Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 12.2008

Saturday, 22nd of March

Recommendation on Apranga shares
Hansabank Markets has issued a Hold recommendation on shares of Apranga, the leading clothing retailer in the Baltics, putting its target price at LTL 12 per share. The target price is 0.3 percent higher than the stock's Thursday closing price of LTL 11.96 a share. The Vilnius-based clothes retailer posted a pre-tax profit of LTL 30 million for 2007, falling a million litas short of its profit forecast. Donatas Uzkurelis, an analyst with Hansabankas' financial markets service, said that the company's failure to meet its profit targets "was the biggest disappointment of last year." Apranga's operations and expansion plans are focused on the three Baltic countries, which are currently experiencing economic imbalances, such as high inflation, and are facing a possible economic slowdown, Hansabank Markets said in the report.

Stumbras aims to pay dividents
Stumbras, the largest Lithuania's spirits producer controlled by MG Baltic concern, aims to pay out LTL 32 million, i.e. LTL 0.8 per share, in dividends for 2007. The shareholders will vote on a respective proposal from the board at the general meeting due on March 31. Stumbras reported LTL 16.82 million in sales for the first two months of this year, down 3.3 percent year-on-year. Last year the net profit of the distillery soared by 64.8 percent, to LTL 32.767 million, from LTL 19.886 million a year earlier. Full-year sales surged by 65 percent, to LTL 168.511 million, exceeding the forecasts by 16.4 percent.

Grigiskes reports figures
Grigiskes, the largest manufacturer of hardboard and toilet paper in Lithuania, reported on Friday consolidated sales of LTL 26.94 million for the first two months of this year, a rise of 22.6 percent from a year earlier. However, the group's pre-tax profit for the reporting period fell by 18.4 percent to LTL 0.99 million, Grigiskes said. In February alone, the group's pre-tax profit slumped by 43.6 percent year-on-year to around LTL 300,000. Its monthly sales were up 17.9 percent to LTL 12.73 million. Grigiskes posted LTL 6.5 million in consolidated pre-tax profits for the full year 2007, down by almost 10 percent compared with 2006. Annual sales increased by 20 percent to LTL 144 million, but still fell 9.4 percent short of forecasts.

Friday, 21st of March

Consumer prices should grow over March
Consumer prices should grow by 0.8 percent in Lithuania over March, the country's Statistics Department projects. The annual inflation, meanwhile, would hit 11.2 percent. The department noted an increase in all consumer prices, in particular those of fuel, tobacco, restaurants and hotels, foodstuffs and clothes, in March. In February, harmonized annual inflation in Lithuania totalled 10.9 percent and the twelve-month average was 6.9 percent. Consumer prices increased by 1.2 percent versus January.

Ryanair is angry with AirBaltic
In a sign of a price war among air carriers in Lithuania, Ireland's budget airline Ryanair has blasted Latvia's Airbaltic for raising what it called the "rip-off" fuel surcharge. "Ryanair remains the only airline which promises not to impose fuel surcharges even if the fuel price hits USD 200 per barrel. Airbaltic is ripping off passengers with its fuel surcharge," said Wilhelm Hamilton, Ryanair's manager for Northern Europe, said in a statement on Thursday. The Irish airline operates flights to Lithuania's second-biggest city of Kaunas. Airbaltic increased its fares earlier this month, citing rising fuel costs. The fuel surcharge per one-way ticket now is LTL 17 if purchased online and LTL 31 if purchased from a travel agency.
Verslo Zinios

Pieno Zvaigzde will pay dividents
The board of Pieno Zvaigzdes, one of the largest dairy producers in Lithuania, has proposed to pay LTL 12 million i.e. 22.5 cents per share, in dividends for 2007. Moreover, the shareholders' meeting due on Apr. 24 will also vote on a proposal to form a LTL 6 million reserve for stock buyback and a LTL 0.6 million reserve for assistance, charity and bonuses. The board has also proposed to pay LTL 0.2 million in bonuses for its members. Pieno Zvaigzdes seeks to buy back up to 10 percent of own shares so as to stabilize the stock price, boost stock liquidity and avoid losses due to potential decline in stock price.
Verslo Zinios

Thursday, 20th of March

FlyLAL Group prepares for IPO in Warsaw bourse
Aviation Assets Management, the aircraft-leasing subsidiary of the Lithuanian aviation group FlyLAL Group, has changed its status to a public limited company as it prepares to float its shares on the Warsaw Stock Exchange (WSE). The company expects to complete preparations for an initial public offering on the Warsaw bourse the end of this year. "We see great growth potential in the aviation market. The market's demand for aircraft today is considerably higher than we can supply. Therefore, we will use part of the IPO proceeds to expand our aircraft fleet. This is the reason why we reorganizing the company and preparing for the public share offering," said Linas Dovydenas, the CEO of FlyLAL Group Services.
Verslo Zinios

Lithuanian and Czech cooperation
Lithuanian and Czech prime ministers have declared their goal of rallying Central European nations for energy safety and international condemnation of crimes committed by totalitarian Communist regimes. The two officials stressed the necessity of developing nuclear energy - one of the most realistic alternatives to traditional energy resources, thus combating global warming. Kirkilas informed his colleague about construction of a new nuclear power plant and electricity links to Poland and Sweden, as well as economic and energy problems that Lithuania and the rest of the region would encounter after decommissioning of the Ignalina Nuclear Power Plant in 2009. In his words, Lithuania will continue consultations with the European Commission (EC) and concerned EU countries on the matter. Kirkilas also met with the representatives of CEZ, the energy company in Czech Republic. Kirkilas and the CEZ officials agreed that the Lithuanian energy companies and CEZ should cooperate in future and exchange different information while implementing projects.

Vilnius is the cheapest capital in the Baltic States
The cheapest capital in the Baltic States is Vilnius, while Tallinn is considered to be the most expensive. Such data was presented by the Swiss bank UBS. Vilnius was on the 58th place among 71 world cities, according to the rating of UBS, while Riga was on the 48th and Tallinn of the 43rd. UBS compares the prices for 112 different goods and services, excluding housing prices, in different countries and then rates the countries. Oslo, Copenhagen and London are the most expensive cities in the world, while Kuala Lumpur, Buenos Ares and Mumbai are the cheapest.
Lietuvos Rytas, Verslo Zinios

Wednesday, 19th of March

Snoras will pay out LTL 30 million in dividents
Lithuanian bank Snoras will pay out LTL 30 million in dividends to shareholders for 2007, or LTL 0.12 per ordinary share and LTL 1 per preference share. Snoras' shareholders approved the dividend payment at their general meeting on Tuesday, the bank said in a press release. The shareholders also decided to pay a total of LTL 700,000 as remuneration to the management and supervisory boards. Russian businessman Vladimir Antonov owned 68.95 percent of Snoras at the end of last year and Raimondas Baranauskas, the Lithuanian bank's president, held a 25.10 percent stake.
Verslo Zinios

Unemployment in Lithuania made up 4.3 percent last year
Unemployment in Lithuania made up 4.3 percent last year with 69,000 jobless registered, the Statistics Department reported on Tuesday citing the data of the latest population employment survey. Unemployment among the youth aged 15-24 made 17 percent of all the unemployed people in the reporting period. The unemployment rate in Lithuania was the lowest among the other Baltic States last year. There were 1,534 million of employed residents in Lithuania last year; it was by 35 thousand more than in 2006.
Lietuvos Rytas, Respublika

Aggregate pre-tax profit earnings of Lithuania's companies grow
The aggregate pre-tax earnings of Lithuania's companies soared by 1.7 times, year-on-year, to LTL 16 billion in 2007, the country's Statistics Department reported on Tuesday. The pre-tax earnings of business services and trade companies surged more than twofold versus 2006, while the pre-tax profit of construction, transport and industrial companies increased by more than a third. Corporate profit margin average edged up to 8.8 percent, from 6.2 percent in 2006. The revenues of construction and business services companies rose by more than a third, transport and trade companies - by more than one-fourth.
Lietuvos Rytas, Respublika

Tuesday, 18th of March

Largest hotel in Kaunas
The four-star Reval Hotel Neris, the largest hotel in Lithuania's second-biggest city of Kaunas, has reopened for business after a year-and-a-half renovation that cost around LTL 45 million. The renovation of the hotel, formerly known as the Takioji Neris, was carried out by YIT Kausta, one of the country's largest construction and commercial property development companies. "We reconstructed all interior spaces and engineering systems of the building," Virgilijus Jagurevicius, YIT Kausta's contracting director, said in a press release. The renovation increased the number of rooms to 208 from 184 rooms. The hotel also has a restaurant and a bar, as well as eight conference halls of different sizes.
Kauno Diena, Respublika, Verslo Zinios

Agrowill Group launches IPO
Agrowill Group, Lithuania's largest agricultural investment company, on Monday launched its initial public offering on the Vilnius Stock Exchange (VSE), expecting to raise around LTL 32 million in net proceeds for investment in business growth.
The IPO closes on Mar. 27. The price range is LTL 4.5 to 5.5 per share. The offering is open to retail investors in Lithuania and to all institutional investors outside the United States. Agrowill Group said on Saturday that it had applied for conditional listing of its shares on the blue-chip Main List of the VSE. If the IPO is successful, trading in the company's shares is planned to begin on April 2.
Respublika, Verslo Zinios

Unnamed Spanish company eager to build plant in Vilnius
An unnamed Spanish building materials producer is reportedly eager to build a 12 million euros plant in Vilnius. The company is already looking for employees who would arrange the construction of the plant and would work thereat thereafter. The workforce of the plant should be around 50. Ramir Sanchez, a commercial attache of the embassy of Spain in Lithuania, said that the intentions of the Spanish company were serious. Yet, he would not name the company. "The company is currently looking for investors that could finance the construction of the plant. However, those have not been approved as yet, thus we are not disclosing any more information about that company," Sanchez said. He noted though that the company would wish to launch the construction this year.
Lietuvos Rytas

Monday, 17th of March

Maxima Bulgaria opens new stores
Maxima Bulgarija, the Bulgarian subsidiary of Baltic retail giant Maxima Group, opened four new stores in Sofia in March. Two discount stores T-Market were opened on Friday, March 14, while other two stores opened the doors during last fortnight. The overall area of those stores exceeds 400 square meters, Maxima Group said in a statement. The group would open 16 new T-Market stores in Bulgaria later this year; the statement quoted Gintaras Marcinkevicius, Maxima Group CEO, as saying. The chain would also enter other Bulgarian towns, including Veliko Turnovo, Kostenets, etc. The retail group currently runs 21 T-Market stores in Bulgaria, including 14 in Sofia. The Lithuanian retailer opened its first Maxima stores in Bulgaria back in 2005.

Currency in circulation in Lithuania rises Currency in circulation in Lithuania rose by LTL 68.8 million in February versus January, to reach LTL 8.7 billion, the central bank reported on Friday.
The Bank of Lithuania's external assets shrank by LTL 1.8 billion over the month, to LTL 16 billion, as a result of transactions. External liabilities narrowed by LTL 935.6 million, to LTL 347.9 million, the central bank said. Month-on-month, residents' deposits with the Bank of Lithuania declined by LTL 999.3 million, to LTL 5.7 billion, as a result of transactions, while the central government deposits plunged by LTL 985.1 million, to LTL 2.6 billion.

Invalda sells 100 percent of Valmeda
Lithuania's investment company Invalda has sold 100 percent of Valmeda, the operator of two hotels, to the hotels subsidiary of London-based Triangle Group for LTL 68.5 million. The enterprise value of hotels business, which also includes its net debt, totals LTL 86.3 million, Invalda has said in a statement. The sale of Valmeda, which runs Holiday Inn Vilnius and Ecotel Vilnius hotels, was closed on Thursday. Meanwhile, Metin Guvener, a co-founder of Triangle Group, praised the Baltic region, in particular Lithuania, which offered solid investment opportunities.

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