Business news from Ukraine

PRICES IN ODESA HOTELS FALL TO HISTORIC LOW

The cost of staying in three- and four-star hotels in Odesa has decreased by half compared to the same period in 2019 and averages UAH 650 per day ($24), founder of Ribas Hotels Group Artur Lupashko has told Interfax-Ukraine.
“Today, the average price in three- and four-star hotels is UAH 650 per day ($24) in Odesa. This is an unprecedented low rate over the past 20 years. In the same period last year, such a room cost at least twice as much and was three times more expensive in 2013,” Lupashko said.
According to his estimates, the expected decline in gross income and net profit of hotels will be 20-40% in 2020 compared to the indicators in 2019.
“The positive dynamics can continue in cottage-type hotels and recreation centers, which have been in high demand since April and have increased in price in some cases up to 50%. Some of them have already been booked for the whole summer by guests who, as a rule, spent the summer in Cyprus, Spain, Italy,” he said.
However, hotels do not count on guests from other countries in 2020.
“The vast majority of Belarusian tourists were in the resort budget hotels. According to information available today, guests from Belarus will not be allowed to Ukraine this year. Most likely, these may be guests from Moldova and Turkey in the second half of the year. However, the share of such tourists will be minimal and will not have significant influence on the market,” the expert said.
Ribas Hotels Group collaborates (management and booking) with 25 hotel and restaurant complex facilities (beach and ski hotels, hostels and recreation centers), two of which are its own. The company’s portfolio includes Wall Street Hotel business hotel, Bortoli city mini-hotel (all are located in Odesa), Richard hotel complex (Hrybivka), Kyparys park hotel (Yuzhne), Seazone mini-hotel (Karolino-Buhaz), a chain of youth hostels Friday and others.
The total number of rooms of the chain was 1,234 rooms in various forms of cooperation at the beginning of 2020.
Ribas Hotels Group provides integrated management, exclusive booking, franchising and design services.
Ribas Hotels Group LLC was established in 2017. According to the unified register of legal entities, individual entrepreneurs, director and owner of a 100% stake in charter capital of the company is Lupashko.

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ELECTRICITY PRICES FOR INDUSTRY IN UKRAINE EXCEED TARIFFS IN EUROPE

The electricity prices for industrial consumers in Ukraine are two times higher than in Eastern Europe, according to the data of the Market Operator as of April 1, 2020.
According to the following websites https://www.oree.com.ua/ and https://www.nordpoolgroup.com/maps/#/nordic, in particular, the base cost of electricity for Ukrainian industrial consumers is EUR 51.01 per MWh, for Polish is EUR 30.23, for Romanian is EUR 25.69, for Hungarian is EUR 25.78, and for Slovak is EUR24.1.
The cost of electricity for daylight hours in Ukraine is EUR 58.85 per MWh, while in Poland it costs EUR 31.7, in Romania and Hungary is EUR 26.81, in Slovakia is EUR 24.35.
According to Nord Pool, the European power exchange, the tariffs are even lower in Western Europe. Thus, the cost of electricity in Benelux is EUR 22.5 per MWh, in France is EUR 21.86, in Germany is EUR 19.95.
The countries of the Scandinavian Peninsula, under support of national economies during coronavirus disease (COVID-19) outbreak, reduced electricity prices to minimum levels. Thus, the tariffs in Norway, Sweden and Denmark dropped to EUR 4.58 per MWh.
As Ukrainian industrial company Interpipe said earlier on Wednesday, April 1, in the last week of March in Ukraine rise in price of electricity for industrial consumers was recorded, while the tariff increased from UAH 1.3 per kWh to unprecedented UAH 1.68 per kWh, or 35% compared to February.
At the same time, Interpipe urged Prime Minister of Ukraine Denys Shmyhal and the National Energy and Utilities Regulatory Commission to take the necessary regulatory measures to stabilize the electricity market. The government needs to take measures to prevent the rise in electricity prices by one of the key market players – National Nuclear Generating Company Energoatom, the group said in a statement.

“Amid COVID-19 pandemic, the governments of Europe and the United States are developing plans to support industry, introduce additional tools to stabilize the business. The situation is opposite in Ukraine. We, as a business, solve the problems of transferring employees, providing them with protective equipment, and purchase equipment for local hospitals. All this is amid falling volumes of orders. In response, we get a 35% increase in electricity prices and, as a result, a significant deterioration in our competitiveness in the falling market,” Interpipe Chief Financial Officer Denys Morozov said.
Interpipe is one of the ten largest manufacturers of seamless pipes in the world, is the third largest producer of seamless-rolled railway wheels in the world.
Interpipe incorporates five key assets: PJSC Interpipe NTRP, Interpipe NMPP, Interpipe NIKO TUBE, Interpipe VTORMET, and Interpipe STEEL.

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PRICES OF LIVE PIGS IN UKRAINE GROW BY 25% IN 2020 – OPINION

Prices for live pigs in Ukraine since the start of the year have grown by 25% on average, to UAH 50 per kilogram, KSG Agro agricultural holding has said in a press release. According to him, in January, the cost of live pigs was UAH 40-42 per kg, in March – UAH 50-52.
The rise in price of live pigs at the first stage, according to KSG Agro Board Chairman Serhiy Kasianov, was associated with a seasonal increase in demand for pork.
“In the spring, the demand for pork meat traditionally increases in our country. Firstly, during this period a number of holidays are celebrated starting from March 8, and secondly, spring consumption growth is associated with improved weather: Ukrainians cook more meat in the fresh air,” he said.
Subsequently, prices were influenced by quarantine measures related to the spread of the coronavirus disease COVID-19 in Ukraine.
“Quarantine and sanitary restrictions have led to difficulties in delivering goods and, in particular, pork to different parts of the country. Add to this the rush demand for meat during the quarantine period. In conditions of self-isolation, our compatriots are actively forming food supplies by purchasing products for future consumption,” Kasianov said.
However, according to him, in the near future – before the beginning of summer – one should not expect a significant increase in prices for live pigs, since the further rise in price of pork is limited by the purchasing power of the population.

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PRICES FOR CONSTRUCTION WORKS IN UKRAINE 6.5% UP IN 11 MONTHS

Prices for construction and assembly work in Ukraine in January-November 2019 increased by 6.5% compared with January-November 2018, the State Statistics Service has reported.
According to statistics, since the beginning of the year prices have risen in all segments of construction. So, in residential construction the growth was 8.8%, in non-residential some 5.1%, in engineering some 5.7%.
In November 2019 from November 2018, the cost of construction work in residential construction rose by 3.8%, in engineering by 0.3%, while in non-residential construction the decrease was 1.6%.
In addition, the State Statistics Service said that in November compared with October, the cost of construction of residential buildings decreased slightly, by 0.5%, non-residential by 0.6%, while engineering structures increased by 0.4%.
According to its data, in 2018 prices for construction work in Ukraine increased by 23% compared to the previous year, while in 2017 by 13.4%.
The indicators are given without taking into account the annexed territory of Crimea and Sevastopol, as well as part of the occupied territories of Donetsk and Luhansk regions, the State Statistics Service notes.

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FUEL STATIONS AFTER MEETING WITH UKRAINIAN PRESIDENT CUTS FUEL PRICES

Fuel filling stations operated by Privat Group on December 24, after a meeting held on at the Office of the President of Ukraine on December 23, reduced the price of all fuel grades by UAH 1 per liter, Director of A-95 Consulting Group (Kyiv) Serhiy Kuyun has reported.
OKKO and WOG networks, in turn, reduced the prices by UAH 0.5/liter, AMIC network by UAH 0.7-0.8/liter.
“After yesterday’s meeting with the president, Privat reduced the price of all grades of fuel by UAH 1. Interestingly, is it for love or for convenience?) UPD OKKO, WOG reduced it by 50 kopecks, AMIC by 70-80 kopecks,” Kuyun wrote on Facebook page.
As reported, on December 23 President of Ukraine Volodymyr Zelensky held a meeting with representatives of companies participating in the fuel market, oil and gas production sectors and fuel filling station networks and discussed the issue of reducing fuel prices at Ukrainian fuel stations and withdrawing the market from “the shadow.”

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PRICES FOR CONSTRUCTION WORK IN UKRAINE 7.8% UP

Prices for construction and assembly work in Ukraine in January-September 2019 increased by 7.8% compared with January-September 2018. According to the State Statistics Service, the indicators are given without taking into account the annexed territory of Crimea and Sevastopol, as well as part of the occupied territories of Donetsk and Luhansk regions.
According to statistics, since the beginning of the year, prices have risen in all segments of construction. So, in residential construction the growth was 9.8%, in non-residential some 6.6%, and in engineering 7%.
In September 2019 from September 2018, the cost of construction work in residential construction rose by 6.4%, in non-residential by 1.9%, and in engineering by 3.1%.
In addition, the State Statistics Service said that in September compared with August, the cost of construction of residential buildings increased slightly by 0.3%, engineering structures by 3.1%, while non-residential decreased by 0.3%.
According to the report, in 2018 prices for construction work in Ukraine increased by 23% compared to the previous year, while in 2017 by 13.4%.

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