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Lithuania Business News: Archive 2003-

WEEK 41.2007

Saturday, 13th of October

Labor productivity rose by 6.7 percent
Labor productivity rose by 6.7 percent in Lithuania over 2006, the Statistics Department reported citing revised estimations of added value and labor productivity indexes. The average gross value added (GVA) per hour worked reached LTL 26.77 last year, a rise of LTL 3.17 from the revised 2005 figure of LTL 23.6. Last year the highest gross added value per hour worked, at LTL 61.96, was in the financial intermediation sector, the department said. Other sectors reporting average added value above the national average included real estate and rent business, electricity, gas and water supply, warehousing and communications mining and quarrying and the manufacturing.

Wages rose from Lithuania
The wages in Lithuania rose by 12.9 percent on average over a year from July 1, 2006 till July 1, 2007, the wages survey of international consultancy Hay Group has shown.
The rise in wages ranged from 12.2 percent in the services sector to 14.2 percent for professionals. The biggest salaries are paid in Vilnius and Klaipeda. The unqualified employees get by 5-6 times smaller wage in Lithuania than in the other EU countries, while the qualified employees are paid by 3.5-5.5 times smaller wages than in the other EU countries.
Kauno Diena

European commission warns Lithuania
European commissioner for financial planning and budget Dalia Grybauskaite has criticized Lithuania for not following fiscal discipline and has warned about possible overheating of the economy. The member of the European Commission stressed that inflation cannot be checked with conventional measures and that a system of actions is necessary. "One of the measures, beyond any doubt, is a review of the tax system /.../ yet we cannot take one measure alone. There cannot be one instrument; there must be a system of counter-inflation measures, first of targeting reduction of spending by the state. It means that the 2008 budget should be given a very serious deliberation as a budget to contain or prevent an economical and financial crisis or, unless it is 'controlled' by the parliament, it may well cause such a crisis," Grybauskaite warned, forecasting further growth of inflation in Lithuania. "We can easily predict that this growth in prices is not the last one, that Lithuania is entering a period of some serious growth of inflation," she said after stressing that "one can no longer afford banqueting, trying to be generous on promises and spending at a time like this." Lietuvos Rytas, Respublika, Lietuvos Zinios, Kauno Diena

Friday, 12th of October

Hansabankas posts numbers
Lithuanian financial group Hansabankas posted LTL 297.2 million in unaudited net profits for the first nine months of 2007, up 87 percent from the year-earlier figure of LTL 159 million. The bank alone raised the profit by 73 percent, to almost LTL 226 million, from LTL 130.8 million in January-September 2006. The bank said that more detailed results for the nine-month period would be published on October 24, along with Swedbank's financial results. The Hansabankas Group reported LTL 223.5 million in net profits for the full year 2006, a rise of 63.1 percent on the previous year. The bank's net profit increased by 66.4 percent to LTL 179.5 million.
Verslo Zinios

IKI raises sales
Lithuania's second-biggest grocery chain Iki said its sales in Lithuania and Latvia rose by 33.5 percent in the first nine months of this year from a year earlier to reach LTL 1.594 billion. Iki expects to achieve annual sales of over LTL 2 billion this year, after posting a 25 percent rise in sales to LTL 1.7 billion last year. The chain is owned by the Ortiz brothers from Belgium and Citigroup.
Verslo Zinios

Reports by the Ministry of Finances
The Lithuanian central government collected LTL 12.35 billion in budget revenues in the first nine months of this year, exceeding its revenue target for the period by LTL 149 million or 1.2 percent, the Finance Ministry reported on Thursday. Total revenues for the nine months, including EU assistance funds, amounted to LTL 14.867 billion, it said. The central government's revenues for September alone reached LTL 1.948 billion. Overall revenues including EU money were LTL 2.137 billion.
Verslo Zinios, Respublika, Kauno Diena

Thursday, 11th of October

Maxima LT reports numbers
Maxima LT, the largest retailer in the Baltics, reported LTL 5.731 billion in sales in Lithuania, Latvia, Estonia and Bulgaria in the first nine months of 2007, a surge of 27.5 percent from the year-earlier figure of LTL 4.496 billion. Sales in Bulgaria and Estonia posted the steepest growth - at 78 percent and 57 percent, respectively. Sales in Lithuania rose by 27 percent, while in Latvia the sales increased by 20.5 percent, the company said in a statement. For 2007, the company is projecting an approximately 20 percent rise in sales.
Respublika, Lietuvos Rytas

Siauliu Bank saw its net profit
Lithuania's fast-growing bank Siauliu Bankas saw its net profit for the first nine months percent to LTL 24.203 million from LTL 11.623 million a year earlier. The bank reported its financial result for the nine months to September 30 to the Vilnius Stock Exchange (VSE) on Wednesday.

National budget
Lithuania's national budget revenues, including EU assistance funds, are projected to reach LTL 29.136 billion next year, up 31.4 percent from this year's planned revenues, the Finance Ministry said on Wednesday. Excluding LTL 5112.8 million in grants from the EU budget, national budget revenues are expected to be by 25.9 percent higher than this year. National budget appropriations should increase by LTL 6608.3 million compared with this year to reach LTL 30.217 billion, the ministry said. The Cabinet approved next year's draft budget, which includes both the central government and municipalities, on Wednesday.
Lietuvos Rytas, Respublika, Verslo Zinios, Kauno Diena

Wednesday, 10th of October

DnB Nord Bankas posts numbers
DnB Nord Bankas, one of the largest banks in Lithuania, said on Tuesday that its net profit for the first nine months of this year soared by 60.7 percent to LTL 80.34 million, from LTL 50.01 million a year earlier. The bank said this was its best ever financial result for the January-through-September period. It attributed the growth in profits to a 35 percent increase in the loan portfolio, strong performance in the investment banking market, the continued improvement in operating efficiency and its growing customer base. Driven by the rapid growth in loans, the bank's assets increased by 38.5 percent year-on-year to reach LTL 9.58 billion at the end of September. Year-on-year, the total loan portfolio, excluding specific provisions but including accrued interest, grew by 47.1 percent to LTL 7.86 billion. Loans to individual customers rose by 65.1 percent to LTL 3.73 billion and loans to corporate customers were up 34 percent to LTL 4.13 billion.
Verslo Zinios

Forecasts of Lithuania's Free Market Institute
The growth of Lithuania's economy should remain robust in 2007-2008, the latest business opinion poll of Lithuania's Free Market Institute (LLRI) has revealed.
Market players have revised their forecasts for the economic growth in 2007 up by 0.3 percentage points to 7.2 percent. The projections for growth in 2008 have been pegged at 6.5 percent. Expectations of economic development are supported by the growth of consumption fuelled by rising wages and loan portfolio. The companies are boosting investments in response to growing consumption and shortage of capacities, in particular labor force.
Lietuvos Rytas, Kauno Diena

Movie market in Lithuania
The Simpsons Movie, which debuted on Lithuania's screens late in summer, grossed LTL 2.228 million in box-office receipts beating the previous box-office record held by Titanic for nine years. However, Titanic managed to retain the title of the most watched movie with 247,000 viewers. The Simpsons Movie, meanwhile, pulled in 217,000 viewers, the movie portal reported. The list of movies, that have been the most profitable in Lithuania, also shows the Ice Age 2 The Meltdown, which ranks the third with the box-office receipts of LTL 1.641 million and is followed by Shrek the Third, Open Season and Ratatouille.
Lietuvos Rytas

Tuesday, 9th of October

DnB Nord launches mortgage loans with interest rate caps and collars
DnB Nord, the third largest Lithuania's commercial bank by assets, is launching mortgage loans with interest rate caps and collars. A capped and collared mortgage is a variable rate mortgage, which has a fixed upper rate limit, i.e. the cap, and a fixed lower rate limit, i.e. the collar. The new mortgage credit would help protect customers against often hardly predictable surges in interest rates, the bank said in a statement. "Until now the customers could choose between fixed or floating rates on mortgage credits in Lithuania. We are the first on the market to offer the third option," Sigitas Zutautas, executive vice-president of DnB Nord, said at a news conference on Monday.
Respublika, Kauno Diena, Verslo Zinios

Lietuvos Rytas buys Channel 5
Lietuvos Rytas, the publisher of the same-named Lithuanian daily newspaper, has purchased a 51 percent stake in 5 Kanalas (Channel 5), the biggest regional TV station in the country, from Rubicon Group. The transaction will be finalized after receiving the required regulatory approvals, Lietuvos Rytas and Rubicon Group said in a statement on Monday. They did not disclose the value of the deal. Lietuvos Rytas CEO Gedvydas Vainauskas said the acquisition was "a logical step toward expanding the company, which has been active in the media market for 17 years now."
Kauno Diena, Lietuvos Rytas, Verslo Zinios

Biok Laboratory posts numbers
Lithuanian cosmetics producer Biok Laboratorija is projecting record sales of LTL 10 million for full 2007. In January-September, the sales of the company soared by 25 percent, year-on-year, to LTL 7.13 million and almost equalled the result of full 2006, the producer said in a statement. Linas Cereska, Biok Laboratorija CEO, attributed the growth of sales to the introduction of new products on the market. The company produces 230,000 units of output per month on average. The company is investing generously into the automation of manufacturing processes amid growth of sales and output. Earlier this year Biok Laboratorija acquired an automatic labelling machine. Biok employs a workforce of 46.
Verslo Zinios

Monday, 8th of October

Prices for food products
Food product prices in Lithuania jumped by 3.5 percent in September compared with August, the Statistics Department reported o Friday. In the domestic market, the sharpest rise was in prices for grain mill products, 30.8 percent. Milk product prices went up by 9.7 percent over the month. Export prices for food products and beverages increased by 6.6 percent. Prices for all industrial products sold in September rose by 1.1 percent month-on-month. Prices of products sold on the domestic market grew by 1.2 percent and export prices were up 1.1 percent.
Kauno Diena

Reviving Geoterma
The government decided to revive the heating company Geoterma, which soon may announce its bankruptcy. The officials decided to raise its authorized capital and improve its financial condition. Geoterma was built as the experimental geothermal electric power plant and had to provide alternative energy to Klaipeda. However, the company stopped its activity at the beginning of summer due to debts. Geoterma suffered LTL 4.789 million of losses and currently, it does not produce any heating energy. The Minister of Economy Vytas Navickas claimed that Geoterma might become active and competitive company if it produced not only heating, but also electricity.
Kauno Diena, Respublika, Lietuvos Zinios

Unemployment rate in Kaunas
The unemployment rate has slightly decreased in Kaunas and its regions and it reached 2.1 percent on October 1. 8,652 people were searching for jobs according to the data of that day. There were by two times more women than men looking for work, every third person was older than 50 years old. About 30 percent of the ones registered in the Labour Market had higher or high education.
Kauno Diena

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