Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 11/2009

Saturday, 14th of March

A gap in the budget
The revenues of Lithuania's central government budget totaled LTL 2.823 billion in the first two months of this year, missing the revenue target by LTL 381.1 million or 13.5 percent, the Finance Ministry reported on Friday. Two-month revenues on VAT, profit tax and excise duties were all below planned amounts, it said. Revenues on VAT totaled LTL 1.382 billion in January-February, 16.8 percent less than planned. Revenues on profit tax came in at LTL 70.8 million missing the target by 21.4 percent, and the revenues on excise duties made up LTL 534.4 million, 8.4 percent less than planned. Revenues on income tax, meanwhile, exceeded the target by 6.5 percent, to reach LTL 631.8 million in the reporting period. The ministry pointed out that owing to the tax reform implemented by Andrius Kubilius-led government two-month revenues were approximately LTL 185 million larger than they would have been without those measures.
Respublika, Lietuvos Rytas

Lithuania managed to borrow cheaply
Lithuania's government and the European Investment Bank (EIB) have signed an agreement on a EUR 1.132 billion loan in Vilnius on Friday. The document was signed by Finance Minister Algirdas Semeta and EIB Vice-President Eva Srejber. "The first tranche – EUR 340 million - will be paid to Lithuania at once, this will comprise 30 percent of the loan, which is the subject of the agreement," Ms. Srejber said after the signing ceremony. "I would like to point out that the terms of the loan are very favorable. Its term is up to 25 years with a 7-year grace period, during which only the interest will be paid," Finance Minister Algirdas Semeta said. The fixed annual interest of 4.2 percent would be paid throughout the loan repayment period, he added.
Lietuvos Rytas, Lietuvos Zinios

Deficit decreases
Lithuania's January foreign trade deficit, at LTL 79 million, was the lowest since 1995 and may remain unchanged or continue to decline in coming months, the analysts project. "The deficit has almost disappeared. The trend is good since previously the deficit was too large and it had to be covered somehow. Now we are consuming more reasonably, in line with the potential, whereas previously we consumed at the expense of the future," Rimantas Rudzkis, chief analyst with DnB Nord bank, said.
Lietuvos Rytas

Friday, 13th of March

Spent less on housing
Spending on housing purchase plummeted by 34 percent in Lithuania in 2008, to LTL 3.5 billion, from LTL 5.3 billion in 2007, the Center of Registers reported. Ninety percent, or nine out of ten housing units acquired in Vilnius, were apartments in blocks of flats. In the rest of Lithuania, flats accounted for 70 percent of all housing units purchased. Detached houses were acquired by 10 percent of property buyers in Vilnius and one in three property buyers in the rest of the country. The decline in housing prices was the most pronounced in the capital by the end of 2008 as the prices dropped by 11.4 percent per square meter on average in Vilnius in the fourth quarter. In the rest of the country, the prices of all types of housing shrank by 2.9 percent on average in October-December.
Lietuvos Zinios, Respublika, Lietuvos Rytas

Milk prices fell
The average natural milk purchase price in Lithuania reached LTL 637 per ton in February, down by 42.7 percent compared with February 2008, the Agriculture Ministry reported on Thursday. Compared with January, the price declined by 4.9 percent last month. The total volume of natural milk purchased from farmers in February dropped by 6.4 percent, year-on-year, to 79,940 tons, the ministry said.
Respublika, Lietuvos Rytas, Verslo Zinios

Offered shares
Lithuania's government has sent to Poland's oil concern PKN Orlen a formal offer to buy out almost 10 percent of Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refinery, PKN Orlen said. The offer was sent on March 10, and the deal should be closed at the Ministry of Economy in Vilnius on midday on March 20, Neringa Pazusiene, the director of the Law and Public Procurement Department at the Economy Ministry, said. Lithuania in late 2006 sold PKN Orlen a 30.66 percent stake in Mazeikiu Nafta and has an option to sell the rest of the shares. Under the terms of the put option agreement, the deal has to be concluded in Vilnius in ten days after the notice is given, or the next work day if this date falls on a weekend or holiday. The ownership in shares should be transferred to the Polish oil concern on the same day. With the transaction finalized, some LTL 772 million will flow into the state's coffers.
Lietuvos Rytas

Thursday, 12th of March

Vilkyskiu Dairy sold more
Lithuania's Vilkyskiu Pienine (Vilkyskiai Dairy) group reported LTL 21.3 million in sales for the first two months of this year, up 28 percent year-on-year. In February alone, the sales of the group increased by one-fourth, year-on-year, to LTL 10.9 million, the dairy said in a statement to the NASDAQ OMX Vilnius Stock Exchange.
Verslo Zinios, Lietuvos Rytas

Difficult year ahead
Lithuania's economic decline will exceed the level of 4.8 percent, which the Finance Ministry projected for 2009 at the end of last year, Prime Minister Andrius Kubilius admits. "Our official December projections that Lithuania's economy will decline by 5 percent in 2009 are too optimistic," he told the MPs on Tuesday. He would not disclose any new downturn projections, however. "I will not reveal any specific figures today, we will do that in the nearest term. However, to tell the truth, the decline is faster than we could have expected in November or December," Kubilius said. In "this context" the key objective of the government was to maintain a stable litas rate, he highlighted. Economic recovery could be expected in 2011, Kubilius added.
Respublika, Lietuvos Rytas

Would go up on discounts’ wings
A group of Lithuanian businessmen has offered to the state to buy 50 percent of charter carrier FlyLAL Charters for LTL 4-7 million and use the company as a foundation to establish a new flagship carrier. Transport Vice-Minister Arunas Staras said that the shareholders of FlyLAL Charters had only submitted to the ministry a presentation of the proposal so far. "We asked to submit an official proposal, which we could consider," he said. As estimated by the shareholders of FlyLAL Charters, public companies should also contribute to the development of new base air carrier via investments: Lietuvos Gelezinkeliai (Lithuanian Railways) should invest LTL 2 million per year into the ticket sale system for at least a couple of years, Oro Navigacija should contribute LTL 15 million, and Vilnius International Airport – LTL 5 million. According to Staras, FlyLAL Charters also proposed to shut down Kaunas Airport, the second largest in the country, in ten years and entrust the company with all flights required for public authorities, including the President's Office and the Ministry of Defense. As estimated by FlyLAL shareholders, the establishment and development of new base carrier would cost several hundreds of millions of litas. Verslo Zinios, Lietuvos Rytas

Wednesday, 11th of March

State Holiday.

Tuesday, 10th of March

Less gas
Lithuania imported 3.215 billion cubic meters of natural gas from Russia in 2008, down 14.8 percent versus the 2007 imports of 3.67 billion cubic meters, the Economy Ministry said in its 2008 economic overview. Gas consumption in Lithuania declined by 11 percent, year-on-year, to 3.123 billion cubic meters last year. The largest share of that volume was purchased from Russia's Gazprom, with further 134.7 million cubic meters delivered from Latvia's Inchukalns underground gas storage facility. Lietuvos Dujos (Lithuanian Gas) remained the top natural gas importer, yet its imports declined by 23.6 percent, year-on-year, to 1.135 billion cubic meters last year. Dujotekana, controlled by Gazprom, imported 486.9 million cubic meters of natural gas in 2008, down 1.4 percent versus 2007. The imports by Haupas shrank by 1.8 percent, to 16.1 million cubic meters.
Lietuvos Zinios

Has inflation run out of steam?
Annual inflation hit 8.7 percent in Lithuania in February, the country's Statistics Department reported on Monday. Twelve-month inflation average was 10.7 percent. Compared with January, consumer prices edged up by 0.3 percent in February. Earlier the department projected that the harmonized monthly inflation would total 0.3 percent in February, the annual inflation would be 8.3 percent and the twelve-month average - 10.7 percent.
Lietuvos Rytas, Verslo Zinios, Respublika

The bankruptcy of flyLAL is launched
The court has launched bankruptcy proceedings against collapsed Lithuania's flagship carrier FlyLAL-Lithuanian Airlines. The company Imoniu Bankroto Administravimo ir Teisiniu Paslaugu Biuras (Office of Corporate Bankruptcy Administration and Legal Services) was appointed the bankruptcy administrator, the representatives of Vilnius Regional Court said. Applications as regards the initiation of bankruptcy proceedings were lodged by FlyLAL CEO Vytautas Kaikaris, the company's shareholders ZIA Valda, Sanitex and Indeco, and the public company Oro Navigacija. FlyLAL-Lithuanian Airlines grounded all flights on January 17 amid shortage of operating assets and suspension of financing by shareholders. Later it filed for bankruptcy at the Vilnius Regional Court. FlyLAL-Lithuanian Airlines was privatized back in 2005. Current shareholders paid LTL 25.6 million for 100 percent of the carrier then known as Lietuvos Avialinijos (Lithuanian Airlines).
Verslo Zinios, Lietuvos Rytas, Lietuvos Zinios

Monday, 9th of March

Clients were trading more
The total turnover of securities held by customers of Lithuanian-registered financial brokerage companies and commercial banks' units reached LTL 7.108 billion in the fourth quarter of 2008, down 4.9 percent compared with the third quarter, the Securities Commission reported on Friday. The data cover trading in equities, corporate debentures, government securities and investment units of investment funds both on the domestic and foreign markets, it said. The total turnover on the Lithuanian securities market declined by 22.8 percent over the quarter to LTL 4.286 billion, accounting for 60.3 percent of the overall turnover.
Verslo Zinios

Opened shops
Apranga, the leading clothing retailer in the Baltics, has invested around LTL 2.9 million in four new stores that are opening for business in Siauliai, in northern Lithuania, on Friday, the company said. The new stores -- Apranga, Aprangos Galerija, Mango and City Men & Women -- cover a total area of 1,700 square meters at the new Akropolis mall in Siauliai, it said. The group currently operates a total of 107 stores in the Baltic countries, of which 75 stores are in Lithuania, 23 in Latvia and nine seven in Estonia. MG Baltic, one of Lithuania's biggest business conglomerates, controlled a 52.4 percent stake in Apranga via its investment arm, MG Baltic Investment, as of early January.
Verslo Zinios

Sales fell
Rokiskio Suris (Rokiskis Cheese), one of the biggest dairy groups in Lithuania, said on Friday that its consolidated sales revenues for the first two months of this year fell by 6.2 percent year-on-year to LTL 85.782 million. The group's monthly sales for February dropped by 11.4 percent from a year earlier to LTL 39.902 million, Rokiskio Suris reported to the NASDAQ OMX Vilnius stock exchange. The dairy group has reported LTL 18.719 million in consolidated losses for the full year 2008, versus LTL 34.238 million in net profits in 2007. Consolidated revenues rose by 2.1 percent last year to LTL 679.015 million.
Verslo Zinios

Previous weeks:

Back to Baltic Business Monitor