Lithuania Business News: Archive 2003-
Saturday, 25th of October
Svyturys-Utenos Alus presents figures
Svyturys-Utenos Alus, the largest Lithuanian brewery controlled by Denmark's Carlsberg group, exported 2.4 million litres of beer in the first nine months of this year, up 30 percent from the year-earlier figure of 1.84 million litres. Exports to Russia posted the steepest increase as the sales in that country quadrupled in the reporting period, the company said in a statement. Moreover, the company boosted sales in Ireland and Poland considerably. "We do not implement any active marketing campaigns on foreign markets, thus the rise in sales of Svyturys and Utenos beer is the result of its quality, which is praised by the experts of those countries who then recommend the consumers to choose those products," the statement quoted Rolandas Virsilas, Svyturys-Utenos Alus CEO, as saying. The most popular brands of Svyturys and Utenos are currently exported to 23 countries worldwide.
New head for Leo LT
Gintautas Mazeika said on Friday that one of the first things on his agenda as the new CEO of Lithuania's national energy company Leo LT will be to meet with the new government and the head of the price regulatory authority. "I believe that this [new] management board is a very competent and strong one. I have not come for a short time. This board has very serious work to do, and our aim is to build up a strong team. For me, this post is not a goal in itself," Mazeika told reporters. Mazeika, previously the chairman and CEO of the power distribution grid operator Rytu Skirstomieji Tinklai (RST), spoke after his appointment as chairman of the management board and chief executive officer of Leo LT. The new CEO of Leo LT said that the situation in the energy sector is difficult and is unlikely to improve much in the near future. Mazeika, who has been in the energy industry only for several months, said that he intends to meet with Virgilijus Poderys, the chairman of the National Commission for Prices and Energy, next week and with the new government as soon as it is appointed.
Respublika, Lietuvos Zinios, Lietuvos Rytas, Kauno Diena
Prices for gasoline
The price of gasoline at the pump in Lithuania this week slipped below EUR 1, a mark it passed at the start of this year. The price of 95 gasoline, the most popular grade in Lithuania, fell by 2.5 percent in Statoil gas stations in Vilnius in a week’s period, while the price of diesel decreased by 1.9 percent, the prices fell by 6 percent and 2.8 percent respectively in Riga, while the price for fuel dropped by 3.6 percent and by 3 percent for diesel in Estonia. Fuel and diesel are the cheapest in Estonia, while fuel is the most expensive in Lithuania; in the meantime, diesel costs almost the same in Lithuania and Latvia.
Friday, 24th of October
Stumbras plans suspending production in winter
Stumbras, Lithuania's largest spirits producer, intends to suspend production during Christmas as a result of sales drop and resume the manufacturing on January 5. The suspension of production will be the first since the company's privatization back in 2003. "The main reason of the company's decision to suspend the production is a decline of sales, which has been rather pronounced since the raising of spirits excise duties early in 2008. In September Stumbras' sales plunged by more than 20 percent compared with the same period a year ago," Algirdas Ciburys, Stumbras' marketing director, said in a statement. Earlier this year the spirits producer laid off almost one-fifth of its workforce, which now totals approximately 300.
Lietuvos Rytas, Kauno Diena, Verslo Zinios, Respublika
Projections of the Bank of Lithuania
The Bank of Lithuania has revised down its forecasts for the growth of country's gross domestic product (GDP) and inflation projections. The forecast of 2008 harmonized annual average inflation has been trimmed to 11.6 percent, from 11.8 percent projected in July. Its forecast of 2009 inflation rate has been lowered to 6.9 percent, from 7.8 percent anticipated before. Lithuania's GDP will expand by 4.2 percent this year and 1.2 percent in 2009. In July the central bank projected that the country's economy would grow by 6 percent and further 4.2 percent in 2009. The unemployment rate is seen growing to 7.9 percent (6 pct - July forecast) in 2009, from 5.4 percent this year (5.5 pct - July forecast). The average growth of wages will slow down to 3.5 percent in 2009 (5.7 pct - July forecast), from 21.6 percent this year (18 pct - July forecast). The current account deficit will reach 13 percent of GDP this year (13.5 pct - July forecast) and will decline to 6.2 percent next year (10.8 pct - July forecast). The central bank sees the growth of exports slowing down to 3.8 percent in 2009 (8.7 pct - July forecast), from 12.3 percent forecast for 2008 (10.4 pct - July forecast). Imports should rise by 12 percent this year (14.4 pct - July forecast) and should shrink by 4.5 percent next year (4.9 pct growth forecast in July).
Verslo Zinios, Lietuvos Rytas
Figures of Swedbank and SEB bank
Hansabankas, the Lithuanian bank owned by the Scandinavian financial group Swedbank, reported on Thursday LTL 332.6 million in consolidated net profits for the first nine months of this year, up 12 percent from LTL 297.2 million a year ago. The bank posted an 87 percent rise in profits for the first nine months of last year. Hansabankas' top executives said in a press conference on Thursday that the bank's consolidated assets rose by 16.4 percent during the nine months of last year to LTL 26.1 billion, compared with a 47.2 percent growth rate in the same period last year.
SEB Group's assets in Lithuania reached LTL 29.8 billion at the end of September, a rise of 16.2 percent compared with the same period a year ago, SEB Bank said on Thursday. SEB Bank, Lithuania's largest bank, and its subsidiaries reported LTL 320.9 million in net profits for the first nine months of this year, up 2.4 percent from a year ago. The bank alone posted a net profit of LTL 342 million, up 5.9 percent, including LTL 58.6 million in dividends from distributed profits of the group's companies.
Respublika, Lietuvos Rytas, Verslo Zinios
Thursday, 23rd of October
FlyLAL and airBaltic continue to argue
A court dispute between the Lithuanian aviation business group FlyLAL on one side and the Latvian airline Airbaltic and Riga Airport on the other is getting bogged down in legal maneuvering. FlyLAL, which has secured a court order to freeze almost LTL 200 million worth of assets of its Latvian rival and the airport, said on Wednesday that Airbaltic had filed a complaint against the bailiff's actions in Lithuania and thus slowed down the process. The Lithuanian company said Airbaltic could be asked to pay for such actions. "We have the right to demand compensation for additional losses during the entire period of litigation," FlyLAL Chairman Gediminas Ziemelis said in a press release on Wednesday. "As a result of incompetent actions by the management of Airbaltic and their personal ambitions, the damage, if ordered to be paid by the court, would most probably be covered at the expense of socially vulnerable groups, such as Latvian pensioners and teachers," he said. Judge Sarunas Rackauskas of the Vilnius Regional Court said that the Latvian companies, which have appealed against the court's order to freeze the assets, demanded that certain documents be translated into Latvian, which is also slowing down the court proceedings.
Lietuvos Rytas, Respublika
More flights offered by flyLAL
FlyLAL-Lithuanian Airlines, the largest locally owned air carrier, has added Tbilisi and Milan to its list of flight destinations in the upcoming winter season. "We believe that tourist and business trips to Italy are important for Lithuania's residents. Flights to Georgian have also proved successful and, therefore, we are resuming this route," FlyLAL CEO Vytautas Kaikaris said in a press release on Tuesday. The airline will also offer direct flights from Vilnius to Amsterdam, Budapest, Frankfurt, Kiev, London, Madrid, Moscow, Paris, Rome and Istanbul during its winter season, which will start on October 26 and will end on March 29, 2009.
Lithuanian absorbed 91 percent of the EU structural aid
Lithuania has absorbed 91 percent of the EU's structural aid made available to it under 2004-2006 programs, the Finance Ministry reported on Wednesday. Some LTL 2.815 billion has been paid out to project implementers and contractors, it said. The rate of EU funds absorption this year is at its highest level since 2004, reaching a monthly average of LTL 93 million in the first nine months of the year. This compares with LTL 81 million in 2007, LTL 53 million in 2006, LTL 21 million in 2005 and LTL 5.5 million in 2004. Lithuania was allocated a total of LTL 3.091 billion from the Structural Funds for the three-year period. Dec. 31, 2008 is a deadline for using the funds.
Wednesday, 22nd of October
Snoras aims to bolster capital base via a private placement
Lithuania's commercial bank Snoras aims to bolster capital base via a private placement of LTL 120 million in debt securities without a fixed term. In line with preliminary agreements, the new issue would be partly subscribed by Vladimir Antonov, the bank's key shareholder, Snoras said in a statement. New debt papers will not be entered into the trading lists of any stock exchanges. "We will issue debt securities, which have no fixed term and will be included into the capital, for the first time on domestic market. The bank aims to scale up its capital base and its financial capacities, it would further strengthen the grounds for the expansion of the bank's activities," the statement quoted Snoras' president Raimondas Baranauskas as saying.
Lithuanian Energy reports figures
The group of Lietuvos Energija (Lithuanian Energy), Lithuania's electricity transmission system operator controlled by the national energy company Leo LT, reported LTL 69.1 million in unaudited consolidated net profit for the first nine months of this year, up 77.6 percent versus the year-earlier figure of LTL 38.9 million. Nine-month turnover rose by 32.1 percent, to LTL 1.183 billion, from LTL 897.2 million in January-September 2007, Lietuvos Energija said in a statement. In the third quarter alone, the net profit of the group totalled LTL 7.9 million, up 54.9 percent year-on-year but down 43.2 percent compared with the second quarter of this year. "The decline of net profit in the third quarter was of seasonal nature - lower consumption of electricity during the summer and maintenance of Ignalina Nuclear Power Plant (INPP)," the statement quoted Lietuvos Energija board member Rimantas Sukys as saying.
Respublika, Verslo Zinios
No future for Ignalina Nuclear Power Plant
After statements about the higher probability of agreeing with the European Union (EU) on the extension of operations of the Ignalina Nuclear Power Plant (INPP) a month ago, the government's negotiator Aleksandras Abisala maintains that the probability was now hanging by a thread. "As Abisala has already said, the extension issue is now hanging by a thread. It has decreased because the statement by (the European Commission's President Jose Manuel) Barroso was rather tough," chairman of the Lithuanian parliamentary Foreign Affairs Committee, Justinas Karosas, told journalists on Tuesday after the committee's joint meeting with the European Affairs Committee. In Karosas' words, postponement of the Ignalina closure is too dangerous for the EU "due to the start of renaissance of nuclear power facilities in the EU." "Our reactor is old-fashioned. If something happened, it would discredit the idea of nuclear power plants in the eyes of the EU, which would be devastating," said the head of the parliamentary committee. He described the promise made during the last week's meeting of the European Council in Brussels to draft an energy rescue plan for the Baltic States before the end of the year as a positive step. "It is my belief that the implementation of the plan will be started during Sweden's EU presidency next year," said Karosas.
Tuesday, 21st of October
FlyLAL will carry the President
Lithuania's flagship carrier FlyLAL-Lithuanian Airlines has won a tender on rendering services to President Valdas Adamkus for a period of one year. The President's Office would cooperate with the carrier from Nov. 2008 till Nov. 2009, the company said in a statement. The company was technically ready to carry President to any required destination, the statement quoted FlyLAL CEO Vytautas Kaikaris as saying. Moreover, the carrier had staff with the required training. Last year a similar tender was won by Vilnius aviation services intermediary company Aeroservisas, which owns no aircraft. Meanwhile, FlyLAL-Lithuanian Airlines operates a fleet of Boeings 737-300, Boeings 737-500, Saabs 2000 and two Boeing 757-200.
Kauno Diena, Verslo Zinios
Lithuanian Gas intends to raise prices
Lietuvos Dujos (Lithuanian Gas), Lithuania's gas imports and transportation company controlled by Russia's Gazprom and Germany's E.ON, has asked the National Control Commission for Prices and Energy to raise the ceiling prices of natural gas transportation from 2009, which would result in an increase of prices for end consumers. A much larger rise in gas prices will result on Gazprom's decision to raise the prices of natural gas for Lithuania. "The price of gas would soar by 60 percent for households if compared with today's price and import rate with the transportation price added," Renatas Pocius, head of gas unit of the panel told the news broadcast. The prices of natural gas would only grow by some 4-5 percent after the increase of transportation rates, he added. However, Gazprom asked for almost LTL 1,300 per 1,000 cubic meters of natural gas in September as against slightly more than LTL 800 a year ago.
Lietuvos Rytas, Respublika, Lietuvos Zinios, Verslo Zinios
Discussions about Sodra
Lithuanian Prime Minister Gediminas Kirkilas and representatives of trade unions on Monday failed to reach a final agreement on the rate of employees' contribution to the social insurance fund (Sodra). It was announced after the meeting, which lasted for almost two hours, that the negotiations would continue. Social Security and Labor Minister Vilija Blinkeviciute said that the Tripartite Council, which brings together representatives of the government, employers and trade unions, on Tuesday would not take a decision regarding the government's proposal to increase the rate from the current 3 percent to 4 percent of salary. Employers and trade unions do not support the proposal. Monday's meeting between Kirkilas and trade unions' representatives was held at the Prime Minister's initiative.
Kauno Diena, Lietuvos Rytas
Monday, 20th of October
Snoras presents figures
Lithuania's commercial bank Snoras posted LTL 18.358 million in unaudited net profit for the first nine months of this year, down 1.9 times versus the year-earlier figure. As of early October, the assets of the bank totalled LTL 5.9 billion, up 18 percent year-on-year. The loan portfolio soared by 66 percent, to LTL 3.5 billion during the 12-month period. Snoras' shareholders equity increased by 8 percent, to LTL 493 million. The portfolio of residential deposits, as compared with October 1, 2007, rose by 34 percent, to LTL 3 billion. Total deposit portfolio exceeded LTL 4.3 billion as of late September 2008 (up 19 pct year-on-year).
Will be spent more on the country’s defence next year
The next year's defence spending in Lithuania is projected to total at LTL 1.556 billion, indicating a rise by LTL 56.5 million year-on-year. The bulk of the spending - almost LTL 1.216 billion - is intended for defence-related programs carried out by the Defence Ministry, with over LTL 340 million proposed to defence programs of other institutions. Lithuania has received repeated critical remarks from NATO over insufficient defence spending. Despite of the signing of an agreement by all parliamentary parties a few years ago to keep defence spending at 2 percent of the gross domestic product (GDP), the actual expenditure now stands at 1.15-1.2 percent of the GDP. Lithuania joined NATO in the spring of 2004.
The EU support is being used suitably
According to the European Commission's (EC) data, some 91 percent or a little bit more than LTL 1 billion of structural assistance funds envisaged for Lithuania in 2004-2006 were paid to the country as of September 10. The Lithuanian Business Support Agency supervises 333 public energetic, business and business environment improvement, and public tourism projects currently. The head of the agency, Saulius Jakstas, notes that 260 of these projects have already been finished, while the remaining 73 projects are also finishing their activities. The total amount of the EU support administered by the agency stands at LTL 1,104 billion.
Back to Baltic Business Monitor