Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 18.2008

Saturday, 3rd of May

The operator of the western part of Lithuania's national power grid reports numbers
The operator of the western part of Lithuania's national power grid, reported LTL 23.7 million in net profit for the first three months of this year, up 37 percent versus the year-earlier figure of LTL 17.3 million, the company said in a statement to the Vilnius Stock Exchange (VSE). In 2007 the audited net profit of the company totalled LTL 67.244 million. VST, controlled by private-equity NDX Energija, is quoted on the secondaries list of VSE.

Rokiskis Cheese group is in red
Rokiskio Suris (Rokiskis Cheese) Group, the leading Lithuania's dairy group, reported LTL 9.492 million in losses for the first three months of this year, down from the consolidated profit of LTL 3.514 million in January-March 2007. Three-month sales shrank by 3.6 percent, to LTL 138.865 million, from LTL 144.044 million a year earlier, the company said in a statement. The company attributed the losses to a plunge in the prices of products channeled for exports, lower demand and some 50 percent surge in the prices of raw milk. In March alone, the sales of the group edged down by 0.85 percent, year-on-year, to LTL 47.86 million.

New SEB department in Lithuania
SEB group plans to transfer a part of its operations implemented in Sweden to Vilnius; it will open a new department in Vilnius in autumn. Ausra Matuseviciene, director of Financial Department in SEB bank, Notes that after a part of operations are transferred to Lithuania, SEB group will be able to work more effectively and decrease the expenditures of the new department in Vilnius. It is planned that there will be about 70 employees in the new department at the beginning. SEB group in Lithuania earned LTL 94 million of net profit during the first quarter of the year, it is by 4.5 percent more than a year ago.

Friday, 2nd of May

Taz Tour presents figures
Turkish-owned international tour operator Tez Tour said on Wednesday that its first-quarter sales revenue in Lithuania more than doubled to LTL 39.2 million up from LTL 17.7 million a year earlier. Monthly sales in March more than doubled to LTL 16.5 million, the company said. "The revenue growth reflects a rapid increase in traveler numbers," Martynas Laivys, the head of Tez Tour's Lithuanian operations, said in a press release. The company said its traveler numbers in Lithuania more than doubled in the first quarter of this year from a year earlier to nearly 20,000 people.

Predictions of the Bank of Lithuania
The Bank of Lithuania said on Wednesday that it has lowered its GDP growth forecast for this year to 6.6 percent, and for next year to 3.9 percent. The central bank forecast in January that the economy would expand by 8.1 percent in 2008 and that growth would decelerate to 5.7 percent in 2009. The bank also revised up its average annual inflation forecast for 2008 to 9.8 percent from 7.9 percent. It now expects inflation to ease to 6.3 percent next year, which is up from its previous forecast of 4.9 percent.
Lietuvos Rytas, Respublika

Consumer confidence index falls
Lithuania's consumer confidence index slid to minus 10 points in April, from minus 6 points in March, the Statistics Department reported on Tuesday.
The index declined as a result of worsened expectations of Lithuania's economic development with more people expecting the economic situation to deteriorate and the number of jobless to grow in the upcoming 12-month period. Moreover, people were less optimistic as to their possibilities to save any money in the upcoming year and projected a deterioration in the financial standing of their household. Compared with April 2007, the consumer confidence index plunged by 19 percentage points, largely as a result of worsened perception of the country's economic situation.

Thursday, 1st of May

State Holiday

Wednesday, 30th of April

Invalda reports losses
Financial sector companies controlled by Lithuania's investment group Invalda on Tuesday posted LTL 3.9 million in aggregate losses for the first quarter of this year, compared with LTL 9.7 million in profits a year ago. Aggregate revenue for the first quarter slumped down to LTL 5.4 million from LTL 19.3 million in the same period last year. "The results of many financial sector companies both in the Baltic region and worldwide were adversely affected by the stock market turmoil which began last August. It had a negative effect on Invalda's financial sector operations as well," Finasta Director Sarunas Nedzinskas said in a press release.
Respublika, Verslo Zinios

Vilkyskiai Dairy buys Kelmes Dairy
Vilkyskiu Pienine (Vilkyskiai Dairy), one of the most technologically advanced dairy producers in Lithuania, on Monday completed the acquisition of 99.09 percent of shares in Kelmes Pienine (Kelme Dairy). "Another strong company with growth potential has been added to the Vilkyskiu Pienine Group. We expect both companies to post even better results due to the synergy effect," Vilkyskiu Pienine CEO Gintaras Bertasius said in a press release on Tuesday. The group now consists of four companies, including Vilkyskiu Pienine, Modest, Kelmes Pienine and Kelmes Pieno Centras. Vilkyskiu Pienine started its expansion with the acquisition of a majority stake in Modest in 2006. The company then added Mozzarella cheese to its product line.
Lietuvos Rytas

Leo LT is almost established
Authorized public officers and representatives of private-equity NDX Energija have signed the documents on the establishment of Leo LT, the national investor company, at the Economy Ministry on Tuesday. The documents signed include the founding agreement, the shareholders' agreement and draft by-laws. Leo LT shall implement key energy projects, including the construction of new nuclear power plant in cooperation with the Baltic partners and Poland, and building of power links with Poland and Sweden.
Verslo Zinios, Lietuvos Zinios, Kauno Diena, Respublika, Lietuvos Rytas

Tuesday, 29th of April

Gross domestic product grows
Lithuania's gross domestic product grew by 6.4 percent in the first quarter of this year compared with a year earlier, the Statistics Department reported on Monday. The department's flash estimate showed GDP in current prices totaled LTL 23.802 billion. This is the lowest GDP growth rate since the third quarter of 2006 when the economy expanded by 6.3 percent. The GDP growth was driven by strong performances in the manufacturing industry due to increased mineral product production, as well as in construction, wholesale and retail trade, transport, warehousing and communications, and real estate, according to the report. GDP per capita in the first quarter rose by 6.7 percent year-on-year to LTL 7,071. For the full year 2007, the country's economic growth was 8.8 percent.
Kauno Diena, Respublika, Lietuvos Zinios, Verslo Zinios

Axis Industires reports revenues
Lithuania's industry and energy project group Axis Industries reported on Monday a 45 percent rise in revenue for the full year 2007 to LTL 225 million up from LTL 156 million in 2006. Axis Industries CEO Remigijus Baltrusaitis said in a press release that the strongest growth was in revenue from the construction sector, up almost threefold to nearly LTL 71 million. Revenue from thermal engineering product sales and services amounted to LTL 58 million, from industrial automation project and equipment sales to LTL 47 million, from bio fuel boiler-house and equipment sales to LTL 25 million, and from electrical engineering operations to LTL 13.5 million. Baltrusaitis said that the group's export revenue for 2007 totaled LTL 13 million. Latvia was its biggest export market, accounting for LTL 4.4 million of the total revenue.

Retail sales rise
Lithuania's retail sales rose by 20.1 percent in the first quarter of this year from a year earlier to LTL 8.616 billion preliminary data from the Statistics Department showed on Monday. Food retailers boosted their aggregate turnover by 9 percent and non-food retailers, excluding the automotive sector, recorded a 20.8 percent increase in sales. Textile, clothing and footwear retailers posted the sharpest rise in sales, at 33.1 percent. The aggregate turnover of restaurants, bars and other catering establishments increased by 10.6 percent over the reporting period to LTL 243.2 million. In March compared with February, total retail sales went up by 5.2 percent to LTL 3.01 billion.
Lietuvos Zinios

Monday, 28th of April

Discussions about Druzhba pipeline
Lithuanian Prime Minister Gediminas Kirkilas and president of Russia's leading oil company Lukoil Vagit Alekperov discussed Friday possibilities of resuming oil supply via the Druzhba pipeline. This topic was of prevalence in the meeting, the governmental press service said. Kirkilas accentuated that the pipeline's dormancy since July of 2006 deprived of profit not just the Lithuanian oil company Mazeikiu Nafta (Mazeikiai Oil), but also Russia's oil exporters, as Lithuania's oil import export terminal Butinge is one of the most economically attractive routes for export of Russian oil. Kirkilas and Alekperov also exchanged opinions regarding topicalities of the oil and gas industry as well as developmental trends and possibilities of collaboration in the oil sector. The Lithuanian prime minister emphasized that regardless of the fire incident in Mazeikiai Oil in 2006, the single oil-refinery in the Baltic region is operating successfully and reaped profit in 2007.
Respublika, Kauno Diena

Panevezio Statybos Trestas will distribute dividends
Panevezio Statybos Trestas (PST), one of Lithuania's leading construction companies, will distribute LTL 3.761 million in dividends from its 2007 profits, or LTL 0.23 per share. PST shareholders approved the dividend payout at their general meeting on Friday, the company reported to the Vilnius Stock Exchange (VSE). The shareholders distributed a total of LTL 48.196 million in profits. Some LTL 326,00 was set aside for remuneration to the supervisory board members and employee bonuses, as well as for other purposes. Another LTL 44.109 million was carried over to the next financial year. The shareholders also appointed Irma Abramaviciene as a new member of the management board.

Prices of natural gas may rise
The prices of natural gas for Lithuania may rise again in May, giving an additional impetus for further increase in domestic prices of gas and heating, the news service of public broadcaster LTV reports. "Last month the prices of gas at the border made up some USD 380 [per 1,000 cubic meters]. According to our projections, those prices will reach some USD 400 next month," Danas Janulionis, a member of Control Commission for Prices and Energy, said. Meanwhile, Prime Minister Gediminas Kirkilas claims there is not much the government could do in such circumstances. "What do you propose - to stop buying gas? We are looking for various options. That is why we have made a strategic decision to build a liquefied natural gas terminal. There is no competition when there is only one gas supplier," PM said. The Commission warned, meanwhile, that the rise in heating prices might be more pronounced next heating season than announced by some heating providers, which seek to raise the prices by about 30 percent in the majority of towns, and by as much as 55 percent in Vilnius.
Lietuvos Zinios

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