Lithuania Business News: Archive 2003-
Saturday, 8th of August
Banks against current
Prices of most goods and services are declining but banks are behaving differently: prices of financial services have increased almost by 1.5% in a year in Lithuania. SEB bank maintains that not all services have become more expensive; prices of some services have even decreased. Arvydas Zilinskas, the representative of SEB bank, claims that some prices have not been changed since 2006. The representatives of Swedbank have similar statements; they state that prices of the most popular services are not increasing. Nordea bank and Danske bank explain that the payment for cash withdrawal, which has recently been introduced, should cover increased investment into development of ATM network. Snoras bank asserts that some payments, like for example, payment for utilities, have been even reduced. It is also informed that transfer of money from DnB NORD bank to other bank costs LTL 10 for those who do not have an account in DnB NORD bank.
Woodsheds are prepared for cold season
Supposedly, most residents are afraid of heating season, thus they are starting to take care of purchase of cheaper fuel. Traders claim that demand of coal and sawdust briquettes is increasing in Lithuania this year. The sellers of coal state that price of this fuel may increase much this autumn; therefore, people are hurrying to buy it. According of foresters, prices of firewood has declined a little this year because prices of all wood have decreased. Residents are also buying briquettes actively this year. Companies are purchasing more wood this year because there is a market for wood in Western Europe.
Serial of holidays in the port
Companies which organize events in Klaipeda do not complain about lack of work this year; most events are organized in transport and port companies. It is claimed that the events Europiada and The Tall Ships Races, which have recently taken place in Klaipeda, involved almost all entertainment businesses in this town. However, it is unlikely that the events were profitable to them. It is stated that one of the best clients for companies which organize events is the company Vakaru Laivu Gamykla (West Ship Plant) which has been awarded as Lithuanian Exporter of The Year because its export constituted 87% of sales, more than LTL 350 million. Its turnover was LTL 400 million last year.
Friday, 7th of August
Hope for better second half
The Bank of Lithuania forecasts that the country's gross domestic product will contract by 19.3 percent this year and by 5.2 percent next year. The previous forecasts released by the central bank in May were -15.6 percent and -4.5 percent, respectively. In its latest economic outlook report published on Thursday, the Bank of Lithuania left its average annual inflation projection for 2009 unchanged at 3.9 percent. It predicted that the country would see deflation of 2 percent in 2010, compared with its previous 2.1 percent deflation forecast for the year. Unemployment is expected to grow to 15.7 percent this year and by 19.3 percent next year, up from 11.6 percent and 13.4 percent forecast in May, respectively. Wages are expected to fall by 9.8 percent and 8.1 percent, compared with the previous forecasts of 12.3 percent and 5.2 percent, respectively, according to the report.
Will provide a loan
The European Bank for Reconstruction and Development (EBRD) will extend to Lithuania's Siauliu Bankas a convertible loan in the amount up to EUR 30 million. The board of EBRD had already approved the loan, Siauliu Bankas reported. The funds would be allocated for the financing of small and mid-scale business and development of infrastructure projects implemented by private or public companies of particular importance for local authorities and regions, the bank said. "Some part of this loan, if necessary, could be converted into the bank's shares if the shareholders decide to issue new stocks. This, of course, will contribute to the strengthening of the bank's capital base and its credibility and the stimulating of its growth," the statement quoted Algirdas Butkus, the bank's chairman, as saying. Support to small and mid-scale business and provision of favorable conditions for getting loans amid existing economic difficulties was one of the key priorities for EBRD, Nick Tesseyman, the EBRD's Business Group Director for Financial Institutions, said.
Lietuvos Rytas, Verslo Zinios
Buys four Boeings
Avia Asset Management, the aircraft leasing arm of Lithuania's aviation group Avia Solutions Group, is set to buy four more Boeing 737-300 airplanes. Avia Asset Management would pay up to LTL 80 million for the purchase. The deal would be financed by the US companies and financial institutions, it said in a statement. Moreover, the Lithuanian company has already agreed with two air carriers registered in the CIS region on the lease of those planes. Avia Asset Management now owns 12 aircraft (by title or trust) worth more than LTL 300 million. The company's airplanes have been leased by the air carriers of Kazakhstan, Slovakia, Estonia, Lithuania, Italy and Denmark. This year the number of aircraft of Avia Asset Management is set to grow to some 20-23 units.
Thursday, 6th of August
Life in debt is ahead
The Lithuanian Finance Ministry has worked out a preliminary budget for next year with a deficit of nearly LTL 6 billion. The draft budget projects total revenues of around LTL 20.4 billion, including EU support funds, and expenditures of LTL 26.3 billion. This year's revised budget targets revenues of LTL 20.814 billion and expenditures of LTL 25.635 billion. "I don't know what we should do to meet the Maastricht criteria in 2010 -- this is absolutely hopeless at the moment," the paper quoted Finance Minister Ingrida Simonyte as saying. The minister said that as far as the 2010 budget was concerned, the key tasks were to check the deficit growth and to narrow the gap in the budget of the state social insurance fund Sodra, as well as to launch structural reforms in various areas. "This would make budget consolidation in 2011 somewhat easier," she said. The ruling coalition's deputies in the Seimas (parliament) see room for improving the budget, but agree in principle that the initial draft reflects the economic reality.
Respublika, Verslo Zinios
Revival seeds encourage new investment strategies
Lithuanian analysts are not as pessimistic as a half-year ago. Analysts of Swedbank do not forecast fast growth of markets. According to Darius Slavinskas, the broker of Swedbank, thinks that revival of economy is not stable because it needs some years to equilibrate after long-term growth. Deimante Teresiene, the broker of Ukis bank, supports proponents of gradual revival of economy and advises to increase a part of stocks in portfolios. Better economic rates show that possibly stock market will revive. Marius Dubnikovas, the finance broker and the head of FMI Snoras - Jusu Tarpininkas, comments that growth of stock prices, which has been continuing for five months, seems stable.
Evaluated bank’s results
Rokiskio Suris (Rokiskis Cheese), the leading Lithuania's dairy company, reported LTL 325.189 million in consolidated sales for the first seven months of this year, down 14.5 percent from the year-earlier figure of LTL 380.361 million. In July alone, the sales of the group declined by 18.76 percent, year-on-year, to LTL 51.601 million, the cheese maker said in a results statement. The dairy producer posted LTL 18.327 million in losses for the full year 2008. Its annual revenue rose by 2.5 percent to LTL 681.821 million. Rokiskio Suris CEO Antanas Trumpa and Pieno Pramones Investiciju Valdymas, a company controlled by Trumpa, held 48.85 percent of Rokiskio Suris' stock at the end of last year.
Wednesday, 5th of July
Georgia's air carrier Euroline, which aims to launch regular flights between Tbilisi and Vilnius, has already published the schedule of flights to the Lithuanian capital and ticket prices on its website despite it has not yet been granted a permission to operate flights to Lithuania. Euroline has said on its website that it intends to launch regular flights on August 25. The company had not yet applied to the Lithuanian Civil Aviation Administration for a permission to launch regular flights on that route, Alvydas Sumskas, deputy director of the administration, said. Such a permission could be issued in up to three days, he added. Now bankrupt Lithuania's air carrier FlyLAL-Lithuanian Airlines used to operate twice-weekly flights to Georgia's capital. Latvia's Airbaltic also offered flights to Tbilisi. Euroline, based in the south-western part of Georgia, offers regular flights to Varna, Dusseldorf, Istanbul, Charkiv, Kiev, Odessa, Dubai.
Grew abroad, fell in Lithuania
Interneto Partneris, the operator of airline ticket portal greitai.lt, posted LTL 21.97 million in revenues in Lithuania in the first half of this year, down 9 percent from the year-earlier figure of LTL 24.7 million. Consolidated turnover of the company shrank by 4 percent, to LTL 41.822 million, from LTL 43.5 million in January-June 2008, Interneto Partneris said in a statement. The turnover of the company's Latvian portal flysiesta.lv grew by 15 percent, year-on-year, to LTL 4.5 million in the reporting period. The turnover of Estonia's bookinghouse.ee soared 73 percent, to LTL 11.6 million, while Poland's flysiesta.pl saw its interim turnover decline by 25 percent, to LTL 3.059 million. "In our view, the financial results are positive, especially when considering a 20 percent contraction of the market for airline tickets sold at Lithuania's travel agencies this year. Moreover, we managed to achieve significant growth in Latvia although that market declined almost by half. In Estonia the results are even more impressive - our revenues soared by 73 percent although the market contracted by one-third," the statement quoted Interneto partneris CEO Vladas Sapranavicius as saying.
LTL 682.8 million are invested
Investments into transport projects as outlined in Lithuania's public investment program totaled LTL 682.8 million, including LTL 298.8 million in the European Union (EU) structural support funds, in the first half of this year. "Investments into transport infrastructure is a real contribution into stimulating Lithuania's economy and helping the country to survive through the downturn. Although the companies implementing transport projects encounter great difficulties, the funds being invested enable them to maintain operations and keep jobs while the taxes they pay boost the revenues of the budget," Transport Minister Eligijus Masiulis said in a statement. The major part of funds LTL 627.1 million - was assigned for road infrastructure projects. Funding for roads from the Road Maintenance and Development Program has been slashed more than twofold, to LTL 775 million this year, from LTL 1.813 billion in 2008.
Tuesday, 4th of August
The number of unemployed increases
Another 6,300 people were registered as unemployed in Lithuania last week, down 6 percent from 6,700 people registered a week earlier, the country's Labor Exchange said on Monday. The total number of people with the status of unemployed persons reached 208,500 as of July 31 (down from 208,700 a week earlier), which accounted for 9.74 percent of the working age population. Some 1,543 job vacancies were registered in July 24 through 31, up 27 percent from 1,213 vacancies a week earlier. Some 3,300 persons got employed, up 27 percent compared with the previous week. There were around 1,200 vacancies in the Labor Exchange database on July 31. Lietuvos Rytas
Apranga, the leading clothes retailer in the Baltics, posted LTL 219.4 million in sales for the first seven months of this year, down 19.8 percent from the same period last year. In July alone, the sales of the group shrank by 20.5 percent, year-on-year, to LTL 31.7 million, Apranga said in a statement. The retailer's sales in Lithuania and Latvia went down by 21.6 percent and 28.2 percent, respectively, in July year-on-year, while in Estonia the sales increased by 8.1 percent. Apranga currently operates a chain of 118 stores in the three Baltic countries, of which 78 are in Lithuania, 31 in Latvia and nine in Estonia The group posted LTL 13.784 million in audited net profit for full 2008, down 46 percent from 2007, as its sales increased by 13.5 percent, to LTL 418.622 million.
Lietuvos Rytas, Verslo Zinios
Asset of collective investment undertakings increased
The aggregate assets of 36 collective investment undertakings registered in Lithuania totaled LTL 444.1 million at the end of June, up 22 percent or LTL 80 million from the end of the first quarter, the Securities Commission reported on Monday. The quarterly increase was the first after six consecutive quarters of decline, it said. Over six months, the aggregate amount of assets increased by 14.8 percent, from LTL 386.7 million at the end of 2008. The value of fund units increased by 19.73 percent on average in the second quarter. The change in the value of fund units was positive in all but one collective investment undertaking. The positive change exceeded 10 percent in 24 investment funds.
Monday, 3rd of August
Still is loss-making
Zemaitijos Pienas, the leading Lithuania's dairy company, cut consolidated losses by 5.5 times, year-on-year, to LTL 1.9 million in the first half of this year. The turnover of the group contracted by 20.5 percent, to LTL 186.8 million, Zemaitijos Pienas said in a statement. As of end 2008, Algirdas Pazemeckas, Zemaitijos Pienas CEO, held 44.15 percent of the dairy company, which is quoted on the I-List of the NASDAQ OMX Vilnius Stock Exchange. Other shareholders included the customers of Sweden's Skandinaviska Enskilda Banken (7.94 pct), Klaipedos Pienas (7.45 pct), Ona Sunokiene (5.4 pct).
Decreasing credit portfolio did not stop Snoras profit
Lithuania's commercial bank Snoras posted LTL 23.984 million in unaudited net profit for the first half of this year, up 35.4 percent, year-on-year. The net profit of the banking group, meanwhile, plummeted 9-fold, to LTL 4.172 million. The bank's assets totaled LTL 5.62 billion as of late June, up 1.3 percent versus early January. The shareholders' equity increased by almost 5 percent over the six-month period, to LTL 519.1 million, Snoras said in a statement. "Despite economic downturn, we worked intensively with the existing customers of the bank in the first half of the year. We restructured loans, reviewed loan repayment schedules, borrowed funds for turnover needs," the statement quoted Snoras' president Raimondas Baranauskas as saying. The loan portfolio of the bank shrank by 4.3 percent in the first half of the year, to reach LTL 2.811 billion as of June 30. The bank formed the provisions worth LTL 67.7 million, including LTL 42.5 million in provisions against bad loans, in the reporting period. The deposits' portfolio of the bank, meanwhile, expanded by almost 11 percent in the first half of the year, to reach LTL 4.264 billion at the end of June.
Statistical numbers will influence cafés in autumn
Despite the declining GDP, cafés in Vilnius are full of visitors, seaside is full of holidaymakers and the number of private deposits in banks is increasing. Vilija Tauraite, the chief analyst at SEB bank, states that decline of GDP is not felt in streets because such factor as unemployment is felt only after some time; it is a late indicator of business. Tauraite thinks that the situation in our environment will still get worse.
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