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6 I The Month That Was bne August 2020
Business
Eastern Europe
The Russian e-grocery segment is seeing ongoing rapid consolidation, with the ten largest players reaching 35% of the market, as compared to 28% at end-2019, according to Infoline. In 2019, the foodtech market added 67% year on year, reaching RUB45bn ($621mn), before tripling to RUB130bn in 2020. By 2023 the share of the top-10 operators will reach 75%, says Infoline.
Russian Mobile TeleSystems (MTS) received the first 5G licence in Russia for the 24.25-24.65 GHz band. The introduction of the 5G network has
been impeded by a lack of clear policy, decisions on framework frequency allocation, rollout strategy and the lack of co-operation both within and with the private sector.
Russian internet major Mail.ru Group (MRG) reported a 25.5% year-on-year increase in total revenues in 2Q20 to RUB25.3bn ($354mn), with net profit of RUB3.4bn.
Ukraine International Airlines (UIA) saw $60mn in losses due to a temporary suspension of its activities during the COVID-19 lockdown earlier this year and laid off 900 employees. Ukraine expects a reduction in air services by three times by the end of the year compared to last year.
Ukraine’s leading steel mill ArcelorMittal Kryvyi Rih will invest $700mn over the next three to four years on the implementation
of large investment projects with an environmental component.
Central Europe
Russia’s Gazprom has finally divested its stake in Latvian gas transmission system operator (TSO) Conexus Baltic Grid, as required under EU law, Latvia’s economy ministry said on July 21. The 34.1% stake has been sold to Latvia’s state-owned Augstsprieguma Tikls,
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bringing its total interest in Conexus to 68.5%.
Poland has launched its first e-car,
which will be named Izera after
a mountain range in southern Poland. It will be manufactured from 2023. There are two models, an SUV and
a hatchback.
Poland will present a plan to save the country’s – and Europe’s – largest coal mining company, which has
been struggling in 2020 due to the coronacrisis. Poland derives nearly 80% of its power from burning hard and lignite coal.
The production of passenger cars
in the Czech Republic in 1H20 fell
by 32.6% year-on-year to 503,615 vehicles. In June, Czech car output fell by 17% to 103,934 cars, according to the Association of the Automotive Industry (AAI), due to the fall in demand for new vehicles in the European Union.
Hungarian low-fare airline Wizz
Air incurred a €108mn loss in Q1 after a €72.4mn profit a year earlier as passenger traffic plunged 93.2% y/y to 70,200 in the April-June period.
Southeast Europe
Foreign tourist arrivals in Turkey plunged by 96% y/y to 215,000 in June after declining 99% y/y in the previous two months, according to the Tourism Ministry. Following the peak of Turkey’s coronacrisis Ankara has ramped up efforts to attract foreign holidaymakers to the country without success.
The number of foreign tourists in Slovenia fell to 89,000 arrivals in June, a fall of 83% y/y. Slovenia’s tourism will rely on local guests this year. The government has provided all Slovenians with €200 vouchers that can be spent in local hotels to boost domestic tourism.
Romanian oil and gas producer
OMV Petrom reported a net profit of RON214mn (€4w4mn) in Q2, down by 74% y/y as its sales shrank by a third, to under RON4bn. Fuel consumption will fall by 10% this year due to the coronacrisis.
Pizza firm DP Eurasia, which runs Domino’s Pizza brand in Turkey and Russia, said on July 21 that its overall sales in the first half were up 3% as its Turkish stores offset a decline in Russia. The London-listed company’s sales at its own and franchise stores rose to Turkish lira (TRY) 664.7mn ($96.97mn), marking growth of 13.6% in Turkey but a contraction of 14.6% in Russia.
Eurasia
Uzbekistan and Russia may launch
a joint low-cost airline for passenger and baggage transportation, according to the Ministry of Transport of Russia. A low-coster would benefit thousands of Uzbek migrant workers who normally seek employment in Russia due to a lack of opportunities in their home country.
Electronic commerce measured in terms of Kazakhstan’s retail turnover grew by over 1.5-fold in the first half of 2020. The coronacrisis has led to significant growth in online commerce. More than 2,000 online stores operate in Kazakhstan.
A French-Uzbek joint venture will begin growing industrial marijuana in Khorezm region for use in paper, ropes, building supplies and textiles. Uzbekistan’s climate is well suited to the plant which uses less water than the traditional cotton crop. President Shavkat Mirziyoyev signed a law in March allowing for the commercial cultivation of hemp containing up to 0.2% THC “for industrial purposes not related to the production or manufacture of narcotic drugs and psychotropic substances.”