Tag Archives: Georgia

Georgia Healthcare Group posts strong Q1 results

MAY 17 2016 (The Conway Bulletin) — Georgia’s largest healthcare company, Georgia Healthcare Group (GHG), posted a 33% rise in revenue in the first quarter of 2016, highlighting rising demand from Georgians for private medical services.

Revenues increased to 71.7m lari (around $33m) in the first quarter of 2016, a jump of a third from 2015. The company attributed the positive results to its ability to grab market share in the healthcare sector.

And this is set to grow, according to GHG, which bought Georgian pharmaceutical retailer and wholesaler GPC earlier in May.

“We are clearly on track to deliver our target of more than doubling 2015 healthcare services revenues by 2018,” CEO Nikoloz Gamkrelidze said in a statement.

GHG also positively reviewed the recent tax reforms that the Georgian government put in place for next year. Under the new rules, undistributed profits will no longer be subject to a 15% profit tax. The government has said that the new tax rules are designed to encourage companies to invest, giving the economy a boost. In the short-term, though, the new tax code will reduce government income.

“We expect this amendment to take effect for our healthcare services earnings on 1 January 2017, and this is expected to significantly reduce the Group’s effective tax rate from 2017 onwards,” Mr Gamkrelidze said.

The healthcare sector in Georgia has proven resilient during the current economic downturn. This economic slowdown, which has hit the entire Central Asia and South Caucasus region, forced Georgia’s lari currency to fall by 30% in the past 18 months and has slowed GDP growth.

Last November, GHG listed its shares on the London Stock Exchange.

BGEO Group, a London-based holding company that owns Bank of Georgia, owns a 65.07% stake in GHG.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Georgia’s trade shifts west

MAY 19 2016 (The Conway Bulletin) – Georgia’s trade flows are increasingly shifting westwards, data from the Statistics Committee showed. Trade turnover with EU countries grew by 11% in Jan.-April 2016 compared to the same period in 2015. Georgia’s trade with CIS countries, on the contrary, fell by 15%. Importantly, overall exports decreased, while imports grew.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Revenues fall at VimpelCom’s regional subsidiaries

ALMATY, MAY 12 2016, (The Conway Bulletin) – Revenues at Russian mobile operator VimpelCom’s Central Asia and the South Caucasus operations were sharply down in the first quarter of 2016 compared to the same period in 2015, a sign of the continuing economic malaise that has undermined consumer confidence in the region.

In Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, VimpelCom operates under the Beeline brand. Its customer base in the region shrank by 6% to just above 24m, roughly in line with figures released last month by its rival TeliaSonera.

In Kazakhstan, VimpelCom said that revenue from its mobile operations was just under 24b tenge in Q1, 10% lower than 2015, and that its subscriber base had fallen 4% to 9.2m.

The Kazakh mobile market has become increasingly competitive. Sweden’s Tele2 merged with Kazakhstan’s Altel earlier this year and has been undercutting its bigger rivals.

In its quarterly report, VimpelCom said that prices would stay low.

“Competition remains intense, however, although the company continues to maintain its commercially rational pricing strategy,” it said. “Beeline expects the competitive environment to remain challenging throughout 2016.”

And, other than in Uzbekistan were a new pricing strategy had sustained revenues, it was a similar story in other subsidiaries. In Georgia revenues were down 30% in US dollar terms and in Tajikistan down 27%.

VimpelCom said of the drop in revenue in Tajikistan that this was “mainly due to lower incoming international traffic as a result of fewer migrants living abroad due to the macro-economic slowdown in the region and a weakening local currency.”

A recession in Russia has heavily reduced job opportunities for migrant workers from Tajikistan, hitting remittances and economies in Central Asia.

Earlier this year, VimpelCom paid a fine of $795m after it admitted paying bribes in 2007/8 to access the Uzbek mobile market.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Editorial: Corruption in Georgia

MAY 13 2016 (The Conway Bulletin) – Georgian PM Giorgi Kvirikashvili said at an anti-corruption conference in London last week that he would “explore” the possibility of setting up a database in Georgia that would mean all companies will need to reveal their secret beneficiary owners.

If Mr Kvirikashvili is serious then now is the time for his to move and fast. He has a real opportunity to chisel a niche for Georgia and to set the pace as a global leader in the fight against corruption.

It’s a theme that is very in-vogue at the moment and also one that should play nicely to audiences in the West that Georgia is trying to impress. These are mainly NATO members and European Union member states. Georgia wants to join both clubs and if Mr Kvirikashvili can fund, organise and manage a meaningful database that improves transparency in business, he should impress his potential suitors.

Mr Kvirikashvili needs to be brave and move from exploring options on setting up a database outlining companies’ real beneficiaries to actually doing it.

ENDS

(Editorial from Issue No. 280, published on May 13 2016)

MP quits Georgian Dream

MAY 10 2016 (The Conway Bulletin) – Armazi Akhvlediani, who had been a rising star of the ruling Georgian Dream coalition, quit the party and accused it of selling out its supporters. Mr Akhvlediani’s resignation will shake the Georgian Dream coalition just five months before an election which is expected to be a hard-fought affair against several opposition parties.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Georgian wine exports grow

MAY 11 2016 (The Conway Bulletin) – Georgia exported 11.6m bottles of wine in 2015, an increase of 45% from 2014, its national wine agency said. Total revenues earned from wines increased by 15% to $26.9m. Wine is an important export for Georgia. It has been heavily marketing its wine and its status as one of the original wine-making countries. Russia, Ukraine and Kazakhstan are the biggest markets for Georgian wine.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Georgian PM attends anti-corruption summit

MAY 12 2016 (The Conway Bulletin) – At an anti-corruption summit organised in London by British PM David Cameron, Georgian PM Giorgi Kvirikashvili said his government will consider creating a public register of company information that includes data on beneficial owners. He also said that the government will set up partnerships with other countries to improve cooperation between different intelligence agencies.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Russia complains about Georgian military exercises

MAY 12 2016 (The Conway Bulletin) – Russia complained about a military exercise in Georgia involving US and British forces, saying that it was a destabilising influence.

The exercise is the biggest joint NATO-Georgia exercise ever run in Georgia and, for the first time involves heavy US tanks. Georgia has made clear its desire to join NATO and views these exercises as important milestones. Reuters reported that 650 US soldiers were involved in the exercise, 500 Georgian soldiers and 150 British soldiers.

Russia and Georgia fought a war in 2008 over the rebel region of South Ossetia. Relations have improved but both sides are wary.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Georgian CBank intervenes, again

MAY 5 2016 (The Conway Bulletin) – Georgia’s Central Bank intervened in the currency market for the sixth time in two months, in an effort to dampen the appreciation of its lari currency. The Central Bank bought $20m, injecting lari into the market. The intervention came as the lari reached 2.21/$1, its strongest rate since July 2015.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Georgia criticises UEFA

MAY 3 2016 (The Conway Bulletin) – Georgia’s football association said it was disappointed that UEFA, Europe’s football governing body, voted to allow Kosovo, a Balkan country that broke away from Serbia in 2008, to become its 55th member. For Georgia, the issue of breakaway states being given any recognition is a sensitive one. It has two breakaway states — South Ossetia and Abkhazia — which are supported by Russia.

ENDS

(News report from Issue No. 279, published on May 6 2016)