which is owned by Hungary’s
MOL, has to curtail the export of produced fuel from Russian crude oil
and will have to replace the Russian imports over the next 18 months.

3.6.5 Construction

For January-October 2022, a decrease in turnover by 2.5% y/y was
recorded in construction. Prices of construction work increased by
19.1% y/y in November and in total for January-November 2022
construction work increased by almost 18%. Prices of construction
materials rose by 13% y/y, but showed a slight decrease m/m. The total
growth of prices for construction materials for January-November was
almost 24%.

A mid-year survey conducted by CEEC Research showed that 71% of
construction companies experienced complications resulting from
soaring prices while only 12% said they experienced no complications.
Only 7% of companies said it was aided by public investors when
dealing with the rise in construction materials.

More than 40% of companies said they experienced a situation when
an investor cancelled a contract due to an increase in prices for the
contracted works and this translates to cancelling of 18% of contracts
on average. More than half of the companies are exploring the usage of
alternative construction materials.

3.6.6 Major Sectors

The Slovak capital Bratislava saw tourism at 65% in January-October
2022 when compared to the pre-pandemic levels in 2019. Bratislava
Tourist Board does not expect the return of tourism in Slovakia to
pre-pandemic levels until 2024. BTB notes that tourism in Slovakia is
also weakened by the proximity of the war in Ukraine and Slovakia
being Ukraine’s neighbouring country.

J&T Finance Group (JTFG), the Czech-registered financial company
with majority owners consisting of Slovak billionaire Tkac family and
their local partner Ivan Jakabovic, is limiting its activities on the Russian
market following the February invasion of Ukraine by Russian military
and security forces.

JTFG’s Russian exposure should now be limited to J&T Bank Moscow
which represents less than 2% of JTFG’s assets, according to the
information provided by the company. In December Czech National
Bank also greenlighted JTFG’s J&T ARCH INVESTMENTS
participation in the Moneta Money Bank after it acquired shares from
Petrus Advisers in June.

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