Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 13.2008

Saturday, 29th of March

Issues about Leo LT
The establishment of Leo LT, the national investor company, is neither cost effective nor in the national interest of Lithuania. Moreover, it raises concerns about the government's motives, the Economist Intelligence Unit (EIU), the research unit of The Economist Group, believes. The measures taken by the governing parties in order to implement this project and force into silence the critics, who were accused of going against the national interest, are reminiscent of the Soviet era, the EIU says in its evaluation of Leo LT. The desire of the government and NDX Energija, a private equity company controlled by VP Grupe, to suppress debate over the deal suggests that they are well aware it does not stand up to scrutiny, the EIU believes. One possible reason for the government's acquiescence in a process that clearly favours VP's interests over those of the Lithuanian taxpayers relates to the approach of the parliamentary election in October. The ruling Social Democratic party may be hoping that an informal alliance with VP would give it the resources it needs to offset its weakness by spending heavily on the election campaign. The EIU analysts also assert that the energy sector consolidation pressed through by the government goes against the European Commission's push towards energy-sector unbundling.
Kauno Diena, Lietuvos Rytas, Respublika

Predictions about Lithuanian economy
The analysts of SEB Bankas, the largest Lithuania's commercial bank, have raised Lithuania's inflation forecasts for 2008 and 2009 although left the projections of country's GDP growth unchanged. Lithuania's economy will grow by 6.5 percent this year while in 2009 the growth will slow down to 6 percent, the bank projects in its latest Lithuanian Macroeconomic Review. Harmonized twelve-month inflation average should reach 8.5 percent and 7 percent in 2008 and 2009, respectively. Late in December the analysts of the bank projected that the harmonized twelve-month inflation average would total 6.5 percent in 2008 and would go down to 5 percent a year later. The analysts of the bank have admitted in the latest review that the annual inflation, which crossed the 10 percent threshold earlier this year, might persist above that level in the first half of this year. Government's efforts to tame inflation have been pure "imitation", and actual measures to control the growth of prices had to be taken at least a year ago, the review says.

Lithuania's consumer confidence index falls
Lithuania's consumer confidence index slid to minus 6 points in March, from minus 4 points in February, the Statistics Depart Color ment reported on Friday. The index declined as a result of worsened expectations of Lithuania's economic development with less people expecting the economy to grow and unemployment to decline in the upcoming 12-month period. Moreover, people were less optimistic as to their possibilities to save any money in the upcoming year. In urban territories, the consumer confidence index declined by 2 points, while in rural areas the indicator slid by 3 points in March versus February. Compared with March 2007, the consumer confidence index plunged by 15 percentage points, largely as a result of worsened expectations as to Lithuania's economic outlook.

Friday, 28th of March

Problems for Baltikums Draudimas
The Vilnius Regional Court's decision to open bankruptcy proceedings against the Latvian-owned non-life insurance company Baltikums Draudimas (Baltikums Insurance) took effect on Thursday. That means that all non-life insurance policies issued by Baltikums Draudimas, with the exception of motor third-party liability insurance (MTPL) policies, cease to be valid, the country's Insurance Supervisory Commission (ISC) said. Baltikums Draudimas' MTPL policies will cease to be valid in 30 days, unless they expire earlier in accordance with their terms, it said.
Respublika, Lietuvos Rytas

Ukio bank will pay dividends
Lithuania's Ukio Bankas, part of Ukio Banko Investicine Grupe (Ukio Bank Investment Group, or UBIG), will pay out LTL 3.934 million i.e. LTL 0.02 per share, in dividends for 2007. Moreover, the shareholders backed the board's proposal to boost the bank's authorized capital to LTL 216.708 million through the LTL 20 million issue of new shares each with a face value of LTL 1 and the minimum sale price of LTL 1, the representatives of small shareholders who attended the general meeting said. The bank, which reported LTL 47.4 million in audited net profit for 2006, paid LTL 1.767 million in dividends last year. Then the bank also boosted its authorized capital by LTL 20 million.
Verslo Zinios

The amount Lithuanians spent abroad
Lithuanian residents spent a total of LTL 2.9 billion in foreign countries in 2007, up 13.1 percent versus the year-earlier, the country's Statistics Department reported on Thursday citing preliminary estimations. However, the number of Lithuanian residents travelling abroad declined by 9 percent, year-on-year, to 1.3 million. Some 970,700 residents took domestic trips with at least one overnight stay last year, up 2.2 percent versus 2006. Their spending soared by 31.7 percent from 2006, to LTL 420.5 million. The spending of Lithuania's residents travelling abroad for holidays and on business made up LTL 1.95 billion and LTL 960.3 million, respectively, last year. The average spending abroad made up LTL 1,800, while the average trip duration was 7 overnight stays.
Lietuvos Rytas

Thursday, 27th of March

Lithuania's current account deficit widens
Lithuania's current account deficit widened by 50.4 percent last year compared with a year earlier, to LTL 13.2 billion and accounted for 13.7 percent of GDP, the Bank of Lithuania reported on Wednesday. The rise was largely the result of increase in foreign trade and income deficits. In the fourth quarter alone, the current account deficit made up LTL 3.3 billion, or 12 percent of GDP. Compared with October-December 2006, the deficit rose by LTL 519.2 million, or 18.9 percent.

Kalnapilio-Tauro Group presents figures
Lithuania's second-largest brewery Kalnapilio-Tauro Grupe (Kalnapilis-Tauras Group), which is owned by Denmark's Royal Unibrew, said on Wednesday that revenue for 2007 rose by 29.2 percent from a year earlier to LTL 213.3 million. The company's pre-tax profit, including gains from the sale of real estate in Vilnius, came in at LTL 77 million. Operating pre-tax profit was LTL 19.6 million, Kalnapilio-Tauro Grupe CEO Valdas Tekorius told reporters. Tekorius said that the company is targeting a 16.1 percent rise in revenue for 2008 to LTL 247.6 million.
Verslo Zinios

The largest monthly wages exceeded LTL 230,000 in 2007
The largest monthly wages of a salaried employee exceeded LTL 230,000 in Lithuania in 2007, the data of the State Tax Inspectorate (VMI) reports. Last year the largest wages were paid to an executive of a public company. The total wages of that person (including all his work places) made up LTL 2.76 million in 2007. The second largest average wages made up some LTL 226,000 per month in Lithuania last year. The third biggest earner was paid almost LTL 201,000 per month on average. In 2006 the largest annual wages of a salaried employee made up LTL 2.47 million in Lithuania, in 2005 - LTL 1.7 million.

Wednesday, 26th of March

Lithuanian Energy intends to pay dividends
Lithuania's power transmission grid operator Lietuvos Energija (Lithuanian Energy) intends to pay a dividend of 2.93 Lithuanian cents per share to shareholders for 2007, with a total of LTL 20.2 million to be set aside for this purpose. Lietuvos Energija said on Friday that it would submit the dividend proposal for approval to its shareholder meeting to be held on April 29.
Verslo Zinios

Klaipeda Stevedorign Company will also pay dividends
Klaipedos Juru Kroviniu Kompanija (Klaipeda Stevedoring Company, or Klasco), the largest operator at the Lithuanian port of Klaipeda, will pay LTL 23 million or almost LTL 1.815 per share, in dividends for 2007. The company paid LTL 23.75 million or LTL 1.87 per share in dividends for full 2006. Shareholders approved a respective proposal from the board at the general meeting on Friday, the company said in a statement to the Vilnius Stock Exchange (VSE).
Verslo Zinios

Travelling habits of Lithuanians
The residents of Lithuania travelled more last year, but they chose trips by trains less often. According to the data of the Statistics Department, there were 471.75 million of passengers carried by all kinds of transportation means in 2007; it was by 3.7 percent more than a year before. The majority of passengers (98.2 percent) travelled by road transportation, while there were 1.1 percent travelling by trains, 0.2 percent travelling by air transportation and 0.2 percent carried by sea transportation. The biggest number of travellers arrived to or from the Great Britain (14.8 percent), to Germany (11.0 percent), to Denmark (9.7 percent) and to Egypt (9.4 percent).
Lietuvos Rytas

Tuesday, 15th of March

Easter Holidays.

Monday, 14th of March

Easter Holidays.

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