Lithuania Business News: Archive 2003-
Saturday, 29th of August
Trade is declining
Combined turnover of Lithuania's retailers, ex VAT, totaled 15.45 billion litas (EUR 4.48 b) in the first seven months of this year, down 28.5 percent from the year-earlier figure, the country's Statistics Department reported on Friday citing preliminary estimations. In July alone, the retail sales rose by 3.1 percent, month-on-month, to LTL 2.304 billion. Compared with July 2008, the combined turnover of retail companies plunged by 27.1 percent (at comparative prices) last month.
Will not go bankrupt, are choosing investments
Sales of strong alcohol drinks has declined twice in two years and this year it has reduced by a third but sellers are attempting to attract their clients, who prefer illegal alcohol, by new tastes and are choosing investment. Sector of strong alcohol drinks production is probably the only production sector in Lithuania which has avoided a wave of bankrupts. At the moment in order to keep declining market, they are paying much attention to investments into new products and appearance of a product.
NDX Energija is objecting to a decision to liquidate LEO LT and blaming the Government for violation of duty of cooperation; therefore, the company has presented the written claim to the Government. This means that both parties have to start negotiations at once. Petras Jasinskas, the Director General of NDX Energija, is offering to organize a meeting with the Minister of Energy Arvydas Sekmokas by September 1. The heads of the company are suggesting the Government to sign an agreement, by which the parties would return to the position as before establishment of LEO LT: NDX Energija would return 38.3 percent of LEO LT stocks for their emission price and would retrieve 97 percent of VST stocks.
Lietuvos Rytas, Lietuvos Zinios
Friday, 28st of August
The Statistics Department announced that Lithuania's economy contracted less sharply in the first half and in the second quarter than previously estimated. Year-on-year, the country's gross domestic product declined by 20.2 percent in the second quarter, down from 22.4 percent. In the second quarter compared with the first quarter, the economy grew by 1.8 percent, a revision from a 1.1 percent decline reported earlier. In the second quarter compared with a year ago, all business activities and non-market services showed a decline. The construction sector posted the biggest slump at 46.1 percent, followed by industry and energy (25.3 percent), trade, transport and communication services (21.4 percent), and financial intermediation and real estate services (17.8 percent).
Respublika, Lietuvos Rytas
Will fight in courts
Lithuania's power distribution company VST, a subsidiary of Leo LT, has asked the court to seize the shares in the national energy holding company controlled by NDX Energija. On Wednesday VST filed a lawsuit with the Vilnius regional court seeking LTL 520.831 million in damages from NDX Energija, the private shareholder of Leo LT. According to the lawsuit, NDX Energija transferred the bank loans it had taken out to pay for the state-owned shares in VST, which then operated under the name of Vakaru Skirstomieji Tinklai, to the newly-acquired company after the privatization was completed. "Thus, the acquisition of VST was actually financed by VST itself rather than by NDX Energija. In the opinion of VST, this violated the provisions of the Law on Companies and of EU directives which prohibit a company from using its funds to finance the acquisition of its own shares," VST said in a statement to the NASDAQ OMX Vilnius stock exchange on Thursday.
Respublika, Lietuvos Rytas
Insurers are calculating profit
The Insurance Supervisory Commission (ISC) reported that Lithuanian-registered insurance companies have posted LTL 106 million in aggregate net profits for the first half of this year, up from LTL 56 million in the same period last year. Six non-life insurers and four life insurers ended the first half with a profit, while four non-life insurers and two life insurers recorded losses, it said. The industry's first-half profits from investment activities reached LTL 64 million. Profits from insurance operations rose by 7 percent year-on-year to LTL 46 million. Year-on-year, life insurers' profits for the first six months doubled to LTL 33.9 million. Nearly 70 percent of the profits, LTL 23.2 million, came from investment activities.
Verslo Zinios, Lietuvos Rytas
Thursday, 27th of August
Business reacted earlier than government
The Statistics Department reported that the average monthly gross pay in Lithuania contracted by 0.9 percent in the second quarter of 2009 from the previous quarter, to reach LTL 2,172.6 on Wednesday. The average net monthly salary declined by 0.9 percent, to LTL 1,687.1. Lina Vrubliauskiene, an analyst with Swedbank, maintains that the average wages will contract by some 10-12 percent this year getting back to the level of 2007. The Statistics Department reported earlier that the average monthly gross pay in Lithuania (excluding sole proprietorships) contracted by 2.9 percent in the second quarter of 2009 from the year earlier, to reach LTL 2,172.6. The average net monthly salary declined by 1.5 percent, year-on-year, to LTL 1,687.1.
Verslo Zinios, Lietuvos Rytas
Diena Media News CEO Robertas Berzinskas has claimed that bankruptcy proceedings that are being initiated against Diena Media, a media subsidiary of the Lithuanian investment company Hermis Capital, will have no impact on the newspapers published by Diena Media News. Diena Media News publishes the daily newspapers Vilniaus Diena, Kauno Diena and Klaipeda.
Lithuania asks for advice of IMF
Lithuania has asked experts of the International Monetary Fund (IMF) to provide recommendations on more efficient tax administration as Vilnius seeks to mitigate the negative effects of the shadow economy on budget revenues and improve the collection of taxes. Finance Minister Ingrida Simonyte on Wednesday met with the representatives of the IMF technical assistance mission, which will work in the country for a couple of weeks. Proposals on how to improve the collection of taxes should be worked out in the first half of September, the Finance Ministry said in a statement. The IMF experts would cooperate directly with the State Tax Inspectorate (VMI) and to some extent with the social insurance fund (Sodra).The experts are expected to evaluate the current state of tax administration and submit proposals on how to strengthen that area during economic downturn and what measures should be taken in order to offer easier terms for taxpayers facing temporary difficulties with the payment of taxes.
Wednesday, 26th of August
Conversations will become more expensive
Lithuanian mobile connection companies do not promise to compensate their clients increase of VAT. From September VAT will be increased by 2 percent: from 19 percent to 21 percent. Omnitel, Bite and Tele2 will increase price of their services by 2 percent.
Doubts regarding price
Martynas Cesnavicius, a member of Teo LT board, thinks that the board of Lithuania's integrated telecommunications company Teo LT should rely on a conclusion of external experts on the actual price of the company's shares when stating its opinion on the offer by Sweden's TeliaSonera to buy out other shareholders in its Lithuanian unit. He states that the buyout price being offered seems to be at odds with the market prices of the telecommunications companies active in the European Union. TeliaSonera reported on Monday that it would announce a voluntary tender offer to buy out other shareholders in the Lithuanian company paying LTL 1.83 per share.
Profit of Sanitas group declined eight times
Sanitas group posted LTL 2.474 million in unaudited consolidated net profit for the first half of this year, down 8-fold from the year-earlier figure of LTL 19.975 million. Kaunas experienced LTL 6.361 million losses in the first half-year which is 3.3 times more than during the same period last year. Income of the company declined 2.2 times up to LTL 7.511 million. Sanitas indicated that production income has declined because the company stopped production in the old plant accommodation in the first half-year last year. Production in a new plant will start in the third quarter this year.
Tuesday, 25th of August
Swedish’s offer has puzzled
Sweden's TeliaSonera aims to acquire more than 35 percent of Teo LT, thus raising its stake in Lithuania's telecommunications company to 100 percent. TeliaSonera, currently the largest single shareholder of Teo LT, will pay LTL 1.83 per share. Teo LT, which is quoted on the Main List of the NASDAQ OMX Vilnius Stock Exchange, traded for LTL 1.4 last week. TeliaSonera on Monday also revealed its intentions to acquire the remaining shares in Eesti Telekom as well.
Contract regarding Klaipeda arena has been signed
The company Vetruna has undertaken to build Klaipeda arena in 16 months. The cost of construction is LTL 54.7 million. Aloyzas Kazdailevicius, the head of administration at Klaipeda municipality, has admitted that there were doubts if the company would be able to perform construction works with this sum of money. Last year the municipality calculated that the construction of arena might cost about LTL 100 million. It was expected that this sum will decline by a third because prices of construction works and materials have decreased.
Verslo Zinios, Lietuvos Rytas, Respublika
List of unreliable carriers is becoming shorter
The head of national association of road carriers Linava Algimantas Kondrusevicius informed that Lithuanian customs have sent a request to Russian customs asking to remove three of the country's transport companies from the so-called black list, which was drafted to include what Russian customs claimed to be unreliable Lithuanian carriers. The said list includes 29 companies, 13 of which have made no violations, are reliable. The customs procedures on the border with Russia are at this time are on par with what they were prior to introducing the stricter customs checks. Russia's customs agency later agreed to revoke the stricter customs procedures for Lithuanian carriers in exchange for restricting of Russia-bound operations for 29 Lithuanian transport companies.
Monday, 24th of August
Fines for violators
179 high-handed constructions were detected in the first half-year, which is by 34 percent more than last year. Violators were punished by LTL 187,750 fines and 144 violators were obliged to destroy or reconstruct their buildings. Laura Nalivaikiene, the head of State Inspection of Territorial Planning and Construction Departament, has claimed that they are supervising how obligations are being implemented. Forced destruction procedures were not carried out. Owners themselves destroyed 30 buildings; at the moment 30 buildings are being pulled down.
Will help EU money
The Ministers of Finance of the Baltic States discussed that it is important for the Baltic States to use support of EU structural funds effectively in Tallinn on Friday. The priority of the next year is to re-establish trust in stability of public finances, which would strengthen foundation of economy revival in the Baltic States. The Ministry of Finance has announced that ministers Ingrida Simonyte, Einar Repse and Jurgen Ligi repeatedly emphasized objective to become members of euro zone as soon as possible.
Shipment in the port declined by 13 percent
Shipment declined by 13.3 percent in Klaipeda State Seaport and Butinge Terminal in the first seven months this year in comparison with the same period last year. There were by 15.7 percent less (15.4 million tons) cargoes in Klaipeda State Seaport; number of cargoes in Butinge Terminal declined by 4.7 percent up to 4.9 million tons.
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