Lithuania Business News: Archive 2003-
Saturday, 28th of February
The product was estimated one more time
Lithuania's Gross Domestic Product (GDP) rose by 3.1 percent versus 2007, to reach LTL 111.52 billion in 2008, although in the fourth quarter alone the economy declined by 2 percent from October-December 2007, the country's Statistics Department announced on Friday citing revised estimations. Earlier the department reported that, based on preliminary estimations, Lithuania's GDP rose by 3.2 percent over 2008 but shrank by 1.5 percent in the last quarter.
Addressed the court
The parliamentarians has sent an official letter to the Prosecution Service of Lithuania requiring to the launch the pre-trail investigation about the activities of the Minister of Transport and Communication Eligijus Masiulis, while suspending the license of the national Lithuanian air carrier flyLAL. The parliamentarians stated that Masiulis has gone beyond his commission moreover; he violated the Constitution by suspending the activities of flyLAL. It is also noted that Masiulis’ actions caused the damage worth LTL 10 million for the airline. Masiulis avoided commenting on the situation yesterday.
The chain of debts
The company Ranga IV, which provides construction services for banks and different companies, had a debt worth LTL 75 million last December. In the meantime, other companies owe Ranga IV, which is controlled by the famous businessperson Laimutis Pinkevicius, about LTL 65 million. Ranga IV does not have any asset except the construction equipment. All the apartments which were built by the company belong to the other companies which are controlled by Ranga Group led by Pinkevicius as well. The daily notes that the reorganization process of Ranga IV has been started and it is intended to establish its plan in five months.
Friday, 27th of February
The year was profitable
The net earnings of Lithuania's Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refinery controlled by Poland's PKN Orlen, totaled USD 23 million in 2008, down 36 percent compared with the year-earlier figure. Full-year revenues, meanwhile, doubled year-on-year to 7.463 billion US dollars (LTL 20 b), PKN Orlen said in a report. In the last quarter of 2008 the losses of Mazeikiu Nafta made up USD 78 million, up 3.7 times compared with October-December 2007, while the revenues grew by 34 percent, to 1.116 billion US dollars (LTL 2.99 b).
Lietuvos Rytas, Verslo Zinios
The number of Verslo Zinios
Construction costs in Lithuania fell by 0.7 percent in January compared with the same period a year ago, the Statistics Department reported on Thursday. In January compared with December, the construction cost index fell by 1.2 percent, it said. A 3.3 percent decrease in wages and overhead costs and a 0.1 percent decline in prices for construction materials and products had the biggest impact on the monthly index, according to the report.
Does not earn, does not advertise, does not sell
Media experts forecast that Lithuania's advertising market will shrink by around 27 percent this year compared with last year, a TNS Gallup poll has shown. Media experts polled by TNS Gallup in January and February predicted that the television advertising market would decline by 24 percent, radio advertising by 21 percent, newspaper advertising by 30 percent, magazine advertising by 26 percent, outdoor advertising by 27 percent and cinema advertising by 24 percent. The Internet adverting market is forecast to increase by 17 percent, making it the only advertising medium that is expected to record any growth this year, according to the poll.
Verslo Zinios, Respublika
Thursday, 26th of February
The average monthly gross pay in Lithuania rose by 13 percent in the fourth quarter of 2008 from a year earlier to reach LTL 2,319.1, while the average net monthly salary increased by 16.1 percent to LTL 1,773.1, the Statistics Department reported on Wednesday. Real wages in the entire economy (excluding sole proprietorships) went up by 6.2 percent in the reporting period, it said.
Verslo Zinios, Lietuvos Rytas
Mazeikiai Oil received an insurance payout
Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refinery controlled by Poland's oil concern PKN Orlen, has received an insurance payout of USD 63 million for damages caused by a major fire that ravaged the refinery back in October 2006. This is the third insurance payout for the fire-ravaged vacuum distillation unit, the company said in a statement on Wednesday. This follows a 70-million-US-dollar insurance payout in late September 2007 and a 40-million-dolalr payout in late January 2008. The latest payout brings the total amount of insurance payments received to 173 million dollars. Mazeikiu Nafta said that it continued negotiations with insurance companies over further payouts. The company said that the 63-million-dollar insurance payout would have a positive effect on its financial results for the full year 2008, due out on Thursday.
The European Commission urges to cut spending
The European Commission said on Wednesday that Lithuania's tight fiscal policy and public spending curbs seemed appropriate in the light of the existing economic imbalances, but warned that the government's budget results could be much worse than planned. Lithuania's public sector deficit is likely to exceed 3 percent of GDP this year, although the government targets a deficit of 2.1 percent, the EU's executive body said in its assessment of the country's convergence program The European Commission recommended that Lithuania should limit public sector wages "to facilitate the alignment of whole-economy wages with productivity and to strengthen cost competitiveness." It also called on the country to "implement measures needed to achieve the budgetary target in 2009 by prioritizing expenditures and continue targeted fiscal consolidation in the medium-term" and to "strengthen fiscal governance and transparency, by enhancing the medium-term budgetary framework and reinforcing expenditure discipline."
Wednesday, 25th of February
Threat for ratings
The international rating agency Standard & Poor's may downgrade Lithuania's long-term local and foreign currency borrowing rating BBB+ and short-term borrowing rating A-2. Standard & Poor's also placed its A/A-1 sovereign credit ratings on Estonia on CreditWatch with negative implications. "The CreditWatch placements on Lithuania and Estonia reflect what we consider is a worsening economic outlook for the two economies, particularly greater external vulnerability due to weaker export performances. For Lithuania, the placement also reflects uncertainty regarding the country's energy policy," the agency said in a statement.
Tomas Vaisvila, the new CEO of Vilnius International Airport, said on Tuesday that the airport would not compete with other Lithuanian airports. Vaisvila, who took up his new position earlier in the day, said that he saw much room for improving the efficiency of the airport's operations by revising its costs and attracting new airlines. One of his goals is to re-establish direct air links with London, Amsterdam, Paris and Berlin by the end of March. Vaisvila, 31, was commercial director at Baltijos Logistikos ir Investiciju Centras (Baltic Logistics and Investment Center) before his new appointment.
Lietuvos Rytas, Verslo Zinios
Will search for partners
Lithuania will invite one or several strong Western energy companies to participate in its new nuclear power plant project, Energy Minister Arvydas Sekmokas has said. The authorities should soon choose an adviser who would assist in developing the model [of the project's implementation], compiling a list of companies that could be invited to place bids, working out the terms and conditions of the tender and holding talks with the companies willing to participate in the project, he said.
Tuesday, 24th of February
Output results were not delightful
Lithuania's industrial output and sales declined by 5.6 percent in January year-on-year, the Statistics Department reported on Monday. Compared with December, the output shrank by 6.2 percent last month, it said. The output and sales in the mining and quarrying and the manufacturing sector dropped by 5.9 percent in January, year-on-year. The output and sales in the mining and quarrying alone plummeted by 47.4 percent, manufacturing - 5.5 percent, and manufacturing excluding refined petroleum products - 21.8 percent. In January, versus December, the output and sales in the mining and quarrying and the manufacturing sector declined by 8.5 percent. The output and sales in the mining and quarrying alone plunged by 39.3 percent, manufacturing - 8.2 percent, and manufacturing excluding refined petroleum products - 14.5 percent.
Verslo Zinios, Respublika, Lietuvos Zinios, Lietuvos Rytas
Nuclear power plants built by the neighbors are not profitable for Lithuanians
More than a half or 56.2 percent of Lithuania's city dwellers believe that the country should abandon its plans to build a nuclear power plant if new nuclear facilities are built by neighboring countries - Belarus and Russia's exclave of Kaliningrad, the latest poll commissioned by the Veidas weekly has shown. Some 33 percent of the polled, mostly the residents of Vilnius, consider that Lithuania needs a new nuclear facility under any scenario, the poll conducted by the research and consulting company Prime Consulting revealed. Urban dwellers also believe that the most effective means to reduce Lithuania's energy dependence on Russia would be the construction of power links with Sweden and Poland (47.6 pct) and the building of new hydro and wind power plant (33.2 pct). Meanwhile, just 13 percent of the polled consider that the new nuclear facility could be effective in this regard.
Offers for 18 percent interest
Lithuania's refrigerator manufacturer Snaige, which has run into financial difficulties due to the crisis in Russia and Ukraine, is set to launch a 7.5-million-euro one-year convertible bond issue aimed at redeeming a 20-million-litas convertible bond issue placed last April. Snaige's shareholders on Monday approved the new convertible bond issue and set the maximum annual interest rate at 18 percent. Upon maturity, the bonds will be convertible into ordinary registered shares at a rate of one to 345 shares.
Monday, 23rd of February
Would lure with lower taxes
Prime Minister Andrius Kubilius doubts whether Lithuania's state would invest into new basic airline that could take up the niche left empty by collapsing flagship carrier FlyLAL-Lithuanian Airlines. Kubilius and the Minister of Transport and Communication agreed that a new kind of strategy should be established at Vilnius International Airport, it was said that the taxes should be cut down in the airport so that the number of flights would increase from and to Vilnius. In the meantime, Rolandas Valiunas, chairperson of the Investors’ Forum, said that the airport must not be a profit seeking company, on the contrary, it should take care that the airport had as many flights as possible and ensure their safety.
Lithuania's refrigerator manufacturer Snaige is planning a further round of layoffs after announcing 300 job cuts in January. That will reduce the workforce at Snaige's factory in Alytus, in southern Lithuania, to 786 persons. The sacked employees asked the company to give at least one fridge for each dismissed employee, because the unemployment compensation were so little. Nevertheless, the representatives of Snaige’s administration were not interested in such request of the former employees.
The salespeople are moving away from the province
The daily Lietuvos Rytas interviews the representatives of the biggest retail chains in Lithuania, which note that it is not worthy to keep so many shops open in the Lithuanian countryside during the difficult period. Renata Saulyte, representative of Maxima LT, says that the chain is changing its strategy and plans moving away from smaller towns of Lithuania. She adds that the chain evaluated the situation in the market and decided to close the shops where the profit is lower than expected. Moreover, Maxima LT chain has suspended its development plans and intended to open only five new shops this year. Nevertheless, the representatives of the retail chains Iki and Rimi state that they do not intend to suspend their activities in the smaller towns. Rimi plans establishing a couple shops in bigger cities and towns this year.
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