Lithuania Business News: Archive 2003-
Saturday, 14th of February
Consumer prices soared by 9.6 percent in Lithuania in January year-on-year as a result of growing prices of fuel, medicines, electricity and gas, the country's Statistics Department reported. Twelve-month inflation average made up 10.9 percent last month. In January, compared with December, consumer prices grew by 2.7 percent, the department said. Earlier the statisticians projected that the harmonized annual inflation would total 9.2 percent in January, the twelve-month average and the monthly rate would be 11 percent and 2.3 percent, respectively. In January, compared with the previous month, the Consumer Price Index (CPI) was mostly affected by a 10.4 percent surge in healthcare prices, an 8.2 percent increase in transport prices, a 4.5 percent rise in the prices of housing, water, electricity, gas and other fuel, and a 1.7 percent increase in the prices of food and soft drinks.
Respublika, Lietuvos Zinios, Lietuvos Rytas
Consumed less electricity
VST, one of the two power distribution subsidiaries of Lithuania's national energy company Leo LT, said on Friday that its electricity sales fell by 5.8 percent in January from a year ago to 411 million kilowatt-hours (kWh). Virginijus Jankauskas, deputy director of the VST electricity supply unit, said that it was difficult to make exact estimates of declines in industrial consumption and household consumption levels. "Of course, consumption in the industrial sector declined. I think it fell by around 8-10 percent. The lower consumption is not necessarily due to the economic situation. It was also due to a higher number of days off and other factors," he said.
Construction sector declined
Lithuanian builders carried out construction work worth a total of LTL 12 billion in 2008, up 1 percent from a year earlier, the Statistics Department reported on Friday. The total value of construction work performed by Lithuanian companies within the country made up LTL 11.9 billion, abroad LTL 156 million, the department said citing preliminary estimations.
Friday, 13th February
Electricity from Belarus
Energijos Realizacijos Centras (Energy Realization Center, or ERC), the Lithuanian subsidiary of Russia's energy monopoly Inter RAO UES, has signed a long-term contract with Belarus' state-owned company Belenergo over electricity supplies to Lithuania. This followed the signing of a similar contract with Inter RAO UES earlier this year. The contract signed with Belenergo in early February will guarantee the supply of Belarusian electricity to Lithuania after the planned closure of the Ignalina Nuclear Power Plant, ERC said. "This is our first contract with the Belarusians. Until now, we have only imported [electricity] from Russia," ERC Commercial Director Vidas Cebatariunas, said. The company plans to import only 0.5 billion kilowatt-hours (kWh) of Belarusian electricity this year. In the future, imports will depend on the price, he said.
Lietuvos Rytas, Lietuvos Zinios
Payments exceeded the plan
Lithuania's State Social Insurance Fund (Sodra) ran a budget deficit of LTL 221.8 million in January, the fund said on Thursday. It had projected a deficit of LTL 141.8 million for the month. Sodra's revenue for January totaled LTL 801.7 million, which was LTL 55.6 million, or 6.5 percent, lower than planned, but LTL 98.2 million, or 14 percent, higher than in the same period last year, based on preliminary data. The fund's expenditure reached nearly LTL 1.024 billion last month, which was LTL 24.4 million, or 2.4 percent, above the projected level and LTL 116 million, or 12.8 percent, higher than a year ago. Sodra has posted a budget deficit of LTL 1.209 billion for the full year 2008, based on preliminary data.
DnB Nord Bankas, the third-largest Lithuanian bank by assets, said on Thursday that the group's consolidated net profits fell by 35.1 percent last year compared with 2007 to LTL 69.4 million, based on preliminary data. The bank alone posted a 34.4 percent drop in net profits to LTL 70.7 million, down from LTL 107.9 million in 2007. "[The] group faced no direct impact of global financial markets, however, with clear evidence of slowing economy, lending became more conservative," the bank's president and chairman, Werner Schilli, said in a press release.
Lietuvos Rytas, Verslo Zinios
Thursday, 12th of February
Pessimism feeds crisis
The pessimistic moods of the Lithuanian society may cause the economic hardship to last longer than it should, says Mykolas Katkus, executive director of VRP|Hill & Knowlton public relations company. "Recession mostly correlates with one factor, i.e., people's expectations," Katkus said Wednesday in his presentation of the results of a consumer behavior survey Anatomy of Lithuania. In his words, the effects of the domestic climate would be much more extensive in a country of the size of the United States, however the influence is vast already. The sentiments of the Lithuanian population are gloomier than in many other countries, said Ruta Gaudiesiene, research strategy director at TNS Gallup pollster that carried out the research. According to the results, merely 9 percent of respondents in Lithuania think that the global financial crisis will last less than a year, as compared with 36 percent in France, 37 percent in Germany, 31 percent in Great Britain and the United States, 11 percent in Latvia and 15 percent in Estonia. An analysis of the Lithuanian society by its attitude towards the recession revealed six groups of common interests.
Lietuvos Zinios , Lieutovos Rytas, Verslo Zinios, Respublika
Plant is almost new
The Kaunas Hydro Power Plant (Kaunas HPP), which is owned by the transmission system operator Lietuvos Energija (Lithuanian Energy), plans to invest the remaining LTL 47 million and complete its 126-million-litas modernization project by the end of this year. The reconstruction will boost the plant's efficiency by around 10 percent, the Kaunas HPP said in a press release on Wednesday. "All facilities upgraded during the reconstruction process comply with the present-day environmental protection requirements. Also, turbines number three and number four will not need major repairs for 25 years," the plant's CEO, Juozas Bartlingas, said. He said that the modernization would contribute to Lithuania's goal of increasing electricity generation from renewable resources to 23 percent by 2020.
Will fly to Brussels
Belgium's carrier Brussels Airlines will launch direct flights on Vilnius-Brussels route from March 30. The company would offer four weekly flights from Vilnius to Brussels and back, Bernard Gustin, Brussels Airlines' managing director, confirmed to Lithuania's Transport Minister Eligijus Masiulis. "We have several strategically important new destinations in Europe, and Vilnius is one of them," the Transport Ministry's statement quoted Gustin as saying. Latvia's Airbaltic and now bankrupt Lithuania's flagship carrier FlyLAL-Lithuanian Airlines operated the direct route Vilnius-Brussels previously.
Lietuvos Rytas, Verslo Zinios
Wednesday, 11th of February
Even the cut down budget is holey
Lithuania's central government budget recorded the revenue of LTL 1.411 billion for January, LTL 83.3 million or 5.6 percent below the projected amount of LTL 1.494 billion. The revenues on value-added tax (VAT) totaled LTL 900 million last month missing the planned amount by 6.5 percent; the Finance Ministry reported citing final estimations. The revenues on profit tax, at LTL 57.5 million, were 13.4 percent below the target. The national budget revenues on income tax, at LTL 267.4 million, exceeded the planned amount by 36.3 percent, while the revenues on excise duties, at LTL 277.5 million, overshot the target by 13.5 percent. According to final estimations, the revenues of the central government budget, including the support funds of the European Union (EU) and other foreign states, totalled LTL 1.415 billion in January, including LTL 4.4 million in the EU support.
Lietuvos Rytas, Verslo Zinios, Respublika, Lietuvos Zinios
Ratings may be downgraded
The International rating agency Moody's has placed Lithuania's long-term foreign and local currency borrowing ratings A2 on review for possible downgrade. The government's short-term P-1 rating was also placed on review for possible downgrade. "The primary reason for today's rating action is the severe deterioration in the macroeconomic environment," Kenneth Orchard, a vice president and senior analyst in Moody's Sovereign Risk Group, said. "The depth of the shock has raised concerns that Lithuania's economic model may be structurally impaired. Economic growth may remain weak for longer than previously expected, gradually eroding the government's balance sheet over time." The country's foreign currency debt ceilings remain unchanged at Aa1/P-1 with stable outlook.
Lietuvos Rytas, Verslo Zinios
Received less profit
Lithuania's integrated telecommunication, IT and TV services provider Teo LT on Tuesday posted LTL 189.5 million in pre-ta profits for the full year 2008, down 3.4 percent from LTL 196.15 million in 2007, and LTL 159.8 million in net profits, down 1.8 percent from LTL 162.8 million. The group's annual revenue, based on International Financial Reporting Standards, rose by 4.1 percent to LTL 826.267 million, up from LTL 793.430 million the previous year. "The company's results for 2008 are very good. The financial result is better than planned, despite the slightly negative impact on revenues as a result of increased regulation in the network interconnection services market, inflation and increased energy costs," Arunas Siksta, the CEO of Teo LT, said in a press release.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios
Tuesday, 10th of February
Will be establishing the stabilization fund
Lithuanian Prime Minister Andrius Kubilius expects to have a financial sector stabilization bill ready in the near future. "The draft law is almost ready, and I expect that we will submit it to the Seimas (parliament) in March, at the start of the spring session," Kubilius told reporters on Monday after meeting with the Bank of Lithuania's governor, Reinoldijus Sarkinas. The prime minister said that next week he will go to Sweden to discuss the situation in the banking sector with the heads of the Swedish government and financial institutions. Kubilius said that the government is yet to decide whether banks' contributions to the planned 3-billion-litas stabilization fund should be made compulsory or voluntary. Amid ongoing speculation that Scandinavian banks do not want to participate in a stabilization fund that is being set up in Lithuania, the central bank governor has said that he expects to reach agreement with the Scandinavian parent banks of the country's major commercial banks.
Lietuvos Rytas, Respublika
Lithuania's exports grew by 28.4 percent in 2008 from a year earlier, to reach LTL 55.5 billion, while the imports rose by 18 percent, to LTL 2.6 billion, the Statistics Department reported. The country's foreign trade deficit shrank by 6.5 percent, year-on-year, to LTL 17.1 billion, it said. Excluding mineral products, exports rose by 11.6 percent last year, while the imports edged up by 0.2 percent. Exports of Lithuanian-origin goods soared by 31.3 percent, excluding mineral products - by 5.4 percent in 2008. In December, compared with November, exports declined by 15 percent, while the imports dropped by 9.3 percent. Compared with December 2007, exports and imports narrowed by 3.2 percent and 8.8 percent, respectively; excluding mineral products - by 4 percent and 17.4 percent.
Lietuvos Rytas, Respublika
Did not allow Snoras
UK's Financial Services Authority (FSA) has barred Lithuania's Snoras bank from opening a branch in the country because "it repeatedly gave misleading and incomplete" answers to the regulator, which also criticizes the largest shareholder of the Lithuanian bank. Snoras, which was first refused a UK licence in February 2008, claims it was discriminated against and that the FSA's reservations about anti-money laundering and financial crime controls at the Vilnius-based bank are unjustified. According to the FSA, Snoras failed to mention that it had been refused permission to take retail deposits in Russia and had been fined by the Lithuanian banking regulator.
Monday, 9th of February
The total volume of cargo going through the Lithuanian port of Klaipeda declined by 8.7 percent in January from a year earlier to 2.404 million tons, the Port Authority has reported. Oil product loadings at the port increased by 21.6 percent year-on-year to reach a new monthly high of 953,000 tons, it said. Year-on-year, the total volume of liquid cargo handled at the port rose by 8.4 percent. However, the handling of bulk cargo fell by 22.6 percent to 616,000 tons and general cargo volumes decreased by 26.9 percent to 547,000 tons.
Snaige suspends the production at its plant in Kaliningrad
Crisis-hit Lithuania's refrigerator producer Snaige will halt production at its plant in Russia's exclave of Kaliningrad from March 2. The measure will entail layoffs of several hundreds of employees. The board opted for the suspension of manufacturing in an attempt to reduce losses stemming from the devaluation of Russia's national currency and general market downturn, Snaige said in a statement to the NASDAQ OMX Vilnius Stock Exchange. "The period of suspension has not been established. If we knew that it would last one or two weeks, that would be a temporary tactical measure. We have accumulated large stocks - not just for one or two months. Therefore, we will not be able to produce either in one or two months. The uncertainty is large," Gediminas Ceika, Snaige CEO, said.
Verslo Zinios, Respublika
Lithuania's official international reserves shrank by LTL 780.8 million, or 4.9 percent, in January from December to LTL 15 billion, the central bank reported on Friday. The decline was due to decreases of LTL 582.7 million in deposits of other monetary financial institutions with the Bank of Lithuania, of LTL 510 million in the amount of currency in circulation and of LTL 108.2 million in central government deposits. This was partly offset by increases of LTL 225.3 million in the Bank of Lithuania's external liabilities and of LTL 194.7 million in other factors, the central bank said.
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