Lithuania Business News: Archive 2003-
Saturday, 27th of December
State borrows money
The Lithuanian Finance Ministry said on Wednesday that it has recently borrowed almost LTL 600 million from unnamed foreign commercial banks, adding that the latest borrowing transactions with a certain foreign bank were concluded last week. Since these borrowing transactions were non-public transactions, their details are not disclosed, the ministry said in a press release. The agreements with foreign commercial banks provide for borrowing both this year and at the start of next year. Domestically, the government is borrowing funds both by issuing government securities and through non-public borrowing transactions. The volumes of these transactions are not high, the ministry said. The borrowed funds are being used to meet the state budget spending needs, it said.
Lietuvos Rytas, Respublika
Problems with flyLAL
Vilnius International Airport (VIA) has threatened to stop serving passengers of FAL-Lithuanian Airlines, which owes it around LTL 20 million, starting next month. "If FlyLAL-Lithuanian Airlines continues to renege on its obligations, Vilnius Airport will be providing no services to this company starting January 1, 2009," the airport said in a statement on Wednesday. FlyLAL CEO Vytautas Kaikaris refused to comment on the situation, saying that he had not yet read the letter from the airport. "Throughout the year 2008, VIA has been fulfilling its contractual obligations to FlyLAL-Lithuanian Airlines. However, [the airline] has not paid for the services rendered in August and subsequent months," the airport said. The airport also claims that FlyLAL has not paid millions of litas in departing passenger fees since August.
Kauno Diena, Respublika, Lietuvos Rytas
New prices on electricty
The Ministry of Economy has informed that the Ministry of Economy appealed to the LEO LT, asking to oblige stock company’s Lietuvos Energija, VST and Rytų Skirstomieji Tinklai to revise formerly confirmed tariffs of electricity transmission, distribution service and the tariffs of end-users prices and submit these tariffs to the National Control Commission for Prices and Energy for publishing. In recalculation of prices for the year 2009, The Ministry of Economy for the year 2009 suggests to leave the same prices of electricity transmission and distribution as they were in the year 2008. According to this, the ultimate price for end-users would increase by 3 ct/kWh.
Lietuvos Rytas, Kauno Diena
Friday, 26th of December
Thursday, 25th of December
Wednesday, 24th of December
Revising electricity prices
Lithuania's national energy company Leo LT will not submit new estimations of electricity rates to the National Control Commission for Prices and Energy, which means that the panel will set the prices unilaterally, thus the electricity rates of Leo LT subsidiary will not be raised, and the prices of electricity for households will only increase by 3 cents per 1 kWh next year instead of 7 cents, as announced previously. Meanwhile, Leo LT CEO Gintautas Mazeika sees the costs of company's subsidiaries soaring by record LTL 70 million next year. Mazeika told that Leo LT will not address the prices panel and will let it set the prices unilaterally. I believe that the commission will set the prices adequately.
Kauno Diena, Respublika, Lietuvos Zinios
Tax on cars
Lithuania's authorities will slap a special LTL 150 monthly tax on company cars in 2009 as a result of which the annual maintenance costs per car will increase by LTL 1,800. The tax will be imposed under the bill on the interim tax on cars owned by legal entities, which the parliament adopted on Tuesday with 63 votes for, 40 votes against and 9 abstentions. Cars with diplomatic number plates will be exempt from the charge. Budget revenues on the tax are seen reaching some LTL 300 million.
Verslo Zinios, Lietuvos Zinios, Lietuvos Rytas
Sanitas buys Polish company
Sanitas, the owner of pharmaceutical plants in Lithuania, Poland and Slovakia, has bought 100 percent of shares in the Polish ointment producer Homeofarm in a deal worth PLN 10.9 million. The Polish pharmaceutical manufacturer Jelfa, the group's largest company, on Tuesday acquired the shares from Hand-Prod, Sanitas said. "This is a small factory. What makes it interesting to us is its product portfolio, since we have plans to develop several similar products," Sanitas CEO Saulius Jurgelenas told to daily. He said that Sanitas had financed the acquisition from its own resources. Homeofarm is based in Gdansk and employs around 16 people. The company posted a net profit of PLN 1.1 million last year, on revenue of PLN 6.65. EBITDA reached PLN 1.6 million.
Verslo Zinios, Lietuvos Rytas
Tuesday, 23rd of December
flyLAL reducing flights
FlyLAL-Lithuanian Airlines has opted to reduce its flights schedule considerably as the government has refused to nationalize the financially-troubled Lithuanian flagship carrier. "Having received the state's answer, we are taking other measures to tackle the situation. Firstly, we will reduce the number of flights," Vytautas Kaikaris, FlyLAL CEO, said in a statement. The company was also mulling other measures, which would be announced later, he added. FlyLAL will stop flights to Istanbul from January 6, flights to Paris from January 7 and flights to Rome from January 12. Starting from January 8, flights to Milan will only be offered on Saturdays. The number of weekly flights to Frankfurt will be reduced to four - on Mondays, Wednesdays, Fridays and Sundays.
Lietuvos Zinios, Kauno Diena, Respublika, Verslo Zinios
New budget bill
Lithuania's parliament has passed the 2009 budget bill. The draft was adopted with 77 votes for, 42 votes against and 5 abstentions. The 2009 budget is said to enable the country to overcome financial crisis and economic downturn. The draft was based on numerous fiscal measures, including the raising of excise duties on cigarettes, alcohol and fuel, cutting of income tax to 21 percent, from 24 percent, raising of value-added tax to 19 percent, from 18 percent, and the profit tax to 20 percent, from 15 percent. The national budget's revenues on VAT are projected to reach LTL 9.337 billion (EUR 2.7 b) next year, accounting for some 38.5 percent of the overall revenue figure. Revenues on income tax should total 4.907 billion (approx. 20.2 pct of the total) and on excise duties LTL 3.992 billion (16.5 pct). Starting from 2009, the majority of income tax and VAT breaks will be repealed. In 2009 the revenues of the central government budget, including the European Union (EU) funds, are projected to reach LTL 25.448 billion. Spending is set to increase by LTL 371.3 million, compared with this year, to LTL 26.944 billion. The budget deficit will then total LTL 1.497 billion.
Kauno diena, Lietuvos Zinios, Respublika, Verslo Zinios
Vilnius Vodka suspends production
Lithuania's alcoholic beverage producer Vilniaus Degtine (Vilnius Vodka), which is controlled by the French group Belvedere, will suspend production in January as a result of fast decline in sales. The company, which now employs the workforce of 250, admits that the suspension may take longer due to the authorities' decision to raise the excise duty on strong beverages from 2009. Higher excise duties would force the company to hike the prices of its products, which would affect the sales, Laurynas Miskinis, Vilniaus Degtine director of commerce and marketing, said in a statement. Vilniaus Degtine reported LTL 8,900 in net profit for the first nine months of this year, down 29 times from the year-earlier figure of LTL 259,900 as the revenues rose by 6.3 percent, year-on-year, to LTL 46.06 million.
Respublika, Verslo Zinios, Lietuvos Rytas
Monday, 22nd of December
Number of passengers
A total of 2.408 million passengers went through Lithuania's airports during the first eleven months of this year, a rise of 18.2 percent on the same time last year, the Statistics Department reported on Friday. The largest numbers of passengers flew to and from the United Kingdom (331,900 passengers or 13.8 percent of the total number), Germany (244,700 or 10.2 percent), Ireland (219,000 or 9.1 percent) and Denmark (205,800 or 8.5 percent). The country's airports handled a total of 43,100 aircraft, both Lithuanian and foreign-owned, during the eleven-month period, up 11.4 percent year-on-year.
Profit tax rose
Lithuania's parliament raised the rate of profit tax levied on dividends to 20 percent, from 15 percent. The respective amendment to the Law on Profit Tax was passed with 74 votes for, nine votes against and seven abstentions. However, the draft bill on health insurance imposes an additional 6 percent health insurance contribution to be paid from any taxable income.
Stumbras presents figures
The sales of Stumbras, alcohol production company, reached LTL 14.75 million in November, which is by 15.2 percent less than last year during the same period. Algridas Ciburys, marketing director of Stumbras, said that the increased excise duty had an influence on such fall; in the meantime, people were buying less alcohol as they started saving money. Ciburys also added that the growth of shadow market also had a lot of influence on decreasing sales.
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