Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 44.2008

Friday, 31st of October

Consumer confidence index falls
The consumer confidence index plunged to -35 points in Lithuania in October, hitting a new record low since monthly records began in May 2001. The index plunged by 9 points in October versus September, and the monthly decline was the largest in the index' history, the Statistics Department said on Thursday. The previous record of -33 points was registered in May 2001, when the confidence survey was launched. The department attributed the decline to worsened expectations of Lithuania's economic outlook with more people expecting the number of jobless to grow and the economic situation to deteriorate in the upcoming 12-month period. The proportion of those anticipating a rise in unemployment soared to 70 percent, from 10 percent a year ago. The proportion of the polled who expected the national economy to weaken in 12 months to come increased to 64 percent, from 32 percent a year earlier.
Lietuvos Zinios

Lottery operators post figures
Lithuanian lottery operators posted LTL 75 million in combined sales revenue for the first nine months of this year, up 20 percent from LTL 62.63 million a year ago, the State Gaming Control Commission reported on Thursday. Their total lottery ticket sales for the first three quarters rose by 16 percent to 37.31 million. In the second quarter, the annual growth rate was 14.7 percent to 11.54 million tickets. The total amount of money paid out to lottery winners in January-September increased by 25.3 percent year-on-year to LTL 39.93 million.
Verslo Zinios

Siauliu Bank plans issuing new shares
Lithuania's Siauliu Bankas, which is controlled by the European Bank for Reconstruction and Development (EBRD) and a group of local investors, plans a new share issue worth LTL 20 million, to be sold only to existing shareholders as of November 25 at a price not lower than LTL 1 a share. Siauliu Bankas' management board will ask shareholders to approve the proposed new share issue on November 11, the bank said. The bank's shares traded for LTL 1.17 on the Vilnius Stock Exchange (VSE) on Thursday. The new share issue would increase the bank's share capital to LTL 200.357 million.
Verslo Zinios

Thursday, 30th of October

Lithuanian commercial banks post figures
Lithuanian commercial banks posted LTL 884.5 million in aggregate profits for the first nine months of this year, up 9 percent from LTL 811.5 million a year ago, the central bank reported on Wednesday. The banking system's profits for the third quarter alone came in at LTL 235.5 million. However, the number of loss-making banks increased. Two domestic banks and four foreign bank branches ended the first three quarters of this year in the red, while in the first half, there were only two such banks. The banks that posted losses for January-September included Finasta and Parex, and the branches of Balti Investeeringute Grupi Pank, of MP Investment Bank, of Allied Irish Banks and of Danske Bank.  Although the banking system's profit continued to rise in January-September, almost all banks recorded a significant slowdown in profit growth, and three banks and three foreign bank branches posted worse performance results than in the same period a year ago, the Bank of Lithuania said. 
Lietuvos Zinios, Respublika, Verslo Zinios, Lietuvos Rytas

Central government’s deficit is LTL 892.3 million
The Lithuanian central government's deficit totalled LTL 892.3 million in the first nine months of this year, accounting for 0.8 percent of this year's projected GDP, the Finance Ministry reported on Wednesday. In September alone, the central government's surplus came in at LTL 761.3 million, or 0.7 percent of GDP, it said. 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.
Respublika, Verslo Zinios, Lietuvos Rytas

Power distribution company RST reports numbers
Lithuania's power distribution company Rytu Skirstomieji Tinklai (RST), a subsidiary of national investor company Leo LT, reported LTL 47.7 million in losses for the first nine months of this year. Nine-month operating revenues, meanwhile, rose by 14.8 percent, year-on-year, to LTL 877.8 million. The group linked the losses with the maintenance of the Ignalina Nuclear Power Plant (INPP) in the third quarter, which boosted the costs of electricity purchase. The average price of electricity purchased by RST from generators soared by almost 60 percent in the third quarter compared with April-June, Arvydas Zakalskis, RST CFO, said in a statement. 
Verslo Zinios, Lietuvos Rytas

Wednesday, 29th of October

Finhill recommends buying Agrowill Group shares
Lithuania's financial brokerage firm Finhill has issued a Buy recommendation on shares in Agrowill Group, the country's largest agricultural investment company, with a target price of LTL 6.54 per share. Finhill said the Buy recommendation was based on an analysis of Agrowill Group's future cash flows, as well as its business prospects, rapid expansion policy and ongoing modernization of agricultural machinery.  Finhill forecasts that Agrowill Group will post a 64.6 percent increase in annual revenue for 2008 to LTL 70.3 million following the acquisition of two modern agricultural firms, Polva Agro and Gruduva, by the group this year. However, the brokerage expects that Agrowill Group's net profit margin for 2008 will reach only 13 percent and its net profit will be LTL 9.2 million, up 88.6 percent compared with 2007, due to increased financial expenses resulting from the company's share and bond offerings and acquisitions.
Verslo Zinios

Next year’s budget is announced
Finance Minister Rimantas Sadzius has presented Lithuania's 2009 budget bill to the incumbent parliament on Tuesday. "This budget is quite good as an initial starting point," he said. The minister said to know nothing about "mysterious experts" who had estimated that the authorities could save LTL 2 billion in budget funds if the tax breaks were eliminated. The savings with VAT breaks annulled could reach LTL 520 million, Sadzius said. The minister admitted that the revenues on profit tax would decline in 2009. "The year 2008 is less profitable than the year 2007, and the year 2009 will be even less profitable," he said. The bill produced by the incumbent leftist government stipulates that the budget expenditures will exceed the revenues by LTL 2.64 billion next year, and the fiscal deficit will come close to 3 percent of gross domestic product (GDP). The budget bill will be debated and approved by new ruling majority. Newly elected parliament will convene for its first sitting in mid-November.
Respublika, Lietuvos Rytas, Verslo Zinios

Invalda presents figures
Financial sector companies controlled by Lithuania's investment group Invalda ended the first three quarters of this year LTL 14.7 million in the red. Invalda's financial sector operations posted LTL 18.5 million in net profits for the same period last year. The financial brokerage company Finasta posted a loss of LTL 8.8 million for January-September, versus a profit of LTL 3.9 million a year ago. Invalda Turto Valdymas (Invalda Asset Management) ended the nine months with a loss of LTL 5 million, compared with a profit of LTL 14.6 million a year ago, while Finasta Imoniu Finansai (Finasta Corporate Finance) saw its profit increase to LTL 1.1 million from LTL 0.5 million. The investment bank Finasta, which was established earlier this year, posted a loss of LTL 0.8 million for the reporting period.
Verslo Zinios
Tuesday, 28th of October

Snaige reports figures
Snaige, the owner of refrigerator factories in Lithuania and the Russian exclave of Kaliningrad, reported on Monday LTL 5.3 million in consolidated losses for first nine months of this year, up from losses of LTL 189,100 a year ago. The group's revenue for January-September fell by 8.1 percent year-on-year to LTL 279 million. In the third quarter alone, Snaige posted LTL 3.3 million in consolidated pre-tax profits, more than a three-fold increase from LTL 968,000 in the same period last year. Year-on-year, consolidated EBITDA for the nine months declined by 26.4 percent to LTL 13.4 million, but EBIDTA for the third quarter alone rose by 29 percent to LTL 9 million.
Verslo Zinios

Leading banks in Lithuania
Lithuania's two biggest commercial banks, Hansabankas and SEB, remain the leading electronic banking services providers in the country this year, according to a report published by the consulting firm Metasite Business Solutions on Monday. Hansabankas ranks first in Lithuania both in attracting new customers and in retaining existing ones. SEB is in second position, based on these criteria. Danske Bank moved up one notch to the number-three position in this year's ranking. Nordea jumped to fourth place, from eighth place last year, thanks to its excellent scores in the areas of banking clarity, convenience and customer service responsiveness, despite a lower functionality, Metasite Business Solutions said.
Verslo Zinios

FlyLAL pays its debts
Lithuania's flagship carrier FlyLAL-Lithuanian Airlines has settled payments with Riga airport and seeks to turn back its Saab 2000 aircraft held up in Riga on Sunday morning. Some 40,000 euros were transferred to Riga airport on Monday, FlyLAL-Lithuanian Airlines CEO Vytautas Kaikaris confirmed. "FlyLAL pilots left to Riga to fly the aircraft back. It should land in Vilnius on Monday night," he said. FlyLAL's plane was held up in Riga on Sunday morning. The aircraft was to carry three passengers from Riga to Vilnius on the last summer season flight of the company. In the opinion of FlyLAL-Lithuanian Airlines executives, Riga airport held the aircraft up in revenge for the Lithuanian company's request to the court to seize some LTL 200 million worth of assets of Latvia's air carrier Airbaltic and Riga airport.
Lietuvos Rytas, Respublika, Kauno Diena

 Monday, 27th of October

New tugboat in Klaipeda port
A tugboat of Klaipedos Juru Kroviniu Kompanija (Klaipeda Stevedoring Company, or Klasco), the largest stevedoring company in the port of Klaipeda controlled by Achemos Grupe (Achema Group), reached the Lithuanian port on Friday. The vessel, which arrived to Klaipeda from the port of St. Petersburg, is one of two tugboats, which Klasco ordered at a Russian shipyard a year ago. The stevedoring company allocated LTL 35 million for the building of two vessels. The second tugboat should reach the port of Klaipeda in the summer of 2010. New tugboats would improve Klasco's competitiveness and would ensure better compliance with the port's requirements, Valentinas Greiciunas, Klasco CEO, said in a statement.
Lietuvos Zinios

Incident with flyLAL in Riga
The flyLAL plane, which has to fly to Vilnius on Sunday morning, was sustained in Riga airport for debts. Martin Langrat, representative of Riga airport, stated that the captain of the plane was given the documents where it was noted that flyLAL had debts for Riga airport, moreover, it was stated that the plane would be detained until the debt was paid. Langrat admitted that such decision to sustain a plane was an extreme one, but it was the only way to deal with the situation. He refused to reveal the amount of the debt, but said that the amount was very big. The daily Respublika reminds that the Vilnius Regional Court satisfied a request of flyLAL-Lithuanian Airlines on September 25 and seized LTL 199.83 million worth of assets of Latvia's air carrier Airbaltic and Riga airport. flyLAL-Lithuanian Airlines claims to have sustained damages of close to LTL 200 million due to favourable conditions extended by Riga Airport to Airbaltic, which, as a result, is able to offer lower prices thus gaining unfair competitive advantage.
Respublika, Verslo Zinios, Lietuvos Rytas, Kauno Diena, Lietuvos Zinios

New arena in Panevezys
The universal sports arena, where not only sport games but also different concerts and entertainment activities will take place, was officially opened in Panevezys on Friday. The new arena is the only in the Baltic States which has the cycling track which meets all the global standards. About 5,600 of viewers will be able to watch basketball games and up to 7,000 of people will be able to come to concerts and entertainment events. It is expected that about 150,000 of people will visit the arena per year. The arena was built by the company Panevezio Statybos Trestas, LTL 108 million was invested into the arena.
Verslo Zinios

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