Lithuania Business News: Archive 2003-
Saturday, 5th of September
Shot by blanks
The shareholder meeting of Leo LT decided on Friday, September 4, to liquidate the energy holding company. NDX Energija, did not approve of a draft resolution proposed by the government, but it did not have enough votes to block the decision. Ignas Staskevicius, the head of NDX Energija, maintained after the shareholder meeting that his company did not support the liquidation scenario proposed by the government, which it regards as "a political declaration." "Based on my calculations and on data from Lietuvos Energija (Lithuanian Energy), the separation of the [Kaunas and Kruonis] power plants will not be completed until next May. This means that the scenario proposed by the state would not occur for least another year," the head NDX Energija said. "This is a political declaration adopted by the government with its own votes alone. No actual liquidation has got underway. The status of the company has not been changed to that of a company undergoing liquidation and no liquidator has been appointed," he said.
Lietuvos Rytas, Lietuvos Zinios, Respublika
Level of unemployment is 13.6 percent
The Statistics Department reported that Lithuania's unemployment level rose to 13.6 percent (223,000 unmeployed) in the second quarter of this year. It noted that the rate of growth in the number of people out of job and in the unemployment level had slowed down somewhat. The unemployment level grew by 1.7 percentage points in the second quarter from the first quarter following a 4 percentage point increase in the first quarter from the fourth quarter of last year. The statistics office said that the continuing economic downturn and a marked decline in the number of job vacancies continued to have an adverse effect on the labor market.
Amount of shipments has increased
The Port Authority reported that cargo traffic through the Lithuanian port of Klaipeda contracted by 13.7 percent or 2.83 million tons, to 17.84 million tons in January-August. In August alone, overall cargo traffic via the port increased by 1.2 percent, to 2.46 million tons. The results of this August have been the best this year.
Friday, 4th of September
Half does not receive loans
About a half of Lithuania's small and mid-scale companies (SMEs) applying for business support are refused loans by domestic commercial banks, Economy Minister Dainius Kreivys has said. "About 50 percent of companies do not get credits - five in ten companies are refused a loan, and this figure is even worse in certain banks," stated Kreivys. According to Nijole Uinskiene, the chairperson of Business Development Committee of Lithuanian Business Employers’ Confederation, at the moment conditions offered by bank do not satisfy companies.
Number of arrests is declining
The number of arrests of company asset has been declining fast in recent months. According to the data of Creditinfo Lietuva, this rate reached the highest level this May (3,393), which was higher by 4.4 tomes than last May (778). However, this number has slumped by almost 72 percent in the latter five months and reaches only 1,987. Alina Bueman, the head of Credit Risk of Creditinfo Lietuva, has stated that change in statistics of asset arrest, proves that, having experienced deficit of circulating asset in winter, business has been recently attempting to rise or not to decline further.
Respublika, Verslo Zinios
EU has fed guarantee fund
Ministries of Finance and Economy and the company Investiciju Ir Verslo Garantijos (INVEGA) (Investment And Business Guarantees) established a general Guarantee Fund and allocated LTL 129 million finances from EU structural funds. It is stated that this fund will compensate 80 percent of guarantee payouts allocated for finance institutions for loans taken by small and medium-sized business. Finances of Guarantee Fund will be administered by INVEGA. INVEGA will be able to provide more individual guarantees for credit institutions. According to the Minister of Economy Dainius Kreivys, Guarantee Fund is the last means for developing business financing possibilities.
Verslo Zinios, Respublika
Thursday, 3rd of September
Received less income
Lithuania's Klaipedos Nafta (Klaipeda Oil), the state-run oil products terminal, posted LTL 74.7 million in revenues for the first eight months of this year, down 8.3 percent from the year-earlier figure of LTL 81.5 million. In August alone, the revenues shrank by 2.6 percent, year-on-year, to LTL 7.5 million, the company said in a statement to the NASDAQ OMX Vilnius Stock Exchange. Last month the terminal handled 539,700 tons of petroleum products, down 13.7 percent from the year-earlier figure of 625,700 tons.
Taxes cause most troubles
More than a third of Lithuania's companies consider taxes as the biggest obstacle to doing business, the poll commissioned by the World Bank and the European Bank for Reconstruction and Development (EBRD) has shown. The poll was carried out early this year, and now the share of companies discontent with taxes should be much larger, stated Inga Nausediene, chairwoman of the polling company RAIT. "The poll of corporate executives was carried out late in 2008 - early in 2009. The authorities then took a decision to raise the VAT rate to 19 percent. Quite a significant part of executives then said that the tax rates were the biggest obstacle to their business and the activities of their companies. I am sure that the number of executives considering taxes as the biggest obstacle to doing business has grown considerably by now," she said in a statement. Some 36 percent of 276 executives polled singled out tax rates as the biggest obstacle to doing business. About 13 percent mentioned shadow rivals, 12 percent - access to financing and another 12 percent - political instability in the country.
Lietuvos Gelezinkeliai will cooperate with Ukrainians
The state railway operator Lietuvos Gelezinkeliai (Lithuanian Railways) and Ukraine's logistics company Plaske intend to expand freight transportation by the container train service Viking to other countries in the regions of the Black and Baltic Seas. The companies have signed a freight forwarding contract, Lietuvos Gelezinkeliai said in a press release on Tuesday. Plaske President Oleg Platonov stated that there wass interest in moving goods by the Viking train from Georgia, Armenia, Iran and other countries. According to the press release, document processing at Odessa's Ilyichevsk port and slow freight handling are among the main reasons preventing full use of the Viking's potential. It is expected that the opening of a new freight terminal will help solve these problems. The new terminal, which is slated to begin operating next January, will have a connection with the main railway routes. The terminal will have an initial capacity to handle 430,000 TEU containers annually, which will be expanded to 2 million units in 2013.
Wednesday, 2nd of September
Cars do not interest
A total of 5,980 new cars were registered in Lithuania in January through August, down 69 percent from nearly 19,200 registrations in the same period last year. The market research company AutoTyrimai reported that in August alone, the new car market slumped by 63 percent year-on-year to 565 units.
Post is loss-making
Lithuania's state postal operator Lietuvos Pastas (Lithuanian Post) suffered a loss of LTL 10.3 million in the first half of this year. Lietuvos Pastas' management board evaluated result as satisfactory and did not discuss any changes in the company's management.
Profit of company will grow two thirds
City Service, the Baltics' leading property maintenance and administration services provider, posted LTL 6.17 million in consolidated net profit in the first half of this year, up 31 percent from the year-earlier figure of LTL 4.7 million. Consolidated six-month revenues rose by 24 percent, to LTL 140.8 million, from LTL 114 million in January-June 2008. "According to our plans, in 2009 the revenues of the group will increase by 44 percent versus last year, to LTL 382 million," City Service CEO Zilvinas Lapinskas said in a statement. In 2008 the revenues of the group totaled LTL 264 million. The net earnings planned for 2009 should reach LTL 13.5 million, up 56 percent from the 2008 figure of LTL 8.6 million. City Service also expects its operations in Russia to become profitable this year as a result of the sale of three of its nine utilities' services companies in St. Petersburg.
Tuesday, 1st of September
Company group of the bank Snoras earned LTL 1.75 million of net profit in the first half-year, whereas during the same period last year the group earned LTL 41.395 million of net profit. However, the bank earned LTL 23.984 of net profit in January-June which is by 35 percent more than in the first half-year last year.
Vilnius Prekyba group is changing
The group of ten owners of the Baltic's largest retail chain Maxima, the so-called VP Ten, is breaking up, Nerijus Numavicius, its main shareholder, has confirmed, but said he will make no comment until the process is over. Two members, Darius Nedzinskas and Zilvinas Marcinkevicius, have already left the group. Nedzinskas has publicly confirmed that he will sell his shares in VP Grupe. Vilniaus Prekyba was owned by the following ten private individuals: Nerijus Numavicius, Zilvinas Marcinkevicius, Mindaugas Marcinkevicius, Ignas Staskevicius, Julius Numavicius, Renatas Vaitkevicius, Gintaras Marcinkevicius, Mindaugas Bagdonavicius, Vladas Numavicius and Darius Nedzinskas.
Vilkyskiu Pienine (Vilkyskiai Dairy), one of Lithuania's most technologically advanced dairy producers, posted LTL 3.06 million in net profit for the first half of this year, reversing the year-earlier losses of LTL 6.946 million. Consolidated six-month revenues rose by 6 percent, year-on-year, to LTL 70.703 million. Representatives of the company explain that renewed support of EU for producers of dairy products have had positive impact on company results. However, the situation in the market is still complicated because there is no significant increase of prices of dairy products and demand. The company expects to receive small profit in the second half-year in 2009.
Monday, 31st of August
After strike drivers are being fired in Kaunas
Kaunas trolleybus drivers have not agreed to work for lower salary and have been on strike two times. Now they have found out that 40 of them will lose their jobs. The company Autrolis is planning to fire 88 employees. Mindaugas Legas, the Director General of Autrolis, has announced that in this way it is intended to reduce expenses and save the company from bankruptcy. Due to increased VAT, the budget of the company will lack additional LTL 12 million. Petras Balsaitis, the chairperson of Trade Union of Kaunas Trolleybus Drivers, is convinced that the heads of the company are attempting to intimidate drivers and are not planning to fire employees.
Lietuvos Rytas, Respublika
Price of cigarettes is increasing, smugglers are becoming richer
Tomorrow Lithuania will lose a name of the country of the cheapest cigarettes in the EU as the excise of cigarettes will be increased. The price of the most popular cigarettes will increase from LTL 6.1 to LTL 7.6 However, it is doubted whether additional LTL 75 million will supplement state budget. According to the data of TNS Gallup, every fourth pack of cigarettes was brought into Lithuania market illegally. Supposedly, contraband part constituted 21 percent in 200r. Lithuanian customs officers detained 2.8 million packs of cigarettes in seven months of this year, whereas in 2008 the officers detained only 1.45 million packs of cigarettes. Moreover, shadow businessmen start to apply discounts for clients who buy bigger amounts of cigarettes. Renata Saulyte, the representative of Maxima LT, states that use of cigarettes has declined, whereas wholesale slumped by about 50 percent.
Lietuvos Rytas, Respublika
Teo connected Kalinngrad
TEO LT has signed a contract with one of the biggest Russian telecommunication companies Synterra regarding providing of service of transit data transmission. Infrastructure managed by TEO joined networks of Synterra in Kaliningrad district with networks in Latvia which are rented by this Russian company. Synterra is using these networks for services of voice telephony, internet and data transmission. These connectors also allow TEO to provide services of data transmission of higher quality for clients in Lithuania and Russia.
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