||Lithuania Business News: Archive 2003-
Saturday, 15th December
New airline in Lithuania
Utair, Russia's third-largest airline, is launching on Friday flights between Vilnius and Moscow, Vilnius International Airport said. Utair is the second airline after FlyLAL-Lithuanian Airlines to operate regular flights between the Lithuanian and Russian capitals, the airport said. The Russian airline will use ATR-42 aircraft for daily flights between Vilnius and Moscow's Vnukovo airport. Utair is the 11th air carrier operating regular flights out of Vilnius. The airline, which is based in Tumen, is majority owned by four Russian companies.
Power distribution for energy companies in Lithuania
Government-hired experts have valued VST, the privately-owned operator of the western half of Lithuania's power distribution grid, at 2.365 billion to LTL 2.927 billion the highest value among the three energy companies slated to merge, official data showed on Friday. Rytu Skirstomieji Tinklai (RST), the state-controlled operator of the eastern half of the distribution grid, has been valued at 2.217 billion to LTL 2.743 billion, and Lietuvos Energija (Lithuanian Energy), the state-run power transmission company, at 2.052 billion to LTL 2.568 billion.
Travellers will pay more
Travelers will spend more money next year. The consular fee is to be increased by the US and European Union (EU) countries, Lithuania among them. It is said that from January 1st of 2008, the fee for issuing non-immigration visas will go up to USD 131 from the current fee of USD 100. The US State Department notes that the increased fee is to compensate for the growing expenditures of security services, which are related with the processing of visa applications, and also expenditures that have to do with collection of biometrical data. EU nations are increasing the visa fee for similar reasons. Director of the Public Relations Department of the US embassy to Lithuania, Ilya Levin, says that the US State Department is obliged by law to charge expenditures for the issuing process of non-immigration visas. The visa fee is set accordingly. A study conducted in 2004 showed that the USD 100 fee no longer covers the processing of non-immigration visas due to the new demands made with regards to security, usage of informational technologies and inflation.
Friday, 14th of December
Lithuania lags behind other Central and Eastern European countries
Lithuania is lagging far behind other Central and Eastern European (CEE) countries in terms of contributions of its residents into investment and cash value life insurance offering a chance to make additional savings for old age, the CEE study conducted by the Lithuanian Life Insurance Association (LGDA) has revealed. The association compared average monthly contributions of the insured who have opted for investment or cash value life insurance. In Lithuania, the average monthly contribution into investment and cash value life insurance reaches LTL 113, or 6 percent of monthly income, per capita, i.e. twice as less compared with the Estonians (LTL 220), three times less compared with the Poles (LTL 354) and four times less compared with the Czechs (LTL 481), the study has shown. In 2008 the average amount is expected to grow to LTL 200, or 9 percent of monthly income in Lithuania. Last year the residents of all sixteen CEE states spent almost LTL 3 billion on life insurance, LGDA said. In Western Europe, meanwhile, the expenses of population on life insurance were 600 times larger, at almost LTL 1 884 billion. According to the estimations of the association, in Lithuania, the scale of investment and cash value life insurance is equal to 0.6 percent of gross domestic product (GDP), while in Estonia the rate is 0.8 percent, the Czech Republic - 1.5 percent, and in Poland - 1.7 percent.
Baltic retailers lost EUR 207 million to shoplifters
Baltic retailers lost 207 million euros to shoplifters during the year from July 2006 to July 2007, which indicates an increase by 7.6 percent year-on-year, shows the Global Retail Theft Barometer presented by the company Neto Baltic on Thursday.
The barometer does not provide separate data for Lithuania, Latvia and Estonia. The losses caused to Baltic retail companies by thefts this year make 1.42 percent of their annual turnover, a rise by 0.1 percentage points since 2006. The region holds the leading position in Europe in terms of this indicator. According to the barometer, retail companies around the world incurred a loss of EUR 72.424 billion due to shoplifting this year, including EUR 29.285 billion incurred by European retailers. The losses in the Baltic states are not only the highest but also saw the biggest increase - 7.6 percent. In Ireland, the losses went up by 6.4 percent and in Switzerland by 4.3 percent. The biggest decrease in retail losses caused by shoplifting was reported in Iceland (5.7 percent), Denmark (3.2 percent) and Slovakia (2.9 percent). Kauno Diena, Verslo Zinios, Respublika, Lietuvos Rytas
Lithuanian central government collected LTL 1.33 billion in budget revenues
The Lithuanian central government collected LTL 1.33 billion in budget revenues in November, exceeding its monthly revenue target by LTL 345.5 million or 35.1 percent, the Finance Ministry reported on Thursday. Total revenues, including LTL 269.9 million in EU assistance funds, amounted to LTL 1.6 billion last month, it said. The 2007 central government budget projects annual revenues of LTL 19.214 billion, including LTL 3.086 billion in EU funds.
Lietuvos Rytas, Verslo Zinios, Verslo Zinios
Thursday, 13th December
Govermetn approves mid-term inflation management strategy
Lithuania's government has approved a mid-term inflation management strategy as it seeks to rein in fast growth of consumer prices. The strategy outlines tax and subsidy regulatory measures that should stabilize the prices of housing and prevent unreasonable rise in prices regulated by the central or local authorities. On top of that, the measures set forth in the strategy should boost competition, the government's press service reported. The authorities aim to review and adjust the methodologies of regulated prices. Alongside measures to intensify competition, the authorities would seek to prevent any rise in prices that might result on unfair competition or cartel agreements. The annual inflation hit 7.9 percent, with the monthly rate reaching 1.1 percent.
Lietuvos Zinios, Verslo Zinios, Respublika
Invalda projects its consolidated net profit to reach LTL 98.5 million
Lithuania's investment group Invalda is projecting its consolidated net profit to reach LTL 98.5 million. The board of Invalda approved the 2008 consolidated projections on Wednesday, the company said in a statement to the Vilnius Stock Exchange (VSE). Forecasts were based on the assumption that the value of investment assets would not undergo any significant changes in 2008, the structure of financial and real estate markets, as well as the structure and investment assets of the group would remain largely unchanged. The net profit on Invalda's operations in the financial sector is expected to reach LTL 7.6 million, real estate sector - LTL 48.5 million, pharmaceutical sector - LTL 62.2 million, furniture manufacturing - LTL 5.7 million in 2008.
Minimum monthly salary will rise
The minimum monthly salary in Lithuania is planned to rise by LTL 100 or 14.3 percent to LTL 800 from January 1 next year, the Social Security and Labour Ministry said on Wednesday. The minimum hourly pay rate should increase by 15.75 percent, to LTL 4.85 from the current LTL 4.19. The ministry was to submit on Wednesday a draft resolution for increasing the minimum salary to the government for approval. If approved, the increase will cost the state an additional LTL 14 million annually, the ministry said.
Respublika, Kauno Diena
Wednesday, 12th December
GDP will rise by 9.2 this year
Lithuania's gross domestic product (GDP) will rise by 9.2 percent this year, with the growth due to slow down to 7.5 percent in 2008 and further down to 6.5 percent in 2009, Hansabankas, the leading Lithuania's commercial bank, projects. However, the growth should reach 5-7 percent to be balanced. Tomas Andrejauskas, head of Financial Markets Division at Hansabankas, pointed out. "Now the growth rate exceeds the potential, so we have to expect a slowdown at some point in future," he said at a news conference on Tuesday. The average annual inflation will grow to 6.8 percent in 2008, from 5.5 percent this year, and will decline to 4.8 percent in 2009, Hansabankas has said in its latest macroeconomic forecasts. "However, the population is more concerned with annual inflation, which hit 7.6 percent in October. According to our projections, this rate will reach 9.2 percent in January 2008," Andrejauskas said. The rise in inflation would result on several factors, including the surge in natural gas prices and the boosting of excise duties levied on fuel from January, in line with Lithuania's commitments to the European Union (EU). Moreover, the rates of excise duty levied on tobacco would be raised from March.
Respublika, Verslo Zinios
Negative outlooks from Fitch
Fitch's downgrading last week of Lithuania's outlook to negative was possibly aimed at warning the country's authorities against overspending, a leading analyst said on Tuesday. "Any analyst or any credit ratings agency would think about why the state allows itself the luxury of forming a fiscal deficit at a time when economic growth has almost reached 10 percent," Gitanas Nauseda, advisor to the president of SEB Vilniaus Bankas, told reporters. "The question is why, in this context, we should believe in the government's good intentions to achieve a budget surplus in 2009, when economic growth is forecast to be noticeably slower than in 2008," he said. Fitch revised last Friday the outlook on Lithuania's long-term foreign currency and local currency ratings to negative from stable, citing inflationary pressures and a possible delay in euro adoption. The downgrade came a day after the country's parliament passed a budget with a deficit for 2008, despite calls by economists to tighten fiscal policy.
Negotiations about national investor project failed again
The negotiators of Lithuania's government and private equity company NDX Energija failed to reach an agreement on their respective stakes in the soon-to-be-established national investment company on Monday. Complicated talks will continue on Tuesday. "We have come closer to the agreement. However, we have failed to agree on a general statement that would be acceptable for both parties. One or two essential questions are left - the assets ratios and other questions related with property," Economy Minister and head of governmental group of negotiators Vytas Navickas told the reporters after the Monday's round of talks. He expected NDX Energija to state its final positions on "these essential questions" on Tuesday. Navickas denied that the talks got stalled. The talks on the national investment company that would implement key energy projects would be closed this week, he said. The government and NDX Energija also fail to agree on the framework for the establishment of the national investment company. NDX Energija has proposed to set up a separate parent company and rejected the government's proposal to use current power utility Lietuvos Energija (Lithuanian Energy) as the framework.
Tuesday, 11th of December
Consumer prices rise
Consumer prices in Lithuania rose by 1.1 percent in November from October, driven by increased fuel and food prices and utilities costs, the Statistics Department reported on Monday. The average annual inflation rate in November was 5.4 percent and the 12-month inflation rate was 7.8 percent, it said. In November 2006, the monthly inflation rate was 0.8 percent. November's CPI was pushed up by increased prices for transport goods and services (up 3.5 percent), food and soft drinks (up 1.1 percent) and housing, water, electricity, gas and other fuels (up 1.2 percent), the Statistics Department said.
Kauno Diena, Respublika, Lietuvos Zinios, Lietuvos Rytas
Ukio bank aims to borrow money
Ukio Bankas, the fast-growing Lithuanian commercial bank, aims to borrow EUR 27 million for a ten-year period. The bank signed a ten-year subordinated loan agreement in London on December 7, the bank said in a statement. The loan will be extended via the purchase of Ukio Bankas' subordinated debt securities. "This subordinated loan, which brings in long-term monetary resources from foreign funds, is a yet another one solid sign of confidence of foreign investors in Ukio Bankas," Edita Karpaviciene, Ukio Bankas' chairwoman, said in the statement.
Kauno Diena Respublika, Verslo Zinios
First tender for Rail Baltica project is announced
Lithuania has announced the first tender within the framework of Rail Baltica project.
The state-run railway operator Lietuvos Gelezinkeliai (Lithuanian Railways) announced the international tender on the engineering design of the first stage of Rail Baltica project, the 40-kilometers long stretch from the Lithuanian-Polish border to Marijampole, on December 8. Bids will be accepted till January 23, 2008. The contract shall be executed by September 1, 2009. Lithuania aims to assign LTL 500 million for the implementation of the first stage of Rail Baltica, the trans-European railway line due to connect the Baltic countries, Finland and Poland.
Kauno Diena, Respublika, Verslo Zinios
Monday, 10th of December
Producers prices rise
Producer prices or the prices for manufactured goods at the factory gate soared
Compared with October, the producer prices rose by 2.9 percent. Excluding petroleum products, the producer prices rose by 12.3 percent over a year and edged up by 0.7 percent month-on-month. The rise mostly resulted on a 8.5 percent increase in the prices of petroleum products.
Orion Securities recommend buying Pieno Zvagzdes' shares
The analysts of Orion Securities, a Lithuanian brokerage owned by Norway's investment holding Orion, have issued a Buy recommendation on the shares of Pieno Zvaigzdes, putting the target value of the leading Lithuania's dairy company at LTL 6.5 above the market price of LTL 5.90 at Thursday's close. Pieno Zvaigzdes is projecting its sales reaching LTL 750 million in 2008 with the net profit margin being at least 4 percent. For Pieno Zvaigzdes is quoted on the blue-chip Main List of Vilnius Stock Exchange (VSE).
Mail and courier services market rose
Lithuania's mail and courier services market, as measured by revenues, rose by 11.7 percent, to LTL 155.9 million in January-September, from LTL 139.6 million a year earlier, the country's Communications Regulatory Authority (RRT) reported citing final estimations.
The courier segment soared by 18 percent, year-on-year, to LTL 32 million in July-September, while the mail services revenues increased by 1.7 percent up to LTL 22.3 million.
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