Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 18/2009

Saturday, 2nd of May

Electricity price will decrease
Electricity prices for consumers in Lithuania should go down by LTL 0.04 per kilowatt-hour (kWh) and return to last year's level. Lithuania's national energy company Leo LT said on Thursday that its management board would find possibilities of cutting electricity prices by LTL 0.04 per kWh starting Jul. 1, as requested by shareholders. "Understanding the difficult economic situation in the country and having a clearly stated position from the shareholders, from the second half of this year, we take the responsibility to reduce the price of the electricity to consumers, restoring it to the level of the year 2008. We will use all possible resources to achieve this," Rimantas Vaitkus, Leo's management board chairman, said in a press release. Energy Minister Arvydas Sekmokas said on Tuesday that shareholders would ask Leo's subsidiaries to look for ways of bringing electricity prices back to the 2008 level. He said that both power distribution subsidiaries, RST and VST, had reserves to reduce prices for households and businesses.
Lietuvos Rytas, Respublika, Lietuvos Zinios

The government is in debt
The Lithuanian central government's debt widened by LTL 1.671 billion in March from February, to LTL 18.791 billion, accounting for 18.7 percent of this year's projected GDP, the Finance Ministry reported on Thursday. The sector's domestic debt rose by LTL 273.8 million over the month, to LTL 6.181 billion, or 32.9 percent of the total debt, it said. The central government sector owed LTL LTL 11.14 billion to foreign banks and other financial institutions, and 1.471 billion to international organizations.

Money for stabilization
Lithuania's government will use the receipts on the sale of almost 10 percent in Mazeikiu Nafta (Mazeikiai Oil) to Poland's oil concern PKN Orlen for stabilization of financial system, Prime Minister Andrius Kubilius has said. "These funds will not be used for momentary expenditures. They are designated for the stabilization of financial system and will be kept in the reserve and, if any problems emerge, used to solve those problems." he said in an interview to the news radio station Ziniu Radijas on Thursday. PKN Orlen paid USD 284,965,467 for the stake, including interest, on Wednesday. The whole amount was transferred to the account of the governmental Stabilization (Reserve) fund at the Bank of Lithuania. Asked how the authorities intended to protect national security interests now, when the state had lost any influence at Mazeikiu Nafta, Kubilius said that this issue had been considered at the State Defense Council.
Lietuvos Zinios

Friday, 1st of May

State Holiday.

Thursday, 30th of April

Loss was determined by dollar
Lithuania's Limarko Shipping Company (LLK) reported LTL 10.6 million in unaudited losses for the first three months of this year, reversing the year-earlier pretax profit of LTL 6.9 million. Three-month turnover, meanwhile, rose by 7 percent, year-on-year, to LTL 38.6 million, the company said in a statement to the NASDAQ OMX Vilnius Stock Exchange. Limarko, a privately-owned company, holds a 91.56 percent stake in Limarko Shipping.
Verslo Zinios

Moods are improving
Lithuania's consumer confidence index rose to -50 points in April, up 1 percentage point from March's level of -51 points, the Statistics Department reported on Wednesday. In year-on-year terms, consumer confidence slumped by 40 percentage points, it said. The statistics office attributed the month-on-month improvement in consumer confidence to a less pessimistic outlook for the labor market and slightly improved expectations about the country's economic prospects. However, the percentage of people who thought they could save money in the next 12 months declined this month compared with March. Four percent of consumers surveyed in April said that their household finances had improved over the past year, down from 5 percent in the March survey. Some 61 percent said their household finances had worsened, up from 55 percent and 35 percent said their finances had not changed, down from 39 percent.
Verslo Zinios, Respublika, Lietuvos Rytas

Does not pay dividends from losses
The shareholders of Lithuania's largest knitwear manufacturer Utenos Trikotazas (Utena Knitwear) ruled to forgo annual dividends for 2008. The audited losses of the company made up LTL 6.233 million last year. The audited losses of the whole group soared 2.1 times last year, to LTL 17.075 million. Utenos Trikotazas shares are quoted on the blue-chip Main List of the stock exchange. The SBA Group holds a controlling stake in the company, which is based in Utena, in eastern Lithuania.
Verslo Zinios

Wednesday, 29th of April

Insurance market narrowed
Lithuania's insurance market, as measured by premiums written, contracted by 8.8 percent in the first three months of this year, to LTL 435.35 million, from LTL 477.272 million in January-March 2008, the country's Insurance Supervisory Commission (DPK) reported on Tuesday. Year-on-year, the non-life insurance market shrank by 5.4 percent, to LTL 323.341 million, and the life insurance market went down by 17.2 percent, to LTL 112.009 million, it said. Non-life insurance accounted for 74.3 percent of all premiums written, up from 71.6 percent a year earlier. Life insurance's share of the total premiums dropped to 25.7 percent, from 28.4 percent.
Lietuvos Rytas, Respublika

Turnovers fell by one third
Combined turnover of Lithuania's retailers, ex VAT, totaled LTL 6.358 billion in the first three months of this year, down 30 percent year-on-year, the country's Statistics Department reported on Tuesday citing preliminary estimations. In March alone, the retail sales rose by 6.5 percent, month-on-month, to LTL 2.17 billion. Compared with March 2008, the combined turnover of retail companies plunged by 30.8 percent (at comparative prices) last month. Three-month turnover of motor fuel retailers declined by 19.3 percent, that of food retailers - 15.7 percent, non-food retailers (ex cars) - 23 percent. The combined turnover of motor vehicles and motorcycles wholesale, retail and repair companies plummeted by 55.7 percent in the reporting period.
Verslo Zinios, Respublika

Promise cheaper gas and electricity
Lietuvos Energija (Lithuanian Energy) and VST, both subsidiaries of Lithuania's national energy company Leo LT, may change their chief executive officers, Energy Minister Arvydas Sekmokas said on Tuesday. "The annual general meetings of both Leo LT and its subsidiaries are approaching. We are asking the companies to bring electricity prices both for households and business consumers back to 2008 levels and to change the CEOs of VST, RST and Lietuvos Energija," he said during an online chat on the news site. RST is expected to appoint a new CEO during its AGM on April 30 to replace Rimantas Vaitkus, who has stepped down to take over the helm of Leo LT. However, this is the first time that plans to make top management changes at Lietuvos Energija and VST have been mentioned in the public. The companies are now headed by Darius Masionis and Aidas Ignatavicius, respectively.
Verslo Zinios, Lietuvos Zinios

Tuesday, 28th of April

7.600 unemployed
Some 7,600 people were registered as unemployed in Lithuania last week, the country's Labor Exchange said on Monday. The Labor Exchange had registered 6,200 job-seeking people the previous week. "We will no longer publish job-seeker numbers, because we lack the capacity to cope with the increasing workload," Birute Balyniene, a spokeswoman for the Labor Exchange, said. As of April 24, there were 184,900 people with the status of an unemployed person, up from 182,800 a week earlier, accounting for 8.6 percent of the working age population. Balyniene said that this figure showed the real unemployment level. The previously announced unemployment rate of 10 percent actually was a ratio of job-seekers to the entire working age population.
Lietuvos Rytas, Lietuvos Zinios, Respublika

Promises to pay money
Poland's PKN Orlen this week expects to pay the remaining 227.56 million US dollars to the Lithuanian government for almost 10 percent of shares in Mazeikiu Nafta (Mazeikiai Oil). "We have an agreement with the government and it is still in effect," PKN Orlen spokesman David Piekarsz said on Monday. On March 27, the Polish company transferred USD 56.89 million into an escrow account at SEB Bank. That accounts for 20 percent of the total price it is to pay for the government's remaining 10 percent stake in the oil refining and transportation complex. Under an amendment to the put option contract, PKN Orlen is to pay the remaining USD 227.56 million and to close the deal by April 30 at the latest. The amendment was signed on March 26. If PKN Orlen fails to pay the rest of the money by the end of April, the government will keep the 20 percent paid but will not transfer 9.98 percent of shares in Mazeikiu Nafta to the Poles. The government is to receive a total of USD 284.45 million plus interest amounting to six-month LIBOR in US dollars as of the last business day prior to the transfer day.
Lietuvos Rytas, Lietuvos Zinios

Turnover grew
Svyturys-Utenos Alus, Lithuania's largest brewery controlled by Denmark's Carlsberg Group, reported on Monday LTL 566.6 million in sales revenue for the full year 2008, up 10.2 percent from LTL 514 million in 2007. Svyturys-Utenos Alus attributed the revenue growth to increased prices for its products due to higher raw material and energy costs. The company's total beverage sales last year fell by 1.4 percent to 192.7 million liters. Svyturys-Utenos Alus said its beer sales in Lithuania edged down by 0.1 percent to LTL 135.2 million. Nevertheless, the company's share of the domestic beer market rose to 45.7 percent from 45 percent.
Lietuvos Rytas

Monday, 27th of April

LTL 1.97 dividends per one KLASCO share
Klaipedos Juru Kroviniu Kompanija (Klaipeda Stevedoring Company, or Klasco) will pay a dividend of LTL 1.97 per share to shareholders after posting a net profit of LTL 15.369 million for 2008. Klasco's shareholders on Friday approved a dividend payout of LTL 25 million, or LTL 1.97 per share, the company said in a statement to the NASDAQ OMX Vilnius stock exchange. The shareholders also decided to delist the company's shares from the Secondary List of the Vilnius bourse.
Verslo Zinios

Hires 100 IT specialists for development
CSC Baltic, a subsidiary of the US information technology solutions and consulting company Computer Sciences Corporation, which launched operations in Lithuania last year, plans to hire another 100 IT professionals within a year. "Our investments in Lithuania have truly bought off. We intend to pay somewhat more attention to the integration of the company in Lithuania into the global service network of CSC," Frank Heitmann, vice-president of CSC World Sourcing Services, told the reporters on Thursday. CSC Baltic now employs a workforce of 164. On Thursday the company opened its second office in Vilnius officially. "Now the objective of the company is to have 250 employees and be among four largest IT companies in Lithuania," Mikkel Bach, CSC Baltic CEO, said. CSC also says to be mulling a possibility to enter Latvia's market. The company might establish there a customer service center that would render services to the company's customers in Scandinavia. Verslo Zinios

Sanitas confirmed losses
Lithuania's biggest pharmaceutical producer Sanitas has decided to pay no dividend to shareholders this year after posting a net profit of LTL 12.269 million for 2008. Sanitas' shareholders voted on Friday to carry the entire distributable profit of LTL 20.506 million over to the next financial year, the company said. Invalda held a 23.73 percent stake in Sanitas at the end of this year. Two equity funds -- Citigroup Venture Capital and Amber Trust -- owned 17.08 percent and 12.7 percent, respectively.
Verslo Zinios

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