Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 25/2009

Saturday, 20th of June

Grain prices decreased The Economy Ministry claimed that grain prices in Lithuania decreased by 48 percent in the first quarter of this year from a year ago to LTL 386 per ton on Friday. Total grain purchases in the country rose by 54 percent year-on-year to 470,900 tons in comparison with the same period last year.
Lietuvos rytas

Consultant has been selected A consortium led by Britain's investment bank N M Rothschild & Sons has been selected as consultant for Lithuania's planned new nuclear power plant project. The Lithuanian Energy Ministry on Friday named the winner of a contract to provide business consulting and financial advice to the Visaginas Nuclear Power Plant. Other members of the consortium included the Nordic-Baltic investment bank Evli, the international economic and financial consultancy NERA Economic Consulting and the German technical consultancy Fichtner.
Lietuvos rytas, Respublika

Number of passengers has declined According to the Statistics Department, a total of 665,500 passengers went through Lithuania's airports in the first five months of this year, down 31.9 percent year-on-year. The largest number of passengers flew to and from the United Kingdom (103,700 passengers, or 15.6 percent of the total number), Latvia (84,500, or 12.7 percent), Germany (70,200, or 10.5 percent), Denmark (66,800, or 10 percent) and Ireland (65,700, or 9.9 percent). Respublika

Friday, 19th of June

Investors are appalled
Lietuva Statoil, the operator of one of Lithuania's biggest retail fuel chains, said on Thursday that fuel sales at its filling stations fell by 18 percent in the first five months of this year compared with a year ago. Lietuva Statoil CEO Morten Christensen said at a news conference in Vilnius that the sharpest decline was in the southern part of the country, where gasoline sales dropped by 27 percent and diesel fuel sales slumped by 42 percent. "This situation was due to lower fuel prices in Poland, which make it difficult for Lithuanian retailers to compete for buyers in the border area," Christensen said. "One liter of gasoline in Poland is now 45 centas (13 euro cents) cheaper than in Lithuania and diesel fuel is 47 centas cheaper. The excise duty on gasoline in that country is 21 percent lower than in Lithuania and the duty on gasoline is 29 percent lower," he said. Lietuva Statoil CEO Morten Christensen said at a news conference that the company planned to stop investing in Lithuania unless the government lowered the excise duty on fuel this year. The company is asking the government to reduce the excise tax to the minimum required by the European Union, or at least bring it closer to those applied in neighboring countries.
Lietuvos Rytas, Verslo Zinios

Reduced the target share price of Teo LT
The analysts of Swedbank, one of the largest Lithuania's commercial banks, have affirmed their Buy recommendation on the shares of Teo LT, the leading Lithuania's landline operator, although reduced the company's target share price to LTL 1.55, from LTL 1.95. "The estimated share value exceeds the current market price by more than 43 percent. The analysts see the shares of Teo LT bearing medium risks," Swedbank said in a statement. "With its first quarter results Teo LT has proved once more that it is more resilient to economic downturn. A decline in quarterly revenues and profits was much less significant compared with the general economy. We expect the same trends in the company's performance to prevail in the second quarter. We project a decline in revenues and somewhat faster contraction of earnings due to lower revenues and higher profit tax," Neringa Dziugelyte, an analyst with Swedbank, said.
Verslo Zinios

Investments shrank
Lithuania's electronic communications market, as measured by revenue, shrank by 5.6 percent in the first quarter of this year from a year ago to LTL 713.77 million, revised data from the Communications Regulatory Authority showed on Thursday. On a quarterly basis, the market contracted by 9.3 percent, it said in a report. Investments in the electronic communication network infrastructure dropped by 12.2 percent year-on-year to LTL 69.7 million. Compared with the last quarter of 2008, the decline. Verslo Zinios

Thursday, 18th of June

Were loss-making
Lithuania's companies suffered combined losses of LTL 140.7 million in the first three months of this year, the country' Statistics Department reported on Wednesday. The aggregate losses contracted by almost 90 percent compared with the final quarter of 2008, it said.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

Forecasts are sadder
Lithuania's gross domestic product is expected to slump by 18.2 percent this year and fall by a further 4.3 percent next year before recovering in 2011. The Finance Ministry made this forecast in a draft revised budget for 2009, which was approved by the Cabinet on Wednesday. The ministry in March forecast a 10.5 percent GDP contraction for this year, but Prime Minister Andrius Kubilius has said recently that the Bank of Lithuania's latest forecast of a 15.6 percent GDP decline seems to be more realistic. The ministry earlier predicted that the economy would shrink by 2.3 percent in 2010. The European Commission in May forecast an 11 percent GDP contraction for Lithuania in 2009 and a 4.7 percent drop in 2010. SEB Bankas predicted in March that the economy would shrink by 9 percent this year and by 3.5 percent next year. Swedbank said in April that it expected the rate of GDP decline to reach around 13 percent in 2009 and slow down to 3 percent in 2010. DnB Nord Bankas' latest forecast is for a 12 percent contraction. The online news portal quoted Jekaterina Rojaka, the bank's analyst, as saying that this scenario was an optimistic one and would only be valid if signs of recovery in the worlds' major economies did not turn out to be short-lived.
Lietuvos Rytas, Verslo Zinios

Electricity from Latvia
Lithuania is importing the largest amount of electricity from Latvia during the second week after the switch-off of Ignalina Nuclear Power Plant (INPP). About 34 million kWh of electricity will be imported from Latvia on Jun. 13-20, Darius Masionis, CEO of Lithuania's power transmission system operator Lietuvos Energija (Lithuanian Energy) has said. Imports from Nord Pool market will total 16.3 million kWh, from Estonia - 1 million kWh and from Russia - up to 32.9 million kWh during the period. "Latvenergo, the largest Latvia's electricity producer, has put a new gas turbine into operation, and the country could now supply up to 67.2 million kWh per week, if necessary", Masionis said. Meanwhile, Estonia's power producers had launched the maintenance of their power plants' units since INPP, based on an initial plan, was to be switched off for maintenance only in September, he added. The sole operating unit of INPP, which supplies about 70 percent of electricity consumed.

Wednesday, 17th of June

Will employ 250 of people
An IT unit of UK's Barclays bank due to be established in Lithuania will employ domestic experts, yet the search for employees could be expanded to include Latvia, Estonia and Poland, if necessary. Strategic Staffing Solutions International, an international company in charge of search for workforce for the unit, reported on Tuesday that the center would employ 250 IT professionals. The center will render services to Barclays' retail and corporate banking operations, and its employees will be responsible for the IT infrastructure of the bank's units, its improvements, installation of new systems, support of data and voice transmissions, and network security. "This will give a chance to the professionals to contribute to the projects, which Lithuania has never had - either in terms of scale or the opportunities offered," Andrius Francas, the head of Strategic Staffing Solutions International operations in Lithuania, said in a statement.
Lietuvos Rytas, Verslo Zinios

Housing prices fall
Housing prices in Vilnius are falling for the 12th consecutive month and across Lithuania - for the 15th month in a row, the Center of Registers has reported. The prices of new construction apartments declined by 13.5 percent in Vilnius in the first half of this year, compared with the year-earlier, and by 23.5 percent in the rest of the country. The prices of flats on the secondary market shrank by 27.5 percent and 33 percent, respectively. Spending on the purchase of accommodation plummeted by almost 4.5 times this year, to LTL 0.4 billion, from LTL 1.8 billion a year earlier, the center said citing preliminary estimations. The drop in prices was the most pronounced on the secondary market for detached houses in Vilnius - at 51 percent in the first half of the year and as much as 75 percent in the second quarter alone.
Lietuvos Rytas, Verslo Zinios

Dependence dropped
Lithuania's energy dependence on imports declined to 58 percent last year from 60.8 percent in 2007, preliminary data from the Statistics Department showed on Tuesday.
The use of local and renewable energy resources in Lithuania increased last year amid rising prices for imported fuels, it said. Local and renewable energy resources last year accounted for 11.4 percent of the country's primary energy resources, up from 11.1 percent the previous year. The number of local power plants producing electrical energy from renewable sources reached 119 at the end of last year. Wind power generated electricity accounted for 1 percent of the country's total electricity production. Natural gas accounted for 27.9 percent of the total primary energy resources, down from 30.9 percent in 2007. The import and consumption of natural gas declined by 16 percent in 2008 compared with 2007 to 3.1 billion cubic meters. Nuclear power accounted for 26.8 percent of Lithuania's primary energy resources in 2008, up from 26.1 percent in 2007. The Ignalina Nuclear Power Plant last year generated 71.1 percent of the country's electricity.
Lietuvos Zinios

Tuesday, 16th of June

Expect for deflation
Consumer prices will shrink by 0.2 percent in Lithuania in June versus May, the country's Statistics Department projects. Harmonized annual inflation is expected to reach 4 percent in June, while the twelve-month average should be 8.6 percent. Consumer prices would be weighed down by the declines in the prices of food, clothing and footwear, the department said. Price changes in other groups of goods and services would be minor and would not have any significant effects on the consumer price index. However, the overall decline in prices would be slowed down by the rise of petroleum products prices. In May, compared with April, consumer prices in Lithuania, as estimated on a harmonized basis, slipped by 0.2 percent. Harmonized annual inflation totaled 4.9 percent and the twelve-month average was 9.3 percent.
Lietuvos Rytas, Verslo Zinios

The number of Verslo Zinios
The Lithuanian state social insurance fund Sodra on Monday transferred LTL 137.5 million into second-pillar pension funds, down 48.5 percent from LTL 266.83 million a quarter ago. The money represents contributions by 956,400 pension scheme participants for the first quarter of this year, Sodra said. The rate of employees' contributions to private second-pillar pension funds was cut to 3 percent of a salary at the start of this year, down from the previous 5.5 percent.
Verslo Zinios, Lietuvos Rytas

Raised bonds
Lithuania on Monday raised EUR 500 million through a Eurobond issue on international markets. The issue, which matures in 2014, carries an annual coupon of 9.375 percent, the Finance Ministry said. "The successful placement of our securities issue in foreign markets shows investors' confidence in Lithuania and their approval of the measures that are being implemented by the country's government," Finance Minister Algirdas Semeta said in a press release. The Finance Ministry said that yields on Lithuania's Eurobonds maturing in 2016 in the secondary market ranged between 9.2 percent and 9.8 percent, but only small transactions are concluded at this price. It said a higher yield than those quoted in the secondary market had to be offered in order to attract larger investors. "The situation in the financial markets is not stable yet and yields sought by investors remain at relatively high levels, but the very fact of the Eurobond placement is a very positive sign, both for us and for other countries in Central and Eastern Europe," Semeta said.
Verslo Zinios Lietuvos Rytas, Respublika

Monday, 15th of June

Estonia dropped the most
Annual drop in Lithuania's industrial output was one of the sharpest across the European Union (EU) in April, the Eurostat reported. The output of Lithuania's industry contracted by 24.5 percent in April, year-on-year. The decline was only larger in Estonia (33.7 pct) and Slovenia (24.9 pct), the EU statistics office said. In April, compared with March, Lithuania's industrial output shrank by 1 percent. The largest monthly increase in output was registered in Latvia (4.8 pct) and the largest decline was in Slovenia (3.8 pct). Across the EU, industrial output shrank by 19.3 percent in April year-on-year, and eased by 0.9 percent versus March.
Verslo Zinios

Number of Verslo Zinios
Lithuania's mail and courier services market, as measured by revenues, contracted by 10.6 percent, to LTL 56.2 million in the first quarter of this year, from LTL 62.9 million in January-March 2008, the Communications Regulatory Authority reported on Friday. The revenues of mail service providers rose by 1.4 percent, to LTL 24.9 million, while the revenues of courier services providers declined by 18.3 percent, to LTL 31.3 million in the reporting period.
Verslo Zinios

Lithuanians were drinking less last year
The average per capita consumption of alcohol in Lithuanian last year reached 11.2 liters of absolute alcohol, including illegal drinks, down from 11.3 liters in 2007, preliminary data from the Statistics Department showed on Friday. Alcohol consumption per person aged 15 years and over declined to 13.3 liters last year from 13.4 liters in 2007, it said. The average per capita consumption of alcohol amounted to 11 liters in 2006, 10.7 liters in 2005, 10.4 liters in 2004, 10.2 liters in 2003, and 10 liters in 2002 and 2001 each. The total production of spirits, as measured in absolute alcohol, declined by 16.8 percent in 2008 compared with 2007 to 15 million liters. Retail prices for alcoholic beverages last year rose by 12.6 percent.
Verslo Zinios

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