Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 14.2008

Saturday, 5th of April

Lithuania's average monthly household income increased
Lithuania's average monthly house Color hold income increased by 26.2 percent last year to LTL 859 per capita, according to a household budget survey published by the Statistics Department on Friday. However, real income (adjusted for inflation) grew by 19.4 percent. Household income in urban areas rose by 29.3 percent to LTL 943, while in rural areas the growth was 18.3 percent to LTL 691. Per capita monthly household consumption expenditure increased by LTL 97, or 14.9 percent, over the year to LTL 749. More than one third of this amount was spent on food and cafe and restaurant services. Monetary expenditure reached LTL 685, accounting for 91 percent of the total expenditure.

Sugar production
Lithuania sugar producers sold 22.13 thousand tons of white sugar during three months of this year. 16.37 thousand tons from the mentioned quantity was sold to Lithuanian consumers, while 5.76 thousand tons were sold to the EU countries. According to the data of the Ministry of Agriculture, sugar sales decreased by 8.4 percent this year with the same period last year. Retail sugar price for one kilogram is LTL 3.24.

Forecasts for Lithuania
The analyst of the financial group Nordea warns that even worse times are coming to Lithuania in future. The senior analyst in Nordea Markets Roger Wesseman thinks that the Central Bank of Europe is not going to decrease the base interests rates this year. The expert notes that food prices are also going to increase due to the growing consumption. Wessman claims that the economic situation in Lithuania is not bad comparing it with Latvia or Estonia, he adds that increasing export is quite a positive thing in Lithuania. The analyst states that the possible crisis in Lithuania may be influenced by the falling prices on real estate and the decreasing number of people wishing to take housing loans.
Lietuvos Rytas, Respublika

Friday, 4th of April

Negotiations about Ignalina Nuclear Power Plant
Lithuania and the European Commission are not competitors and will try to find common ways to extend the lifespan of the Ignalina Nuclear Power Plant (INPP), Lithuanian Radio quoted the government's special negotiator with Brussels as saying.
Aleksandas Abisala, a former prime minister, said he understood the Commission's position, but added that there was a way of putting off the closure date without violating the agreement. "We are in the same boat. The best solution for both sides would be a slow switch-off of the second block of the Ignalina Nuclear Power Plant," the negotiator was quoted as saying. Abisala and Prime Minister Gediminas Kirkilas meet in Vilnius on Thursday with Dominique Ristori, the deputy head of the Commission's Directorate-General for Energy and Transport.
Respublika, Kauno Diena

Problems for BIG Bank
The Lithuanian Competition Council launched on Thursday an investigation into whether or not BIG Bank's advertising slogan claiming that its services offer "the fastest way to money" mislead consumers. BIG Bank is the Lithuanian branch of Estonia's consumer loan bank Baltic Investeeringute Grupi Pank (BIG). The probe follows a complaint from BIG Bank's competitor, General Financing, saying that the advertising could be misleading. General Financing provides a consumer credit service under the brand name of Kreditas 123.
Kauno Diena, Respublika

Net profit of Lithuanian Mint
The net profit of Lithuanian Mint soared by 26.6 times, to LTL 1.338 million in 2007, from LTL 50,300 a year earlier. Full-year revenues increased by 2.5 times, to LTL 15.3 million, from LTL 6.2 million in 2006. The board of the Bank of Lithuania has already approved the 2007 financial statement of the Lithuanian Mint, as audited by Ernst&Young Baltic.
Lietuvos Rytas

Thursday, 3rd of April

FlyLAL takes AirBaltic position
Lithuania's flagship carrier FlyLAL-Lithuanian Airlines overtook Latvia's Airbaltic, its key rival, in terms of passenger numbers at the Vilnius International Airport for the first time in two years in March. FlyLAL-Lithuanian Airlines held a 33.5 percent share of passenger traffic at the airport last month, Arunas Marcinkevicius, the airport's spokesman, said on Wednesday. The share of Airbaltic, meanwhile, made up 32.8 percent of the total flow in March.
Respublika, Kauno Diena, Lietuvos Rytas

Eika reports figures
Lithuania's real estate developer Eika reported LTL 207.7 million in consolidated turnover for full 2007, a surge of 43.8 percent versus the year-earlier figure of LTL 144.4 million. The figure includes revenues on the construction and rent of commercial and residential real estate, mediation, consulting and other real estate development activities, Eika has said in a statement. The group includes real estate development company Eika, construction company Eikos Statyba and engineering company Inzinerines Idejos.
Verslo Zinios

New profit tax rate offered
Lithuania's Social Democratic Party proposes to raise the corporate profit tax rate to 19 percent from the current 15 percent in a bid to boost state revenues and increase the share of GDP redistributed through the budget. Four Social Democratic parliamentarians have registered a draft amendment to the Profit Tax Law calling for introducing a 19 percent tax rate on corporate profits next year. The chairman of the parliament's Audit Committee, Donatas Jankauskas, said that he was sceptical of the idea of increasing the profit tax. "We must do something about taxes as a whole, rather than tackling one tax," the Conservative MP said. The profit tax was effectively increased to 19 percent in 2006 by imposing an additional levy of 4 percent on corporate profits, the so-called social tax. The additional tax was scrapped early this year.
Respublika, Lietuvos Rytas, Verslo Zinios

Wednesday, 2nd of April

Lithuania's Vilkyskiai Dairy's announcement
Lithuania's Vilkyskiu Pienine (Vilkyskiai Dairy) said on Tuesday it had raised LTL 14.04 million in a new share offering aimed at financing the acquisition of Kelmes Pienine (Kelme Dairy). Vilkyskiu Pienine said it had sold the new shares at LTL 5.4 a share. Finasta Investiciju Valdymas (Finasta Investment Management) bought 1.015 million shares, businessman Linas Strelis bought 1.015 million shares and SEB funds bought 560,000 shares, it said. The new issue has increased Vilkyskiu Pienine's authorized share capital to LTL 11.943 million.
Kauno Diena, Respublika

Apranga's results
Apranga group, the operator of the largest Baltic clothes retail chain controlled by MG Baltic concern, posted LTL 121.5 million in sales for the first three months of 2008, a surge of 32.4 percent versus the year-earlier figure. In March alone, the sales of the group rose by 8.4 percent, year-on-year, to LTL 37.8 million. "The growth rate, which was relatively small compared with March 2007, resulted on slow sales of spring and summer collections due to cool March weather," Apranga said in a statement. In Lithuania, the sales of the group rose by 32.8 percent in January-March 2008. In Latvia and Estonia, the chain boosted the sales by 36 percent and 21.4 percent, respectively.
Lietuvos Rytas, Verslo Zinios

City Service won a tender
City Service, the largest Baltic real estate maintenance company controlled by Lithuania's Rubicon Group, has won a tender of Latvia's state-owned energy utility Latvenergo and expects the facility management agreement with a subsidiary of that company to add about LTL 6.7 million to its annual revenues. Riga City Service, a subsidiary of City Service, has won a tender on the maintenance of facilities and territory of Sadales Tikls, the distribution grid operator controlled by Latvenergo, and has already signed a three-year facility management agreement with that company.

Tuesday, 1st of April

FlyLAL launches new flights
Lithuania's flagship carrier FlyLAL-Lithuanian Airlines has launched flights from Riga on Monday, March 31, and expects to carry about 90,000 Latvia's residents in a year. The Lithuanian carrier offers flights from Riga to 14 European cities via Vilnius. Regular flights from Riga, Tallinn and Vilnius and ample supply of frequent flights in eastward and westward directions would give the company a strong competitive advantage on the Baltic market, Tadas Puksta, the carrier's CEO, said in a statement. FlyLAL-Lithuanian Airlines expects to carry 1 million passengers this year, twice more compared with 2007.

Surplus of Lithuanian central government budget made LTL 100.6 million
The surplus of Lithuanian central government budget made up LTL 100.6 million in the first two months of 2008, accounting for 0.1 percent of this year's projected gross domestic product (GDP), the Finance Ministry reported on Monday. Two-month revenues of the central government sector made up LTL 5.13 billion. Expenditures amounted to LTL 4.872 billion, and transactions in non-financial assets to LTL 158.2 million in the reporting period. In February alone, the sector's deficit made up LTL 414.4 million. Monthly revenues totalled LTL 2.434 billion, expenditures - LTL 2.767 billion and transactions in non-financial assets - LTL 81.4 million.
Lietuvos Rytas

Stumbras will pay dividends
Stumbras, Lithuania's largest strong alcoholic beverage producer, will pay out LTL 32 million in dividends to shareholders for 2007, or LTL 0.80 per share. Stumbras' shareholders approved the dividend payment at their general meeting on Monday, the company reported to the Vilnius Stock Exchange. The Kaunas-based beverage producer posted a 64.8 percent rise in net profit for 2007. Annual sales soared by 65 percent to LTL 168.511 million, exceeding its sales goal by 16.4 percent.
Verslo Zinios

Monday, 31st of March

Remittances from Lithuanian nationals abroad soar by 44 percent
Remittances from Lithuanian nationals abroad soared by almost 44 percent in 2007, to LTL 2.9 billion, which is equal to 3 percent of gross domestic product (GDP). The World Bank said in conclusions of its 2006 study on migration and remittances that money sent by emigrants might comprise some 5 percent of all household expenditures in Lithuania. The exact amount of remittances is unknown yet it might be twice as large compared with the amount transferred through banks. The amounts brought to Lithuania in cash or sent in other ways might be even larger. The total known amount of remittances last year was way larger compared with the assistance, which Lithuania obtained from the European Union (EU) funds.
Lietuvos Zinios

DnB Nord bank agreed about dividends
Lithuania's DnB Nord Bankas, which reported LTL 107.9 million in audited net profit for full 2007, will forgo dividends for last year and will boost its stock capital by LTL 227.307 million, to LTL 591million, from its own resources and through additional capital contributions by shareholders, The shareholders' meeting has distributed a total of LTL 160.54 million in profit, of which LTL 152.5 million will be used for the issue of free shares to existing shareholders, LTL 8.03 million will be transferred to mandatory reserves and LTL 126,000 will be paid to council members as bonuses.

Lithuanians' gross domestic product grew by 8.8 percent
Lithuania's gross domestic product grew by 8.8 percent in 2007 compared with 2006, while in the fourth quarter alone the national economy expanded by 8 percent, year-on-year, the country's Statistics Department reported on Friday citing the latest GDP estimations. The latest GDP growth estimate is unchanged from the figures published late in February. However, the full-year GDP estimate at current prices was reduced to LTL 96.74 billion from LTL 96.773 million, and the figure for the fourth quarter alone was cut to LTL 27.224 billion, from LTL 27.257 million. The department also revised the growth rates in different sectors.
Verslo Zinios

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