Cyprus Business Now: weekly wrap-up

Here are the top business stories in Cyprus from the week starting June 24:

Deputy Minister of Shipping Marina Hadjimanolis recently embarked on a series of important meetings in Geneva, according to an official statement by the ministry released on Tuesday. The statement noted that on June 20, Hadjimanolis visited Geneva with the express purpose of promoting the Cypriot ship registry. Moreover, her visit included a series of high-level discussions aimed at bolstering Cyprus as a prime flagging destination for global shipping enterprises. A key meeting was held with Gianluigi Aponte, founder and President of the MSC Group, the largest container shipping company in the world. The discussions revolved around the latest developments in the global shipping industry and future expansions of MSC’s fleet. “MSC is set to enhance its fleet with the addition of new, modern ships currently under construction,” noted in the statement.

In a related sphere of economic activity, Ariana Resources, which owns 61 per cent of UK-registered Venus Minerals, which focuses on copper-gold assets in Cyprus, has announced its final audited results for the year ended December 31, 2023. The AIM-listed mineral exploration and development company, with interests in Africa and Europe, also revealed the date for its annual general meeting. Ariana Resources reported a break-even position for 2023, compared to a £5 million profit in 2022, mainly due to a £4 million decline in Zenit’s profitability and increased operational costs. In addition, administrative costs fell by £0.7m, but foreign exchange gains were £2m lower. The company also noted that the Turkish Lira’s decline impacted overall financial results. Chairman Michael de Villiers reflected on the company’s achievements in 2023, describing it as a year of “remarkable progress and significant transformation” despite global economic challenges. “Ariana Resources has demonstrated resilience, innovation and a commitment to sustainable growth, positioning us strongly for the future,” he said. He highlighted the company’s initial 2.1 per cent interest in the feasibility-stage 1.8Moz Dokwe Gold Project in Zimbabwe, which led to a proposed merger with Rockover Holdings Limited.

Similarly, the tourism sector is facing its own challenges. June saw a muted start for the hotel industry in the Paphos district but has shown some improvement as the month progressed, according to the president of the Paphos Hoteliers Association (Pasyxe) Evripides Loizides. In statements made to the Cyprus News Agency (CNA), Loizides mentioned that June is expected to end with slightly lower occupancy rates compared to last year, estimated to range between 65 per cent and 85 per cent. He also highlighted that 2024 is anticipated to see slightly lower arrival numbers in Cyprus, provided there are no unforeseen events. Moreover, he mentioned that occupancy rates in Paphos hotels are also expected to decrease, noting that “statements made in our region are not helping at all”, referencing recent geopolitical developments, including threats against Cyprus. When asked about the reasons behind the reduced occupancy, Loizides attributed it to several factors, including the flow of tourists to the occupied areas, stays in illegal short-term rental units, and the shortened duration of tourist stays in Cyprus as they attempt to cut vacation costs. Reviewing the situation in Paphos since the beginning of the year, the regional Pasyxe president noted that January was a challenging month, slightly worse than the previous year. However, he remarked that from February 10 to the end of March, Paphos experienced its best tourist performance ever, despite the relatively small number of tourists. “The number of tourists may have been small, but the situation with visitor numbers progressed to better levels,” he said, noting that this is encouraging in terms of Paphos’ potential for year-round tourism.

Transitioning from tourism to infrastructure developments, the official inauguration of the European Investment Bank’s (EIB) new offices in Cyprus is set to take place this autumn, with EIB President Nadia Calvino scheduled to attend, Finance Minister Makis Keravnos announced on Wednesday following a Cabinet meeting. Keravnos revealed that the decision was finalised after a recent meeting with President Calvino in Luxembourg, leading to an immediate agreement to establish the Bank’s presence on the island. Moreover, he explained that to speed up the process, EIB officials will be temporarily accommodated in the Ministry of Finance until they can move into a permanent office. “This decision is very important because the experts and the executives will be present here and will have a direct understanding of the needs of our economy and our society, but we will also use their expertise for various issues and projects that we are promoting as a government,” Keravnos explained. Furthermore, Keravnos noted that the specifics regarding the executives are expected to be finalised in the coming days, and the office space at the Ministry is prepared and awaiting their arrival. Responding to inquiries about staffing, Keravnos mentioned that while the EIB will have its staff on the island, the decision to hire local employees from Cyprus would be at the discretion of the Bank. “It is up to them how they staff the offices,” he said.

Also contributing to the regulatory and economic landscape of Cyprus, the Cyprus Securities and Exchange Commission (CySEC) on Wednesday released a consultation paper (CP-01-2024) inviting stakeholders to provide feedback on proposed fees and information requirements for entities falling under Regulation (EU) 2023/1114, also known as MiCAR. This regulation, effective from May 31, 2023, establishes a unified framework for crypto-assets not classified as financial instruments. MiCAR categorises crypto-assets into three groups. These include asset-referenced tokens (ARTs), electronic money tokens (EMTs), and a residual category for other crypto-assets. Moreover, CySEC’s new responsibilities under MiCAR include overseeing entities such as offerors of non-ART and non-EMT crypto-assets, issuers of ARTs (excluding those from credit institutions), and Crypto-Asset Service Providers (CASPs).

Further emphasising the importance of energy and environmental initiatives, Cyprus Energy Regulatory Authority (CERA) Chairman Andreas Poullikkas this week provided an analytical overview of the European Union’s strides towards establishing a robust hydrogen market by 2030. “The EU’s hydrogen package not only clarifies market rules but also secures long-term investment across the entire hydrogen chain—from production to consumption,” said Poullikkas. He further highlighted the revised Renewable Energy Directive, which sets ambitious targets for renewable hydrogen use in both the industrial and transport sectors. Expanding on the EU’s commitment, Poullikkas noted the introduction of precise definitions and rules for renewable hydrogen. “These rules are crucial as they dictate how renewable hydrogen can be counted towards EU targets, ensuring transparency and consistency,” he said. The EU is setting the framework and is also actively supporting the development of necessary infrastructure.

Lastly, Chief Scientist Demetris Skourides used his address at the opening of the Cyprus Space Research and Innovation Centre (C-SpaRC), hosted by the Cyprus Space Exploration Organisation (CSEO), to unveil a dynamic blueprint for Cyprus’ future in space exploration. At the event, which took place on Wednesday, Skourides shared his excitement about the country’s strategic vision for 2022-2027, emphasising a multi-faceted approach that covers Space Technologies, Communication Services, Earth Observation, education, and science. “A key strategic objective for us is to become an ESA Associate Member by 2025,” he said, showcasing Cyprus’ ambitious goals. Skourides emphasised the broad objectives of the strategy which aim to bolster top-class research, commercialise results, support startups in the global space industry, and develop satellite-based services.