Lithuania Business News: Archive 2003-
Saturday, 7th of November
Will buy electricity
Lithuania's electricity transmission system operator Lietuvos Energija (Lithuanian Energy) has signed an agreement with Ukraine's Ukrenergy Trade ZRT on the supply of electricity in 2010. In line with the agreement, Lithuania might purchase up to 0.735 TWh of electricity or more, if necessary, Lietuvos Energija said in a statement. Lithuania plans to buy some 35 percent of its total electricity needs in 2010 under market conditions from Estonia, Latvia, Scandinavia, Ukraine, Russia and Belarus, as well as from local producers.
Lietuvos Rytas, Lietuvos Zinios
To Valley of the Kings on All Souls’ Day
Prices of winter season travels have decreased by almost a third due to Lithuanians’ changing travelling habits. More Lithuanians chose cheaper rest in Lithuania than abroad this summer, which shows that people are saving. Therefore, organizers of travels had to reduce prices. Marius Horbaciauskas, the general director of the travel agency Novaturas, has claimed that the beginning of trade of winter season travels was especially successful in July and August; the company sold by 40 percent more travels than during the same period last year. Irma Korsakaite, the head of marketing of the company Tez Tour, has maintained that the beginning of sale of winter season travels was optimistic as well. Korsakaite has emphasized that the quality of their services constancy improves.
Budget is declining but scopes are increasing
The journalist interviews Tomas Vaisvila, the general director of International Vilnius Airport, about present situation in the airport and his future plans and intentions regarding activity of this company. Vaisvila claims that prices of services and budget will be lower in 2010. His ambition is to raise level International Vilnius Airport to the level of European airports with regard to services, employees, motivation of staff and other things. He presents his plan how to cut expenses in the nearest future. Vaisvila is planning to reduce a number of employees, expenses of security and cleaning services.
Friday, 6th of November
Thicker pillow for GDP
Lithuania's economy will contract by 15.2 percent this year and by further 1.5 percent in 2010, the Bank of Lithuania has said citing its latest forecasts. In July the central bank projected a 19.3 percent contraction for 2009 and a 5.2 percent GDP decline for 2010. According to the central bank, the first estimate of third-quarter GDP as published by the Statistics Department exceeded the expectations as the annual decline of 14.3 percent was way smaller than anticipated. "Based on this data, the economy has reached the breakthrough point and has started to recover. Although the signs of stabilization may already be noticed in the economy, the economic recovery shown by the data is still being viewed cautiously," the Bank of Lithuania said in a statement. Jobless rate projections have been revised down to 13.9 percent, from earlier forecast of 15.7 percent, for 2009 and to 17.7 percent, from 19.3 percent, for 2010.
Verslo Zinios, Lietuvos Rytas
LEO LT status of a company in liquidation
A status of a company in liquidation should be assigned to Lithuania's national energy holding company LEO LT by Christmas. A respective issue would be included into the agenda of the shareholders' meeting due on December 22, the Energy Ministry said in a statement. The procedures of liquidation, which the shareholders of Leo LT agreed upon early in September, will be launched immediately after the split-off of the Kaunas Hydroelectric Power Plant and the Kruonis Pumped Storage Plant from the power transmission system operator Lietuvos Energija (Lithuanian Energy) and the assignment of shares in both facilities to the state. The liquidator will be selected through a tender procedure and approved by the shareholders. An independent appraiser will then assess the company's assets and the shareholders will approve the assets distribution procedure.
Will raise capital
The Lithuanian bank Snoras, which is owned by two private individuals, will raise the authorized capital with additional contributions worth LTL 88.077 million, to LTL 500 million, from current LTL 411.923 million. The subscription price would be no less than the share face value, i.e. LTL 1, the shareholders of the bank agreed during the Thursday's meeting.
Thursday, 5th of November
The Lithuanian bank Snoras posted LTL 4.107 million in net profit for the first nine months of this year. The whole banking group, however, suffered a net loss of LTL 28.122 million in January-September. "The whole banking sector has been up to quite a few challenges this year. However, we ended the period of three quarters with a profit despite provisions against potential bad loans. The bank has boosted its deposit portfolio considerably despite the worsening on the labor market and the situation of households," the bank's president Raimondas Baranauskas said in a statement. Snoras bank group has experienced LTL 28.122 million losses this year.
Budget will show what we manage to do
The first draft of Lithuania's 2010 budget should be improved, yet the budget law must be passed by the end of this year, President Dalia Grybauskaite has said. "The first draft of the budget, specifically, should be improved of course," she told the reporters on Wednesday. Grybauskaite pointed out that the draft in its current version envisaged a "very big" deficit. In her opinion, the budget of the social insurance fund (Sodra), especially reduction of allowances to the disable should be revised as well. Moreover, it is indicated in the project that taxes should be increased but Grybauskaite does not approve of this decision. On the other hand, President believes that Lithuania must pass the budget law until the end of the year thus demonstrating to the international markets that "it is able to manage things itself".
Shop Apple in Kaunas
The first shop IDeal where products of the company Apple will be sold and people will be able to apply regarding maintenance will be opened in the trade centre Akropolis in Kaunas. Investments have reached LTL 100,000. According to Marius Tikuisis, the head of Desctop Publishing Company, stated that he was encouraged to open one more shop in Kaunas by crisis. He has claimed that there was no a specialized shop Apple in Kaunas and many retail trade businesses terminated their activity due to crisis; therefore, people had to go to Vilnius in order to have a computer or other device repaired. Tikuisis has decided to correct this mistake and invest into new shop.
Wednesday, 4th of November
Old idea: more transparent activity and it is possible to pull in investors
The competitiveness of Klaipeda State Seaport could be strengthened via its reorganization from a state-owned company into a public company, Eugenijus Gentvilas, the CEO of Klaipeda State Seaport Authority, believes. "I had a preliminary discussion of this issue with the minister [Transport Minister Eligijus Masiulis]. He said to think and if we prove [the advantages], he would consider that," Gentvilas told the reporters in Vilnius on Tuesday. In Gentvilas' opinion, if the port was reorganized into a public company, which was only an idea thus far, its borrowing and financing policy could be much more expeditious. In line with existing legislation, state-owned companies shall pay property taxes for the state infrastructure they use. In Gentvilas' view, a public company would pay a profit tax, which would better reflect the efficiency of the company's operations.
Verslo Zinios, Lietuvos Rytas
Oppressed by bad loans
The Lithuanian banking and leasing operations of Danske Bank, one of the biggest banks in Scandinavia and in Western Europe, suffered LTL 359 million in pretax losses in the first nine months of this year after setting aside LTL 361 million in provisions for loans. Nine-month losses of the group before loan impairment charges and taxes amounted to LTL 2 million in the reporting period in comparison with LTL 11 million last year, Danske Bank said in a statement.
Verslo Zinios, Lietuvos Rytas
Every fourth litas remains in a pocket
Richer residents of big cities spend about LTL 300 million per month and they put LTL 100 million aside for future. The company TNS Gallup has made a research and surveyed richer families in Klaipeda, Vilnius and Kaunas. 41 percent of richer residents feel financially vulnerable. According to the data of other researches, 69 percent of Lithuanians feel financially vulnerable.
Tuesday, 3rd of November
Do not buy new cars
558 new cars were registered in Lithuania in October, which is by 70 percent less than last October. Similar decline is forecasted this year as well. 7,086 new cars were registered in the first ten months, which is by 69 percent less than during the same period last year. According to the data of DataCenter, the most popular cars in October were French cars Renault and Peugeot.
Poland's state-owned oil concern PKN Orlen, the owner of the sole Baltic oil refinery Orlen Lietuva, is ratcheting up the pressure on the Lithuanian government to sell the Klaipedos Nafta (Klaipeda Oil) oil terminal, the Financial Times reports on Monday. PKN is so frustrated with Lithuania's refusal to sell the terminal in the port of Klaipeda that it is not ruling out exiting its investment in the refinery, the largest industrial complex in the Baltic States. "Selling Mazeikiu [Orlen Lietuva, formerly Mazeikiu Nafta] would be a last resort but it is a possibility," Dariusz Krawiec, PKN's CEO, said in an interview with the Financial Times. "We have to control the port to control our costs," said Mr Krawiec. "We are a little disenchanted with how our business arguments are received in Lithuania."
Lietuvos Zinios, Lietuvos Rytas, Respublika
Received less for milk
Lithuanian milk processing companies exported products, worth LTL 618 million, in eight months of this year, which is by 24 percent less than during the same period last year. Dairy products, worth LTL 698 million, were sold in the internal market, which is by 7 percent less. Incomes have mostly decreased due to declined prices, whereas an amount of products sold has not changed much.
Monday, 2nd of November
Lithuania's economic sentiment index slid by 1 percentage point to minus 27 in October, down from minus 26 in September, the Statistics Department reported on Friday. Confidence in the construction sector dropped by 4 points, confidence in the services sector - by 5 points and the consumer confidence index dropped by 7 points in a month. Confidence in the retail sector rose by 9 points and industrial confidence by 5 points.
Profit increased by 17.4%
Aviva Lietuva, the Lithuanian life insurer and pension funds manager, posted LTL 10.8 million in net profit for the first nine months of this year, up 17.4 percent year-on-year. "We have achieved positive results through prudent development of activities and cautious cost cutting," Aviva Lietuva CFO Arunas Rumskas said in a statement. The company has 192,000 life insurance and pension funds clients.
Turnover of trade declined
The Statistics Department reported that turnover of Lithuanian retail trade companies was LTL 19.81 billion ex-VAT in three quarters this year, which is by 28.3 percent less than during the same period last year. Turnover of fuel retail trade companies declined by 20.4 percent, turnover of companies, selling food products decreased by 17.2 percent and of those which sell non food products by 22.7 percent in January-September this year in comparison with the same period in 2008.
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