Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 5.2008

Saturday, 2nd of February

The number of new cars increases
A total of 2,783 new cars were registered in Lithuania in January, up 57 percent versus the year-earlier figure of 1,772, the market research company Datacenter reported on Friday. Year-on-year, the number of cars registered for personal use surged by 66 percent to 2,432 units, while the number of cars for commercial use grew by 15 percent, to 351. In January new car sales were the highest ever, DataCenter said in a statement. Volkswagen remained the leader of Lithuanian new car market in January with 366 new cars registered. Toyota was the second with 278 cars, followed by Skoda with 230 cars, Fiat with 190 cars and Honda with 158 new cars registered. In the personal passenger car segment, the most popular models included Skoda Octavia (160 cars registered), Fiat Panda (131) and Honda CR-V (71).

Apranga presents figures
Apranga, the operator of the largest Baltic clothes retail chain controlled by MG Baltic concern, posted LTL 47.5 million in sales for January, a surge of 41.5 percent versus January 2007. In Lithuania, the sales of the chain increased by 40.8 percent, in Latvia and Estonia - by 52 percent and 21.5 percent respectively, the group said in a results statement to the Vilnius Stock Exchange (VSE). The group sees its sales growing by 32.6 percent, to LTL 580 million in 2008. Pretax earnings should reach LTL 39.5 million. In Lithuania the sales of the group are seen growing by 29 percent, to LTL 372 million, abroad - by 40 percent, to LTL 208 million in 2008.

National budget revenues are presented
Lithuania's national budget revenues totaled LTL 20.257 billion in 2007, exceeding the revenue target by LTL 1.175 billion or 6.2 percent, the Finance Ministry said on Friday citing preliminary estimations. The European Union (EU) support made up LTL 3.482 billion, bringing the overall revenue figure to LTL 23.739 billion. The national budget includes both the central government and municipalities. The revenues exceeded the projected amount largely due to faster than expected growth in consumption, which was propelled by increase in loan volumes, the ministry said. The ministry also attributed the rise in national budget revenues to the improvements in tax administration. According to final estimations, the central government collected LTL 17.188 billion in budget revenues last year (ex EU support), LTL 1.06 billion or 6.6 percent above the target. Preliminary estimated municipal budget revenues totaled LTL 3.069 billion, exceeding the projected amount by LTL 114.9 million.

Friday, 1st of February

Lithuania's economic sentiment index rises to 8 percent in January
Lithuania's economic sentiment index rose to 8 percent in January, from 6 percent in December, the Statistics Department reported on Thursday. The rise of the composite indicator was largely the result of 9 percentage points surge in construction confidence and 2 percentage points increase in industrial confidence, services confidence and consumer confidence each Retail confidence, meanwhile, shrank by 1 percentage point. Compared with January 2007, the overall economic sentiment index declined by 3 percentage points. Confidence in the retail sector plunged by 13 percent, year-on-year, consumer and services confidence declined by 12 percentage points and 4 points, respectively. Meanwhile, industrial confidence rose by 3 percentage points, construction confidence - by 1 point.

Lithuanian commercial banks and foreign bank branches post figures
Lithuanian commercial banks and foreign bank branches posted LTL 1.154 billion in aggregate unaudited profit for full 2007, a surge of 73 percent from the year-earlier figure of LTL 667 million. According to the data made available by the Bank of Lithuania, all commercial banks running business in the country ended the year in the black, except for the Baltic branch of MP Investment Bank and a branch of Estonia's Balti Investeeringute Grupi Pank, both of which launched business in Lithuania last year. The top earners included SEB Vilniaus Bankas with the full-year profit of LTL 496.1 million, Hansabankas with LTL 314.3 million and DnB Nord with LTL 105.2 million.
Respublika, Kauno Diena, Lietuvos Rytas, Verslo Zinios

Achemos Group reports numbers
Achemos Grupe (Achema Group), one of Lithuania's largest business conglomerates, reported LTL 3.729 billion in consolidated revenues for full 2007, a surge of 45.4 percent versus the year-earlier figure of LTL 2.564 billion. Achema Group president Bronislovas Lubys, who revealed the preliminary performance figures of the concern at a news conference on Thursday, attributed the rise to the growth of fertilizer prices on global markets and increase in the prices of natural gas. This year the investments of the concern will grow to LTL 340 million, from LTL 178 million in 2007, and further to LTL 505 million in 2009.
Lietuvos Zinios

Thursday, 31st of January

Mazeikiu Nafta receives insurance payout
Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil), which is owned by Poland's PKN Orlen, has received an insurance payout of USD 40 million for losses caused by a major fire in October 2006. This follows the first insurance payout of USD 70 million in late September last year. The refinery's vacuum distillation unit, which was destroyed by the fire, was switched on this month after more than a year of repairs. The final amount of all losses and insurance payments are currently being calculated, the company said. The Mazeikiai District Prosecutor's Office has said recently that a pre-trial investigation established that the fire caused more than LTL 384 million in damage to the refinery.
Respublika, Lietuvos Rytas

Poor ratings for Lithuania
International ratings agency Standard & Poor's on Wednesday downgraded Lithuania's long-term credit rating to A- from A and lowered its short-term credit rating to A-2 from A-1.The outlook on Lithuania's ratings remains negative, according to information available on the agency's website. The Lithuanian Finance Ministry said that S&P cited the country's loose budget policy as a reason for the downgrade and warned that further downgrades could be on the way if budget spending continued to rise as a result of political decisions. The agency also warned that the upcoming general elections in Lithuania would increase the risk of populist policies. S&P last May changed its outlook on Lithuania's credit ratings to negative from stable, saying that the economy could be facing a hard landing. The agency said on January 21 that it would review its ratings in the near future.
Verslo Zinios, Lietuvos Zinios, Lietuvod Rytas

Construction prices increase
Construction prices in Lithuania rose by 15.5 percent in December compared with the year-earlier, the Statistics Department reported on Wednesday. The rise largely resulted on a 21.3 percent surge in wages and overhead costs. Year-on-year, residential construction prices rose by 17.8 percent, non-residential construction by 14.7 percent, and engineering structures by 14.6 percent.
Lietuvos Zinios

Wednesday, 30th of January

Prices for gas
The National Control Commission for Prices and Energy has approved an increase in the prices of natural gas for households and other regulated users, which is 4.5 percent lower on average than the previously announced rise. In line with the regulator's decision, the price of natural gas will be 7 cents lower compared with the figure announced before. The new prices come into effect retrospectively on Jan. 1. The prices of natural gas for Lithuania's households will rise by 67 percent on average from January, instead of 75 percent, as reported previously, since Lietuvos Dujos (Lithuanian Gas), the natural gas utility, has opted to use its natural gas reserves accumulated at gas storage facilities in Inchukalns, Latvia. The average price for households has been cut by 4.5 percent, to LTL 1,249 per 1,000 cubic meters, from previously announced LTL 1,308.
Respublika, Lietuvos Zinios, Kauno Diena, Verslo Zinios

Kaunas Energija is in red
Kauno Energija (Kaunas Energy), the leading Lithuania's centralized heating supplier, went into the red in 2007, weighed by warm December weather and higher fuel costs.
The losses of the group totaled LTL 10.369 million in 2007 as the sales shrank by 7.9 percent, year-on-year, to LTL 169.258 million, Kauno Energija said in a statement citing preliminary estimations. The sales of the head company alone declined by 8.3 percent, to LTL 168.003 million, and the losses made up LTL 10.398 million. In 2006 the audited profit of the head company soared by 45.7 percent, year-on-year, to LTL 9.36 million, while the net profit of the whole group made up LTL 5.907 million.

Lithuanians are less optimistic about financial and economic situation
Lithuanians are becoming less optimistic with regards to the financial and economic situation of their families and country, as illustrated by Eurobarometer data of an attitude survey. In the fall of 2007, a third of the polled Lithuanians (31 percent) said they believed the economic situation within the country to be good, with 33 percent of inhabitants having been optimistic about the country's economic situation in spring of the same year. Some 29 percent of participants polled in the fall of 2007 believed that the country's economic situation was to improve over the next 12 months; with 41 percent having voiced this opinion in spring. Some 62 percent of Lithuanians polled last fall identified inflation as the biggest problem.
Kauno Diena

Tuesday, 29th of January

GDP soars by 8.7
Lithuania's Gross Domestic Product (GDP) soared by 8.7 percent in 2007 year-on-year. GDP totalled LTL 96.676 billion at existing prices, Algirdas Semeta, CEO of the Statistics Department, said during Monday's news conference citing the preliminary estimations of the service. The department largely attributed the growth of gross added value to positive changes in the added value created by agriculture, construction, wholesale and retail as well as transport, storage and communications sectors. GDP per capita made up LTL 28,632 last year, up 9,3 percent versus 2006. In the fourth quarter alone, GDP per capita increased by 8.6 percent, year-on-year, to LTL 8,057. In October-December GDP made up LTL 27.16 billion, up 7.9 percent year-on-year.
Kauno Diena, Respublika, Lietuvos Rytas, Verslo Zinios

Monthly salary rises
The average gross monthly salary in Lithuania rose by around LTL 300 or 21.2 percent, last year to LTL 1,813 and the average net monthly salary grew by almost 24.2 percent to LTL 1,359, preliminary data from the Statistics Department showed on Monday.Real wages, adjusted for inflation, increased by 17.7 percent over the year, the Statistics Department reported. "The construction sector recorded the highest growth of salaries (31 percent), followed by agriculture (more than one-fourth), manufacturing (24 percent), and trade and hotels and restaurants (23 percent), he said.
Kauno Diena, Respublika

Great losses for Mazeikiu Nafta
Lithuania's Mazeikiu Nafta oil refinery, owned by Poland's PKN Orlen, suffered more than LTL 384 million in damage due to a major fire in October 2006, the Siauliai Regional Prosecutor's Office said. This is almost thrice the initial estimate released by the company immediately after the fire. The prosecutor's office cited a report by Prosecutor Zilvinas Generauskas of the Mazeikiai District Prosecutor's Office, who conducted the pre-trial investigation of a criminal case in which two former top executives of Mazeikiu Nafta are charged with neglect of duty. Generauskas last Friday forwarded the criminal case to the Mazeikiai District Court. The investigation has established that delayed maintenance was the cause of the fire, which destroyed a key vacuum distillation unit at the refinery. As a result of that, Paul Nelson English, the former CEO of Mazeikiu Nafta, and his deputy, Barton Lee Luck, have been charged with neglect of duty. Mazeikiu Nafta announced immediately after the fire that it had caused around LTL 130 million damage.
Kauno Diena, Lietuvos Zinios, Lietuvos Rytas

Monday, 28th of January

Lithuania's retail sales grew
Lithuania's retail sales grew by 17.2 percent last year compared with 2006 to LTL 32.156 billion the Statistics Department reported on Friday. Food retailers boosted their aggregate turnover by 7.7 percent, while non-food retailers, excluding the automotive sector, recorded a 16.9 percent rise in sales, based on preliminary data. Textile, clothing and footwear retailers posted the sharpest rise in sales, at 35.4 percent. The aggregate turnover of restaurants, bars and other catering establishments last year declined by 1.3 percent to LTL 884.8 million.

Lithuanian insurance market increased
Lithuania's insurance market grew by 36.5 percent last year compared with 2006 to reach LTL 1.945 billion the Insurance Supervisory Commission (ISC) reported on Friday. The non-life insurance market expanded by 27.3 percent over the year to LTL 1.25 billion, while the life insurance market rose by 53.5 percent to LTL 694.9 million.
Verslo Zinios

Investments into production
The biggest bread and its products producer in Aukstaitija region Jungtinis Duonos Centras obtained 100 percent of the company Didrieste's shares. The investments into the development of the company reach LTL 4 million. Saulius Rimkevicius, director of Jungtinis Duonos Centras, stated that the company needed to obtain companies, which already had the necessary infrastructure. There were more than 50 employees in Didrieste, Rimkevicius noted that all the employees would continue their work in the company. Jungtinis Duonos Centras opened 7 shops-bakeries in Lithuania and produces about 200 of different products. The company has modern and computerized technology; it is also constantly renewing the variety of its products according to the needs of consumers.
Respublika, Verslo Zinios

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