Bulgarian govt skimps on emission allowances for several industries A number of Bulgarian enterprises will likely be forced over the near-term to scale down their production activities or slow their pace of expansion because the greenhouse gas emission allowances they will be granted will not be sufficient to ensure full-throttle operation. Under the draft scheme for the allocation of greenhouse gas emission allowances for 2008-2012, installations in non-ferrous metallurgy, ceramics and chemicals will not get the amount of allowances they have requested. Some local companies fear the ministries of environment and energy, which drafted the scheme, went overboard in favour of the power industry where the state controls significant assets. According to the private businesses, this is probably why the allowance requests of the power industry will be fully granted while the producers of ceramic materials will get 83 per cent of the requested allowances, non-ferrous metallurgy companies will get 88 per cent and the producers of glass and heavy metallurgy companies will get 90-91 per cent. The allocation of allowances for 2007 has not yet been notified to local businesses. The government has sent the scheme for approval to Brussels. In 2007, companies that have overshot their allowance or have failed to buy the necessary amount of emission credits will be fined EUR 40 per ton of excess carbon dioxide emissions or their equivalent. The fine will increase to EUR 100 per ton in 2008. Currently on the free market the quotas are traded at a price of about EUR 10 per ton, but all forecasts point that the price will increase from now on. Sectors like non-ferrous metallurgy has an increase of its production with a double digit numbers on an annual base and these companies will be obstacled, said Polimiti Paunova. She pointed that in 2007 there are 15% less quotas for the sector and most of them are already allocated for newer environment protecting technologies. Another thing is that when the allocation of the quotas has been considered the major factor has been the GDP, not the increase by sectors. In the meantime individual quotas for companies are calculated according to their output volumes between 2002 – 2004. Paunova said that since than those companies have increased their productivity a lot. For example in 2002 Bourgas-based Promet Steel had just 5% load of its equipment and until 2004 the company increased its output 5 times.Now the company wants to work at full capacity.
Source: Dnevnik (04.01.2007)

Bulgarian steel mill Kremikovtzi seeks power self-sufficiency Kremikovtzi, Bulgaria's biggest steel maker, intends to increase the capacity of its on-site power station and spin it off into a subsidiary company. GE Energy has been invited to send a team to inspect the mill's power production facilities, said Pravin Banker from Balkan Capital Management, the company hired to package the project financially. The aim of the steel maker is to upgrade the thermal power plant to a high-efficiency go-generation facility that meets company needs and sell excess energy output to national power grid operator NEK, said Banker. The 112MW power station currently produces 40MW of power which is insufficient for the needs of the mill. The shortfall is covered by electricity bought from NEK with annual bills hitting BGN 40 mln. The capacity of the power station could be raised to 220MW over the next couple of years, said Banker. NEK is required by law to purchase power produced by cogeneration facilities at preferential prices through 2012.
Source: Dnevnik (26.01.2007)

Biovet, one of the most liquid companies on the Bulgarian Stock Exchange (BSE), posted BGN 122 million net sales revenue in 2006, which represents a twofold increase compared to 2005. Revenue from customers also doubled to BGN 138.89 million. The costs of the company increased by BGN 60 million to BGN 124.66 million. Interest payments rose to BGN 4.3 million. Biovet's stock depreciated by 3% to BGN 18.55 per share during Tuesday's session on BSE.
Source: Pari (31.01.2007)

The end-'06 revenues of local drug maker Biovet more than doubled y/y to BGN 124.8 mln but net profit plummeted 90 per cent to BGN 127,000 on higher operating costs. Sales increased to BGN 74.47 mln from BGN 55.9 mln at end-'05. Non-current liabilities stood at BGN 42.249 mln, including BGN 2 mln in debts to connected enterprises and BGN 38.092 mln in loan dues.
Source: Dnevnik (31.01.2007)

Two foreign investment banks have spoken with the Bulgarian stock exchange (BSE) in connection with plans to offer financial instruments based on the local blue chip index, SOFIX. The Bulgarian bourse withheld the names of the banks at their request. The BSE said the banks in question intend to style their products after the SOFIX-based open-end certificate launched recently by ABN AMRO. The market fortunes of 8 Bulgarian stocks - Sopharma, DZI, Bulgartabac, Albena, Orgachim, Neochim, CCBank and Biovet, are tracked by an Erste Bank certificate. The BSE specified the 2 banks mulling SOFIX derivatives are not among the 27 non-native investment outfits that have notified the Bulgarian financial regulator of plans to enter the local market. Dnevnik found that the notifications from some of the interested companies, including Morgan Stanley, Panmure Gordon&Co. and Numis Securities Ltd., were filed as a matter of routine and they do not intend to start marketing their products immediately.
Source: Dnevnik (14.02.2007)

The shareholders of Biovet will vote on April 27 for authorizing the Managing Board of the company for guarantee of a promissory note, issued by Huvepharma JSC in favour of Citibank.
Source: Monitor (11.03.2007)

An Apr 27 general meeting of the shareholders of Biovet, the local pharmaceuticals company, will vote on a proposal to avalise a EUR 4 mln promissory note issued by the drug maker's majority owner Huvepharma. The beneficiary note, issued as a loan collateral, is the Citibank branch in Sofia. This is the second promissory note issued by Huvepharma that will be avalised by Biovet. In '06, the shareholders of the pharmaceuticals company approved the provision of an aval for an 8 mln euro Citibank revolving credit.
Source: Dnevnik (12.03.2007)

The electricity price hike from July is no surprise to anybody, now that units 3 and 4 of the Kozloduy nuclear power plant have been shut down and coal has become more expensive. In addition, the National Electric Company has terminated power exports, which have until now allowed it to compensate the higher prices paid to water power plants and to maintain lower sales rates for the electricity distribution companies. The State Energy and Water Regulation Commission is under pressure from electricity producers to raise their tariffs. A lot depends on the regulator's final decision, as higher electricity bills mean more expensive goods and services. That will affect the competitiveness of the Bulgarian industry and may cost businesses their EU markets. The prices of electricity for the industry in Bulgaria are higher than for households. This is not the way to encourage industrial development, the supervisory board chairman of Biovet of Peshtera, Kiril Domuschiev, said.
Source: Pari (13.03.2007)

Biovet JSC Biovet was established in 1961 as an animal health antibiotics manufacturing plant. The company was restructured into Biovet EAD in 1991. A total of 25% of the capital of the company was privatised in 1996. Two years later the Privatisation Agency organised a procedure for the sale of the majority stake in the company. A total of 54% in Biovet was acquired by the Bulgarian Pharmaceutical Company, currently known as Huvepharma. The buyer paid USD 10.6 million for the stake and committed to make investments for further USD 10 million over the next five years. The Bulgarian Pharmaceutical Company subsequently acquired a substantial part of the remaining shares and raised Biovet's capital. Line of business Biovet specialises in the production and sales of over 150 nutritional feed additives, enzymes, bulk active substances and pharmaceuticals for farm animal productivity and animal health. The company also produces over 50 substances and ready-to-use medicines. The products are certified under the GMP and ISO 9001:2000 standards for quality. Biovet's exports to over 70 countries account for 95% of the sales of the company. Investments Over the years Biovet has become one of the most modern Bulgarian companies with a comprehensive investment programme and considerable revenue growth. Biovet's co-generation power plant, opened in the spring of 2006, is among the largest investment projects of the company. Plans Biovet won an order from Dutch agency Senter for the sales of 3.5 million emission reduction units. The deal is estimated at EUR 1.8 million. A co-generation power plant is also expected to be built at the Razrad facility of the company, which was acquired for nearly BGN 40 million from Actavis in 2005. Biovet signed in 2005 a EUR 22.5 million contract with Dutch Intervet for the purchase of non-tangible assets. Part of the assets were subsequently sold for BGN 39.8 million. The transaction will not affect Biovet's sales and is even expected to improve its capital structure. SWOT Strengths * Strong positions on international markets * Well developed distribution channels * Diversified product portfolio * Up-to-date production equipment * Traditions in the sector * Highly qualified staff * Recognised name * Sustained revenue growth * Consistent investment programme * Conducting own research and development activities * Energy independent Weaknesses * Biovet's commitment to majority owner Huvepharma and its connected companies is unclear and is not economically beneficial, which affects the profitability of the company. * Strongly dependent on international markets due to the weak domestic consumption Opportunities * Increasing domestic consumption * Expanding international market presence * Full utilisation of the output capacity * A listing of Huvepharma on an international stock exchange would result in more transparent management practices Threats * Intensifying competition from Asian companies
Source: Pari (26.03.2007)

Biovet-Peshtera posted BGN 46,000 net profit for the first quarter of 2007, up 50% year on year, the non-consolidated report of the company shows. Biovet's operating revenue rose to BGN 24.914 million in the first quarter of 2007, compared to BGN 21.435 million generated a year earlier. Sales revenue totalled BGN 23.305 million. The business costs of the company rose by nearly BGN 4.5 million to BGN 24.457 million. The stock of the company depreciated by 2.45% to BGN 17.53 per share during Wednesday's session of the Bulgarian Stock Exchange.
Source: Monitor (03.05.2007)

Bulgaria's Biovet posted a BGN 29,000 net profit for the first quarter of 2007, compared with a BGN 8,000 loss for the year-ago period, the company's consolidated report shows. The improved performance is mainly due to the rise in net product sales, which jumped by more than BGN 3 million, year on year, to BGN 23.305 million. The net sales revenue increased to nearly BGN 25 million, up from BGN 21.655 million for the first quarter of 2006. Business expenses rose to BGN 24.648 million, compared with BGN 20.222 million for the corresponding period in 2006. Material expenses went up from BGN 13.101 million to BGN 19.629 million. Majority shareholder in Biovet with 75% of the capital is Huvepharma. We will consider going public after 2008, Huvepharma's executive director, Kiril Domuschiev, said recently. However, the Bulgarian market is too small for us, so we will probably get listed on a foreign stock exchange, he added.
Source: Pari (29.05.2007)

Only five of the 16 companies included in the calculation of the Sofix blue-chip index of the Bulgarian Stock Exchange (BSE) will pay dividends in 2007. The Bulgarian American Credit Bank (BACB), the Bulgarian Telecommunications Company (BTC), M+S Hydraulic, Petrol and Sopharma have decided to distribute dividend. The shareholders of BTC will decide next week how much of the company's BGN 283 million profit for 2006 will be distributed as dividend. Sopharma's board of directors decided to distribute BGN 13.2 million of the company's BGN 22.034 million profit for 2006 as dividend. Sopharma's capital is distributed in 132 million shares, which means that the gross dividend per share will stand at BGN 0.1. The general shareholders' meeting is scheduled for June 26. The shareholders of M+S Hydraulic have already decided to allocate 1.12 million or 34% of the company's profit for 2006 for dividend distribution. The shareholders will be paid BGN 0.08 dividend per share. Dividend will be paid between August 17 and November 16 through the Central Depositary and International Asset Bank. BACB will pay BGN 0.75 gross dividend per share to its shareholders. A total BGN 9,468,543 of BACB's BGN 33.686 million profit for 2006 will be distributed as dividend. Payments started on may 31. Petrol's general shareholders' meeting was held on Monday. The shareholders had to decide whether 50% of the BGN 16.853 million profit should be allocated for dividend distribution. The company did not disclose information on the decisions taken at the meeting. The remaining eleven companies within the Sofix will reinvest their 2006 profit, a survey of the Pari daily shows.
Source: Pari (12.06.2007)

Biovet JSC - Peshtera, Bourse code BIOV, the annual general meeting of which was held on June 15, 2007, will not distribute dividends for the year 2006. Biovet JSC - Peshtera reported a profit for 2006 in the amount of BGN 500,032.5. The company shall allocate BGN 50,003.25 in the Reserves Fund and BGN 450,029.25 as Additional Reserves.
Source: Capital market (20.06.2007)

Local pharmaceuticals company Biovet said it has signed a 10.6 credit agreement with the United Bulgarian Bank. The resource is provided under a settlement account overdraft facility secured with machinery and equipment and a mortgage on company properties in Razgrad. Biovet said it has repaid in full the revolving and investment credits borrowed from Bulbank.
Source: Dnevnik (03.07.2007)

Bulgarian engineering company Risk Engineering said it will invest in a large-scale EUR 500 mln project for the construction of hothouses and co-generation facilities that will provide the necessary heating energy. The seven-year project will be deployed on 56 ha of land in Parvomai, Rakovski, Krumovo, Mezdra and other cities. DG Parvomai, 51 per cent-owned by Risk Engineering with Dutch Green House holding a 35 per cent stake, has already made some land purchases for the purposes of the project. The hothouse output will be marketed abroad after it is certified by the agrarian institute in Amsterdam, said Risk Engineering manager and owner Bogomil Manchev. The company executive said the project will apply for a First Class Investor certificate from InvestBulgaria Agency, the local investment promotion authority. Longer-term plans include the construction or acquisition of a cannery, said Manchev. The project financing will be provided by Corporate Bank and ING Bank. During the initial stage of the project, EUR 42 mln will be invested in a co-generation module with a 15-20MWh capacity in Parvomai where the area of the planned hothouses is 12 ha. Work on the Parvomai power facility should get underway this fall.
Source: Dnevnik (17.07.2007)

Animal health products maker Biovet posted BGN 52.163 million net sales for the first half of 2007, an increase of BGN 12 million, compared to the year-ago period. The strong result may be put down mainly to the increase in product sales, which rose from BGN 37.074 million to 49.194 million. The net profit of the Peshtera-based company, decreased from BGN 53,000 in the first half of 2006 to BGN 25,000 a year later. Business costs stood at BGN 51.346 million as at June 30, 2007, up by BGN 13 million year on year. Biovet's stock depreciated by 0.89% on Thursday to an average of BGN 16.77 per share. A total of 1,339 shares in the company changed hands on the day. Huvepharma is a majority shareholder in Biovet with a 75-percent stake.
Source: Pari (24.08.2007)

The BG40 index of the most traded stocks on the Bulgarian Stock Exchange (BSE) closed at 420.76 points on Friday adding 10.88% to its value in August. Orgachim and Odessos Shiprepair Yard were the major driving force behind the strong performance of the index in August. Trade in Orgachim's stock resumed after a suspension which had continued for month and a half. The price of the stock appreciated steeply propelling the index to new all-time highs. Odessos' stock, which appreciated from BGN 297.06 to BGN 319.66 per share over the last month, affected strongly BG40's performance towards the end of August. Pari daily's Bullish Bearish Sentiment (BBS) index shows bullish approach towards the performance of the BG40 in September. A total of 72% of the brokers from the leading investment intermediaries predict an upward movement. Some 28% of the respondents predict that the index will lose part of its value during the month.
Source: Pari (03.09.2007)

Kaolin, Sparky Eltos and Euro Ins are the three new companies included in the blue-chip index of the Bulgarian Stock Exchange (BSE), Sofix. The changes were approved by BSE's management on Wednesday, September 5. Biovet and DZI insurance company were excluded from the blue-chip team. The Bulgarian Telecommunications Company (BTC) remains part of Sofix for the time being, though its new majority owner has announced plans to delist the company from the public register. After the changes, the number of companies in the index is now 17. These include Albena, BTC, Elana Agricultural Land Opportunity Fund, Industrial Holding Bulgaria, M+S Hydraulic, Monbat, Neochim, Orgachim, Petrol, Sopharma, Bulgarian-American Credit Bank, Central Cooperative Bank, Toplivo, Chimimport and the three new companies. On Wednesday, which was the last business day last week, Sparky Eltos closed at BGN 18.01 per share, up by 0.45%. Euro Ins rose by 0.46%, reaching BGN 17.37. But Kaolin's shares cheapened by 6.30%, closing the week at BGN 15.16.
Source: Pari (10.09.2007)

Bulgarian drug maker Biovet will seek shareholder approval on Dec 27 to sell its gas-fired co-generation capacity to Turbo Energy, an outfit connected to Biovet's majority owner Huvepharma. The sale price is 26 mln levs or just over 2% of Biovet's total assets. Turbo Energy is owned by Advance Properties, a company owned by Huvepharma owners Kiril and Georgi Domuschiev.Bulgarian drug maker Biovet will seek shareholder approval on Dec 27 to sell its gas-fired co-generation capacity to Turbo Energy, an outfit connected to Biovet's majority owner Huvepharma. The sale price is 26 mln levs or just over 2% of Biovet's total assets. Turbo Energy is owned by Advance Properties, a company owned by Huvepharma owners Kiril and Georgi Domuschiev.
Source: Dnevnik (12.11.2007)

The Bulgarian Telecommunications Company (BTC) will be excluded from the BG40 and BGTR30 indexes, the board of directors of the Bulgarian Stock Exchange (BSE) decided. Chimco will also be removed from the broader BG40 index of the most traded stocks. The companies will be replaced by First Investment Bank (FIBank) and Kaolin. The BGTR30 index of the 30 best performers in total return will be completed with Fazerles of Silistra. BTC will be excluded from the indexes due to its pending delisting from the BSE, while Chimco has been banned from trade for several months as a punishment. The changes in BG40 enter into force on November 23, BGTR30's revision becomes effective on December 3.
Source: Pari (16.11.2007)

The indexes of the Bulgarian Stock Exchange (BSE) continued their poor performance on Tuesday. The Sofix blue-chip index lost 1.1% of its value closing at 1,709.99 points. The BG40 index of the most traded stocks slipped by 0.73% to 516.59 points. The BGREIT index of real estate investment trusts remained unchanged at 101.5 points. The BGTR30 index of best performers in total return dipped by 0.42% to 1,086.75 points. A total of 535,103 shares in fuel distributor Petrol changed hands on Tuesday at an average price of BGN 4.3 per share. The stock price of the company remained unchanged. The Bulgarian Telecommunications Company (BTC) stock appreciated by 10.53% to BGN 12.49 per share. Druzhba, Lomsko Pivo and Biovet also ended Tuesday's session with gains. Bulgarian Investment Group's stock price slumped by 29.6% to an average of BGN 0.88 per share. Chimco lost 14.28% of its value closing at BGN 0.12 per share. A total of 150,348 shares in the company changed hands on the day. Lavena and Orgachim also closed down on Tuesday.
Source: Pari (12.12.2007)