||Lithuania Business News: Archive 2003-
Saturday, 17th of November
Talks over the national investor will begin on November 20
Lithuania's government and private-equity NDX Energija will open talks concerning the setting up of a national investment company coming Tuesday, Novemb Color er 20. On Monday noon a special task group led by Economy Minister Vytas Navickas would review the conclusions drawn by the National Audit Office as regards the evaluation of three Lithuania's energy companies due to be merged into a single energy giant, the minister told the reporters on Friday. Navickas would not predict as to how long the talks with NDX Energija might last. The National Audit Office, as urged by President Valdas Adamkus, would provide its conclusions concerning the evaluation of three energy companies - Lietuvos Energija, VST and RST - performed by KPMG Baltics. Lietuvos Zinios, Kauno Diena, Respublika
Polska Grupa Farmaceutyczna buys Limedika
Polska Grupa Farmaceutyczna (PGF), the leading Polish drugs wholesaler, has finalized the purchase of Lithuania's drugs wholesaler Limedika and the drugstore chain Gintarine Vaistine. The control of Lithuania's companies was taken over after the signing of relevant documents on November 9, PGF said in a statement to the Warsaw Stock Exchange. Earlier PGF said it would pay EUR 22.5 million for the majority interest in two Lithuania's companies. Polska Grupa Farmaceutyczna is buying 50 percent plus one share in Limedika and Gintarine Vaistine each. The Polish company reported EUR 834.874 million in sales for the first nine months of this year, up 9.5 percent year-on-year. The net profit grew by 23.9 percent, to EUR 12.625 million. The company is ranked one of largest 100 companies in Central and Eastern Europe by turnover.
Kauno Diena, Lietuvos Rytas
Presidetn signs the law of fiscal discipline
Lithuanian President Valdas Adamkus signed on Friday the law on fiscal discipline.
In his opinion, adoption of the legislation after long parliamentary debates is of vital importance because it stipulates rules of fiscal discipline that should ensure long-term stability of the finances of the state sector and consistent economic development in the future, the presidential press service said. "Implementation of the law is very important. I hope that provisions of the Law on Fiscal Discipline will be taken into consideration during the discussion of the 2008 budget at the parliament and ungrounded increase of the spending will be prevented," said Adamkus. However, according to the press release, the president lacks topical and ambitious provision in the new legislation. The law, which obligates the state sector to manage their finances in a way to ensure surplus or balance of budget, was adopted by Lithuanian lawmakers on November 8.
Respublika, Kauno Diena, Lietuvos Rytas
Friday, 16th of November
Fine for Finasta
Lithuania's Securities Commission has imposed a LTL 38,000 fine on Finasta brokerage on charges of insider trading, stating that the brokerage used non-public information while trading in the stocks of Alita, the leading Lithuania's alcohol producer, on the Vilnius Stock Exchange (VSE).
In its turn, Finasta dismissed the charges of the Commission as unfounded and unfair. Respublika, Lietuvos Rytas, Verslo Zinios
SEB Vilniaus Bank will change its name
SEB Vilniaus Bankas, the largest Lithuania's commercial bank by assets, will change the name to SEB bank late in January. The renaming process launched more than two years ago would be closed at the end of January 2008, in line with a decision adopted by the bank's shareholders on Thursday. All signboards would be replaced by April 1. "SEB Vilniaus Bankas consolidated its leadership on Lithuania's banking market during seventeen years of operations; it has gained the confidence of customers, is well known and recognizable. The bank has been controlled by SEB group for seven years, and we want our customers to see us as a member of leading international group, not just as a strong local bank," Audrius Ziugzda, SEB Vilniaus Bankas president, said in a statement. The renaming of the bank was a natural and planned measure of SEB Vilniaus Bankas' expansion, he added.
Respublika, Verslo Zinios, Lietuvos Rytas
Lifosa reports numbers
Lithuanian phosphate fertilizer manufacturer Lifosa reported LTL 733.793 million in sales for the first ten months of 2007, up 32.8 percent versus the year-earlier figure. In October alone, the sales soared by 47.4 percent, year-on-year, to LTL 91.507 million. The sales of diammonium phosphate, the company's key product, increased by 2.1 percent, to 677,970 tons. In monetary terms, the sales of diammonium phosphate soared by 40.2 percent, year-on-year, to LTL 633.253 million in the reporting period, the company said in a statement. Lifosa is 91.02 percent owned by the Russian mineral fertilizer group Eurochem.
Thursday, 15th of November
Mazeikiu Nafta aism to resume the fining
Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refining complex controlled by Poland's oil concern PKN Orlen, aims to resume the refining today, almost two months after the launch of turnaround, the largest in the company's history.
However, the refinery would not work at full strength in the nearest time since some installations damaged by last year's fire were still worked on. The installation affected by fire would be switched on late in 2007. Rosvaldas Gorbaciovas, Mazeikiu Nafta's public relations director, refused to comment. The refinery is expected to reach the regular operating mode in a couple of days. Mazeikiu Nafta intended to invest USD 80 million into the turnaround.
Kauno Diena, Lietuvos Rytas
Rates for Snoras
Fitch Ratings, the international rating agency, has upgraded the outlook for the Long-term Issuer Default Rating (IDR) of Snoras, the fourth by assets Lithuania's commercial bank, to Stable from Negative, and affirmed the bank's ratings at Long-term IDR 'BB-'. The same ratings were confirmed for Snoras' 175 million euros issue of three-year Eurobonds placed in May. The change in outlook reflected Snoras's improved capitalisation level following recent registration of the LTL 140 million of equity increase, the agency said in a statement. However, Fitch notes that, although improved, capitalisation is only moderate in the medium-term and further capital injections are likely needed to support growth. Other ratings remained unchanged - the short-term IDR 'B', Individual 'D' and Support '4'.
Construction market in Lithuania
Lithuanian building companies carried out construction work for a total of LTL 3.2 billion during the third quarter of this year, up 17 percent year-on-year, the Statistics Department reported citing preliminary estimations.
The total value of construction work performed within the country rose by 16.1 percent, to LTL 3.1 billion, while the value of construction work carried out abroad soared 2.1 times, LTL to 44 million.
Respublika, Lietuvos Rytas
Wednesday, 14th of November
McDonald's is bought by Premier Capital
Malta-registered Premier Capital aims to buy the McDonald's restaurant chain in the Baltic countries. Premier Capital has applied to Lithuania's Competition Council over a permission to acquire 100 percent of UAB McDonald's Restaurant. Premier Capital would first acquire the McDonald's subsidiary in Latvia, subsequently - companies in Lithuania and Estonia. However, the purchase agreement has not been concluded as yet. Virginija Girulska, McDonald's marketing director for the Baltic States, said she would provide additional details later. Meanwhile, market players noted that the environment for McDonald's in Lithuania had been rather tough in recent years. Earlier this year the Lithuanian subsidiary of the global fast food giant reduced its authorized capital by LTL 5.6 million. In Lithuania, McDonald's runs six fast-food restaurants employing a combined workforce of about 400.
Mazeikiu Nafta presents numbers
The unaudited net profit of Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refining group controlled by Poland's PKN Orlen, totalled LTL 138.3 million in the first nine months of this year, a plunge of 58 percent versus the year-earlier figure of LTL 374.1 million. The company reported a profit for the nine-month period despite the cutting of crude supply by Druzhba pipeline in July 2006 and a significant decline in refining volumes, the statement said. The refinery processed 4.98 million tons of crude in January-September, a decline of 26.4 percent compared with the year-earlier figure of 6.77 million tons.
Lietuvos Rytas, Respublika
Vilnius Vodka reports earnings
Vilniaus Degtine (Vilnius Vodka), one of Lithuania's leading spirits producers, reported LTL 347,600 in pre-tax earnings for the first nine months of 2007, down 12 times compared with the year-earlier figure. The sales of the company controlled by France's Belvedere edged up by 0.02 percent, year-on-year, to LTL 43.329 million in the reporting period. Volume sales shrank by 4.8 percent, to 7.298 million liters in January-September, the company said in a statement.
Tuesday, 13th of November
Danisco Sugar closes its plant in Panevezys
Danish-equity sugar maker Danisco Sugar has decided to close a plant in Panevezys, North Central Lithuania, at the end of this year's season and concentrate the production of sugar at its facility in Kedainiai. The plant in Kedainiai would be capable of producing the expected 71,100 tons quota as a result of mid-scale investments, the company said. The amendments to the European Union (EU) sugar reform adopted in September enable the growers to sell up to 10 percent of the national quota to the EU thus promoting the decline in EU sugar output. Danisco Sugar aims to sell 13.5 percent of the quota held by the company.
Lietuvos Zinios, Kauno Diena, Lietuvos Rytas
Talks about the national investor are postponed
The talks between Lithuania's government and private-equity NDX Energija concerning the establishment of national investment company have been postponed till Monday, November 19 although initially scheduled for Tuesday, November 13. On Thursday, November 15, the government expected its adviser HSBC to provide arguments that would support the positions of the state, thus the official negotiations with NDX Energija had been delayed, Economy Minister Vytas Navickas told the reporters on Monday. "We have identified the aspects, which may boost the state's share in the soon-to-be-established national investment company, and we will carry out additional economic estimations so as to substantiate our objectives - to ensure that the state's interest in the national investment company is as large as possible," he said. Darius Nedzinskas, NDX Energija CEO, confirmed that the representatives of the company were no longer invited to attend a meeting of Navickas-led task group on Tuesday. "I think that the government's task group needs more time to get ready for the talks. The entity to be established is extremely important, and I believe that a delay of one or two days, or one or two weeks is quite normal if we are to get well-prepared. Now I do not see any signs that would prevent from establishing the new company by January 1, as planned. We may still do it just in time, and I do not see any reasons to panic," Nedzinskas said. According to reports that have not been confirmed officially, Lietuvos Energija might get 31 percent of the new company, RST - 33 percent, and VST - a 35 percent interest, in line with the evaluation performed by KPMG Baltics.
Rokiskis Cheese acquires shares of Jekalpils Piena Kombinats
Rokiskio Suris (Rokiskis Cheese), the leading Lithuania's dairy group, has acquired 50.05 percent of Latvia's Jekabpils Piena Kombinats for an undisclosed amount.
Jekabpils Piena Kombinats specializes in the production of fermented cheese as well as sales of raw milk, Rokiskio Suris has said in a statement. The Latvian company reported LTL 14.5 million in turnover as it acquired 15,000 tons of raw milk in Latvia in 2006. Rokiskio Suris CEO Antanas Trumpa and Pieno Pramones Investiciju Valdymas, a company controlled by Trumpa, held 47.87 percent of Rokiskio Suris' stock as of April. Small shareholders controlled the remaining stake.
Monday, 12th of November
Consumer prices rise in Lithuania
Consumer prices in Lithuania rose by 1.5 percent in October versus September, with the increase being the largest this year and the most significant since May 2004, when Lithuania acceded to the European Union (EU). In October 2006, monthly inflation made up 1 percent in Lithuania. In October this year, the twelve-month inflation average reached 5.1 percent, while the annual inflation, i.e. versus October 2006, hit 7.6 percent, the Statistics Department reported.
Danske Bank warns the Baltic States
Economic and political conditions in the Baltic countries have taken a turn for the worse this week, the Nordic and Baltic finance group Danske Bank has warned noting a further growth of inflation in Estonia and Latvia and projecting that the rise in consumer prices might exceed 10 percent in all three Baltic countries in 2008. The analysts of the bank also highlighted complicated political situation, in particular in Latvia where Prime Minister Aigars Kalvitis said earlier this week that he would step down early in December. The signs of worsening conditions are the most obvious in Lithuania suffering a fast rise in interest rates on money markets, Danske Bank has said in a report. With less than a year left until parliamentary elections, Prime Minister Gediminas Kirkilas has limited opportunities for the implementation of required reforms. The worsening of situation in the Baltic countries coincided with problems on global credit markets, which is unfavorable for Lithuania, Latvia and Estonia, which have high current account deficits and overvalued real estate markets.
Producer prices soar by 13,4 percent
Producer prices or the prices for manufactured goods at the factory gate soared by 13.4 percent in October year-on-year, the country's Statistics Department reported.
Compared with September, the producer prices rose by 2.1 percent. The monthly rise largely resulted on a 4.5 percent increase in petroleum products, 3.4 percent growth in the prices of chemicals and a 2.9 percent rise in the prices of foodstuffs and drinks.
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