Industry

The Department of Statistics reported that during the fourth quarter of 2008 Lithuanian companies suffered losses of more than 1 billion litas. In 2007, during the same period, companies received about 5 billion litas of pre-tax profit. Experts have a pessimistic outlook for the foreseeable future.

Observations show that real estate, lease and other businesses and industries incurred the greatest losses during last quarter of 2008. During the year, their profits shrunk to half. It is believed that the last quarter reflects only the very beginning of the economic decline. This year, the economy slowdown will affect all the sectors. A wave of losses will ripple across all sectors of the economy.

This year, corporate rates have already reached the levels last seen in 2002. The evaluation of trends indicates that corporate profitability will continue to decline. Is still difficult to predict when the "bottom" will be reached. It is believed that corporate losses may reach 2.5 billion litas and more during the second quarter of this year. Economic decline will mostly affect the manufacture, transport and real estate sectors.

During the last quarter of 2008, the country’s companies’ revenue for goods sold and services rendered totalled 50.7 billion litas. This is 1% less than during the third quarter of the last year. The average corporate profitability was negative and amounted to minus 2.1%. The biggest loss-makers were air transport (60%), real estate, and chemical industry (30%) companies. Only the enterprises in the post and telecommunications (5%), power industry (4%) and construction (3%) remained profitable. During the year 2008 corporate earnings in the country exceeded 211 billion litas, and compared with the year 2007, increased by 16%.

Pre-tax profit earned by enterprise in 2008 reached 8.1 billion litas and was almost half of what was earned in 2007. Profits fell by more than 50% in the transport and power industry sectors, by 25% in the postal and telecommunications enterprises. In 2008 corporate profitability was 3.9%. Two years ago this rate was 8.8%.