News Parkiet

Equity markets

New debutants' earnings below average

Over half of the 19 new firms that sold their stock to the public in recent IPOs reported second quarter earnings that were lower than last year. Aggregate sales grew by 27.8 percent, almost twice as much as broad market average. Stockbrokers say disappointing earnings could hurt weaker IPO candidates in the future.

Real estate

Poland could waive VAT on real estate deals

Polish Ministry of Infrastructure has asked the Finance Ministry to reconsider 22 percent VAT tax on commissions charged by real estate agents, citing expanding gray market and the loss of tax revenue. Polish authorities begun collecting new VAT tax starting May 1st, provoking a mass exodus of real estate buyers into unregulated gray market. Up to half of all real estate deals in recent weeks were drafted to avoid the new tax, Polish Real Estate Market Association says.

Sports equipment

Kross IPO delayed until 2005

Kross SA, Poland's biggest bicycle manufacturer, has postponed planned Initial Public Offering until sometime next year because of delays in the conversion from limited liability into a joint-stock company, sources at the company told PARKIET recently. Based in Przasnysz near Warsaw, Kross said earlier it would seek up to 50 million zloty on the Warsaw Stock Exchange. Its founder Zbigniew Sosnowski offered to dilute his interest by 25 and 30 percent.

Proceeds from the IPO will be used to increase sales in Western Europe. Kross CFO Zbigniew Szabłowski says it could open a new production plant in the former Soviet Union, most likely in Russia.

For this year Kross expects 26 percent increase in sales to approximately 180 million zloty. The number of bicycles sold will rise to 800.000, Kross says.

Civil engineering

Budimex Dromex to merge with another

subsidiary

Poland's biggest road-building firm, Budimex-Dromex is working on a merger with a wholly-owned subsidiary called Dromex-Cieszyn, chief executive Stefan Bekir Assanowicz told PARKIET this week.

The merger will add up to 30 million zloty to Budimex-Dromex' annual revenue of PLN 1.5 billion ($405 million)..

Budimex-Dromex, which is controlled by Spain's Ferrovial group, has no plans to buy Katowice-based PRInż, southern Poland's biggest road construction company. 'We already have a strong position in Southern Poland and in Silesia', Assanowicz said.

Food industry

Sale of Zabrze brewery postponed

Planned sale of Browar Zabrze, a regional brewery from Upper Silesia, was postponed yet again because of procedural reasons, bankruptcy trustee said. The brewery overspent on new equipment and went bust six years ago. Zabrze has since recovered and is now profitable. Court-appointed trustee managing Zabrze's assets had to lower the price to PLN 15 million after eleven unsuccessful attempts to sell the company.

Browar Zabrze's last year's earnings totaled PLN 2.3 million.

EU accession

Public companies fight for EU subsidies

At least a dozen Polish companies have applied for financing from European Union's structural funds to pay for upgrades and other projects. Only a few, including several recent debutants, decided to publicize their bids for EU subsidies. One of the biggest subsidy-seekers, Elstar Oils, maker of Canola oil, asked for PLN 8.8 million to build a new rapeseed oil-based gasoline additives' production line. ATM Grupa, a TV producer whose shares started trading on the WSE at the turn of this year, applied for several million zloty to pay for a new TV studio.

EU investment subsidies range from 25 to 50 percent of each project.

Media

FON announces stock offering

FON SA radio group announced yesterday it plans to offer more than 40 million new shares through a secondary stock offering to the public. The company, which owns interests in five smallFON chief executive Bartłomiej Gajecki told PAP wire service his company is seeking 40.5 million zloty ($11 million) to add up to ten new broadcasters to its portfolio.