Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 22.2008

Saturday, 31st of May

Central government deficit is presented
The Lithuanian central government deficit totaled LTL 385.1 million in the first four months of this year, accounting for 0.3 percent of projected 2008 GDP, the Finance Ministry reported on Friday. Four-month revenues of the sector made up LTL 10.312 billion, expenditures – LTL 10.262 billion and transactions with non-financial assets – LTL 435.3 million. The central government sector covers the state budget, social security funds and extra-budgetary funds, as well as the State Property Fund and the Property Bank. The extra-budgetary funds include the Privatization Fund, the Guarantee Fund, the Reserve (Stabilization) Fund, the Ignalina Nuclear Power Station Decommissioning Fund, the 1990 Blockade Fund and the Savings Restitution Account.

Apranga is in red
Apranga group, the operator of the largest Baltic clothes retail chain controlled by MG Baltic concern, reported LTL 821,000 in unaudited net losses for the first quarter of this year, staging an impressive turnaround versus the year-earlier net profit of LTL 4.469 million. The losses of Apranga alone made up LTL 1.856 million in January-March, down from the net profit of LTL 1.125 million in the first quarter of 2007, the group said in a quarterly statement. The revenues of the group, meanwhile, soared by 29.4 percent, year-on-year, to LTL 100.479 million, and Apranga alone raised the revenues by 23.1 percent, to LTL 58.041 million. The first quarter results traditionally relied on March performance, which was poor this year due to cold weather and dominating negative trends on the consumption market, the group said in a statement.

Tez Tour presents figures
Turkish-owned international tour operator Tez Tour said on Friday that its sales revenue in Lithuania for the first four months of this year doubled to LTL 51 million from LTL 24 million a year earlier. Tez Tour and its subsidiary, Travelman, sold 26,000 travel packages during the four months, up from 12,000 in the same period last year. The tour operator has offices in Turkey, Spain, Egypt, Cuba, Dominica, Thailand, Lithuania, Latvia and other countries.

Friday, 30th of May

Construction prices jump up
Construction prices in Lithuania jumped by 11.9 percent in April compared with the same period a year ago, the Statistics Department reported on Thursday.
Construction costs edged up by 0.3 percent in April versus March. Some 1.5 percent rise in the per-hour cost of construction equipment operation and 0.7 percent increase in the prices of construction materials and products had the biggest impact on construction prices month-on-month, the department said.
Respublika, Lietuvos Rytas, Verslo Zinios

Ratings of Lithuania
Standard & Poor's has placed its rating on Lithuania's electricity transmission system operator Lietuvos Energija (Lithuanian Energy) on a negative watch status, the energy company said on Thursday. In order to take the company off the watch list, the ratings agency has to analyze the financial position of the whole Leo LT group, it said. Standard & Poor's affirmed its A- long-term foreign currency rating on Lietuvos Energija. Leo LT, a recently established energy holding company, this week took over the state-owned shares in Lietuvos Energija and in the power distribution company Rytu Skirstomieji Tinklai (RST). NDX Energija, a privately-owned company, contributed its stake in the distribution grid operator VST.

Gross domestic product rises
Lithuania's gross domestic product (GDP) rose by 6.9 percent, year-on-year, to LTL 23.979 billion in the first quarter of 2008, the Statistics Department reported on Thursday revising up its previous growth estimate of 6.4 percent. The biggest upward revision came from construction and services sectors, the department said. In the first quarter, the growth of added value was the fastest in the construction sector - at 12.3 percent. In the trade, hotels and restaurants, transport and communications groups the added value increased by 9.6 percent, financial mediation, real estate and other business group - 7.5 percent. The added value in manufacturing and energy, and non-market services rose by 5.6 percent and 3.5 percent, respectively. In agriculture, the added value edged up by 0.3 percent.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Thursday, 29th of May

Alita posted losses
Alita, the largest Lithuania's alcohol producer, posted LTL 10.3 million in losses for the first three months of this year, which largely resulted on investments into a brewery in Serbia. Consolidated sales, however, soared by 40 percent, year-on-year, to LTL 40.9 million, the group said in a statement. The losses largely resulted on investments into Beogradska Industrija Piva brewery in Belgrade. Operating losses came in at LTL 2.2 million in January-March. Alita's net profit totalled LTL 1.6 million in the first quarter of 2007. Last year the consolidated net profit of the group declined by 2.3 times, year-on-year, to LTL 7.899 million, as the sales rose by 38 percent, to LTL 197.95 million.

Viciunai reports sales
Viciunai, a Lithuanian multi-business group comprised of 29 companies, reported on Wednesday sales of LTL 1.35 billion for the full year 2007. "At the start of this year, the Viciunai Group set itself a goal of becoming a global food industry brand. In the Baltic countries, our goal is to become the best food brand," said Visvaldas Matijosaitis, the group's majority shareholder and chairman. "Vici is already the most recognizable brand of fish products in each of the Baltic countries, which gives us much hope and many possibilities," he said. The group has an annual output of 100,000 tons of food products and exports its production to 38 countries. France is the group's number-one export market in Western Europe, generating 44 percent of the total sales. Russia accounts for 52 percent of the group's total exports to Eastern Europe. The biggest export markets in Central Europe are Poland (25 percent) and Serbia (18 percent).
Verslo Zinios, Lietuvos Rytas

Retail sales rise in Lithuania
Lithuania's retail sales rose by 20 percent in the first four months of this year from a year earlier to LTL 11.755 billion the Statistics Department reported on Wednesday. In April overall retail sales climbed by an annual 19.7 percent to LTL 3.14 billion. Month-on-month, the increase was 3.8 percent. In the four months year-on-year, food retailers boosted their aggregate turnover by 7.4 percent and non-food retailers, excluding the automotive sector, recorded a 21.4 percent increase.
Lietuvos Rytas

Wednesday, 28th of May

Average monthly gross salary rose
The average monthly gross salary in Lithuania rose by 23.8 percent in the first three months of 2008 versus the year-earlier, to reach LTL 2,151.3 the Statistics Department reported on Tuesday. The average net monthly salary grew by 26.3 percent year-on-year, to LTL 1,650.6, Real wages in the entire economy (excluding sole proprietorships) increased by 14.2 percent from a year earlier. The growth rates in the public and private sectors were 13.6 percent and 14.6 percent, respectively. The average salary in the private sector continued to grow at a faster rate than in the public sector.
Verslo Zinios, Lietuvos Rytas

Reso Europa is bought
Latvia's insurance company Gjensidige Baltic has apparently completed the acquisition of a 100 percent stake in the Lithuanian non-life insurance firm Reso Europa in a deal worth LTL 60.424 million. According to data from the Lithuanian Central Securities Depository, the shares in Reso Europa have changed hands for LTL 23.12 a share. Gjensidige Baltic has obtained all the required regulatory approvals in Lithuania and Latvia to purchase Reso Europa. Until recently, Reso Europa was indirectly owned by Reso Garantia, one of the largest Russian insurance companies. Reso Garantia acquired 100 percent of shares in Reso Europa, which then operated under the name of Snoro Garantas, for LTL 6.579 million in late 2003. Later, the Lithuanian company repeatedly changed owners, but all of them were associated with the Reso group.
Verslo Zinios

Axis Technologies will build a plant in Latvia
Axis Technologies, a subsidiary of Axis Industries, the industry and energy projects company controlled by Lithuania's Rubicon Group, will build a cogeneration plant in Jelgava, Latvia. The company has been named the winner of a tender announced by Jelgava's heating grids operator Fortum Jelgava and has become the general contractor in a LTL 24 million worth project. "We won a tender in Jelgava three months ago. Now we are working on the design of the cogeneration plant and making arrangements for the launch of construction," Remigijus Baltrusaitis, Axis Industries CEO, said in a statement. The plant should be built by December, he added. The plant, which will supply electricity and thermal energy to Jelgava, will be built at the site of existing Jelgava boiler house, which will be expanded and reconstructed. The cogeneration plant will operate a 4 MW power plant and a 8 MW water heating boiler.
Verslo Zinios, Respublika

Tuesday, 27th of May

Lithuanian Gas posts figures
Lietuvos Dujos (Lithuanian Gas), Lithuania's natural gas imports and distribution company controlled by Germany's E.ON and Russia's Gazprom, posted LTL 63.7 million in consolidated unaudited pre-tax profit for the first three months of this year, down 27.2 percent versus the year-earlier figure of LTL 87.5 million. The net profit shrank by 25.7 percent, to LTL 53.7 million, from LTL 72.3 million in January-March 2007, the company said in a statement. The company's EBITDA declined by LTL 25.5 million, year-on-year, to LTL 86.4 million. The revenues, meanwhile, soared by 53.4 percent, to LTL 503.9 million, from LTL 328.4 million in the first quarter of last year.
Lietuvos Rytas, Respublika

Salaries would be cut first
If Lithuania was hit by a recession, Lithuania's companies would first cut the expenses on salaries, bonuses and advertising, an executive poll commissioned by public relations agency Baltijos Komunikacijos Partneriai and conducted by the market researcher TNS Gallup in April has shown. About 30 percent of the polled would cut personnel costs (salaries, bonuses), while 29 percent would reduce advertising budget if the company was hit by the effects of economic recession. About 24 percent of the polled would cut their public relations expenses. About 24 percent would lay off some employees, 16 percent would reduce the marketing budget and 14 percent - the IT or IT solutions budget. TNS Gallup polled 100 mid-scale and large companies executives on April 11-17.
Verslo Zinios, Lietuvos ZInios

City Service posted profit
City Service, the Baltics' leading property maintenance and management services provider, posted on Monday LTL 3.1 million in consolidated net profits for the first quarter of this year, up 48 percent from LTL 2.1 million a year earlier. First-quarter consolidated revenue surged by 45 percent year-on-year to LTL 54 million, City Service reported to the Vilnius Stock Exchange (VSE). The parent company alone recorded a 4.3 percent decline in first-quarter net profit to LTL 2.2 million, although revenue increased by 35.4 percent to LTL 36.7 million. The group's Baltic operations generated LTL 2.5 million in net profits, unchanged from a year ago, and LTL 45.6 million in revenue, a rise of 52 percent.
Verslo Zinios

Monday, 26th of May

Fermentas International may enter bourse in future
Canadian-registered Fermentas International, the owner of the Lithuanian biotechnology company Fermentas, may float its shares on a stock exchange in the future. Fermentas Chairman Viktoras Butkus said that Fermentas International has made a strategic decision to go public, but added that this process is in "a zero stage" at the moment. "It is too early to speak about that, but there is a strategic decision. Of course, Fermentas International, the owner, would go public, not Fermentas itself," he said. Representatives of Fermentas and several Lithuanian biotechnology companies this week visited the London Stock Exchange (LSE) and received information on floating a biotech company on the stock market. However, Butkus said that if the company decided to list its shares on a stock exchange that would not be the LSE.
Verslo Zinios

Grigiskes factory reported figures
Grigiskes, the only manufacturer of hardboard and toilet paper in the Baltics, reported on Friday consolidated sales of over LTL 52.9 million for the first four months of this year, a rise of 18.6 percent from a year earlier. The group's consolidated pre-tax profit for the four months came in at one million litas, Grigiskes said in a statement to the Vilnius Stock Exchange (VSE). The consolidated results include those of Grigiskes subsidiary, Baltwood. On Thursday, Grigiskes registered its increased share capital of LTL 60 million with the Register of Legal Entities. The company's shareholders last month approved a share capital increase of LTL 20.043 million through a bonus issue from retained earnings.
Verslo Zinios

Anyksciai Wine reported pre-tax loss
Lithuania's alcoholic drink producer Anyksciu Vynas (Anyksciai Wine) reported on Friday a pre-tax loss of LTL 783,000 for the first quarter of this year, versus a pre-tax profit of LTL 42,000 in the same period a year ago. First-quarter sales revenue slumped down by 24.6 percent year-on-year to LTL 7.76 million, the company said. It attributed the fall in revenue to a decline in concentrated apple juice, cider and vodka sales. Anyksciu Vynas is projecting a pre-tax profit of LTL 1.5 million for the full year 2008, on revenue of LTL 50 million. Alita, one of the country's leading alcoholic beverage producers, owns a 94.9 percent stake in Anyksciu Vynas, which is based in Anyksciai, in eastern Lithuania.
Verslo Zinios

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