One in five construction companies on the brink of bankruptcy in Lithuania
As shown in a recent analysis of the construction sector conducted by Creditinfo Lietuva, almost a fifth (18%) of construction companies1 are currently on the brink of bankruptcy, while almost a third (31%) are at risk of defaulting on their payments. According to publicly available data2, construction companies, as a whole, exhibit shorter operating histories and offer lower wages compared to other sectors. Financial experts are therefore advising caution when engaging with construction firms.
There are currently 19,167 construction companies in Lithuania, employing almost 108,000 people. The numbers of construction companies and their employees have shown consistent growth since 2020. In 2020, there were 16,144 construction companies with an employee count of nearly 102,000. By 2021, the numbers had risen to 17,171 companies and over 102,000 employees, and at the beginning of 2022, the sector boasted 18,512 companies, employing in excess of 106,000 people.
The average age of a construction company CEO is about 46 years, with a striking 87.5% of these leaders being male. Compared to other sectors, construction companies have a comparatively shorter average lifespan in the market, standing at 10 years, in contrast to the national average of over 13 years.
Despite witnessing among the fastest growth in the current year, salaries for construction workers still lag behind the Lithuanian average. According to data from Sodra, construction worker wages surged by 22% year-on-year in the second quarter, reaching EUR 1,300 before tax (EUR 880 net), while the average earnings of full-time workers across Lithuania rose by 12.3% year-on-year, amounting to EUR 1,980 before tax.
The risk of bankruptcy among construction companies is twice as high as the national average
Currently, 18% of construction firms fall into the high and highest bankruptcy risk categories, compared to 20% at the beginning of this year and 19% at the beginning of 2022. The high and highest risk classes of late payment now account for 31% of construction companies, up from 37% at the beginning of 2023 and 34% at the beginning of last year.
For all companies in Lithuania, excluding the construction sector, 9% of all companies in the country were in the high and highest bankruptcy risk classes at the beginning of 2023, compared to 12% at the beginning of 2022. At the beginning of this year, 17% of all Lithuanian companies belonged to the high and highest risk classes of late payment, with 21% at the beginning of 2022.
“Although the construction sector has experienced a period of growth in recent years, it is particularly sensitive to borrowing conditions, fluctuations in demand and geopolitical changes. During the pandemic, builders experienced a boom in demand – with many people deciding to improve their homes – low energy prices and relatively cheap borrowing. Subsequently, the construction sector encountered a number of challenges stemming from disrupted supply chains and the need to withdraw from cooperation with sanctioned countries,” explains Ekaterina Rojaka, Head of Business Strategy and Development at Creditinfo Lithuania. “In recent months, with the European Central Bank raising its base interest rates, borrowing has become a more costly affair, reducing people’s ability to borrow, and homes built with credit have been slower to sell.”
This year, bankruptcy proceedings were initiated for 136 construction companies
Since 2007, a total of 44,256 construction companies have been declared bankrupt in Lithuania. The highest number of bankruptcies occurred in 2009 (445), 2016 (351) and 2017 (367). Only in 2007 was the number of bankruptcies below 100, with a total of 67. In Lithuania, 163 construction companies faced insolvency in 2020, 131 in 2021 and 237 in 2022. In the first 8 months of this year alone, 136 construction companies in Lithuania have declared bankruptcy.
As of the beginning of September this year, there were 11,512 construction company debts on record, collectively burdened with nearly EUR 90 million in debts, with 962 new debts registered in the first 8 months of the year, according to the credit bureau systems. The average size of a single debt is EUR 7,800.
“When entering into contracts with construction companies, it is advisable to pay more attention to their risk assessment and to clearly negotiate payment terms,” Rojaka commented.
According to data provided to the Centre of Registers, the top 10 construction companies with the highest revenues last year are: YIT Lietuva (EUR 140.6 million), AB Kauno Tiltai (EUR 134.4 million), Conres LT (EUR 100.1 million), Autokausta (EUR 83.2 million), Tetas (EUR 79 million), Staticus (EUR 75.9 million), Merko Statyba (EUR 70.4 million), Žilinskis ir Co (EUR 68.7 million) and INGUS (EUR 63.9 million).
Almost one-fifth (19%) of companies in this sector have not yet submitted their financial statements for 2022.
According to Rojaka, state orders and building modernisation programmes will support the construction sector’s activity in the near future, as demand for real estate slows down. However, falling demand has only a limited impact on the final prices of construction services, as cheaper building materials do not compensate for the sector’s rapidly rising wages, which account for more than a quarter of total construction costs. As a result, construction continues to become more expensive, with a 3.7% year-on-year increase in construction costs in July, with the fastest increase in building repair costs, which rose by 9.2%.
More information:
Jekaterina Rojaka, Head of Business Strategy and Development at Creditinfo Lithuania (jekaterina.rojaka@creditinfo.com)
Or visit: lt.creditinfo.com/en
Notes:
1 In this report, construction companies are defined as companies that have publicly declared to the State Data Agency (SDA) the activity codes of Section F (41-43) of NACE2 as the company’s main activity.
2 The data in this press release is based on information publicly provided by the State Enterprise Centre of Registers, SODRA, the State Data Agency (VDA), and other sources.
Transport business in the Baltics is in recession, with only Lithuania experiencing a slightly brighter picture
Coface records recovery in air transport, but pre-pandemic figures not yet reached.
The transport sector is the one with the highest improvement in risk scores in the latest Coface Quarterly Survey, although the global macroeconomic outlook remains uncertain. Coface experts note that air transport forecasts and new aircraft orders are providing greater optimism. Transport business is rated higher in Western Europe, the Middle East and Japan, while in Central and Eastern Europe (CEE), including the Baltic states, the transport sector continues to be rated the highest risk. The transport sector in Estonia and Latvia is facing more challenges this year, while in Lithuania the situation has started to improve since Q2, with a decrease in bankruptcies and an increase in the forecasts for businesses.
According to Coface experts, the higher scores in the transport sector are mainly due to the recovery of the Chinese economy and global tourism, as well as to public policy decisions, such as the priority given to rail traffic in Germany. However, overall risks to the transport sector remain very high due to high energy costs and demand still below pre-pandemic levels.
Head of Coface Baltics, Mindaugas Sventickas, points out that it is air transport that has been the activity most affected in the global transport sector, and that it is now recovering rapidly. This is due to the gradual economic recovery from the second half of 2021 onwards, significantly influenced by the opening up of Japan (end of 2022) and China (early 2023), which has facilitated travel conditions for international tourists.
The Coface survey shows that while the number of commercial flights has increased and is now even above pre-pandemic levels, seat occupancy rates remain lower. For example, in the Asia-Pacific region, total passenger traffic in April 2023 increased by 171% compared to April last year, thanks in particular to China. Despite the strong growth, demand in this region remains lower than in 2019 (-18% in April 2023 compared to April 2019).
New orders for Airbus and Boeing aircraft are rising: aiming to fly greener and save fuel
In Western Europe and the United States, Airbus and Boeing have also reported an increase in aircraft orders, reaching 774 Boeing and 820 Airbus aircraft in 2022. At the 2022 Paris Air Show, a number of new orders were announced, with Air IndiGo ordering 500 A320 aircraft and Air India ordering 250 Airbus and 220 Boeing aircraft. According to the experts at Coface, this acceleration in the aerospace industry has prompted the decision to improve the risk assessment of the transport sector in some countries, e.g. France. Many of the production processes of Airbus are carried out in France, with production sites spread over Germany, Spain and the United Kingdom. This has contributed to a better assessment of the transport sector across Western Europe.
“It is also worth noting that the main players in the air transport industry are pursuing a strategy that takes environmental concerns into account. On the one hand, this motivates manufacturers to innovate in order to develop ‘cleaner’ aircraft. On the other hand, it encourages airlines to upgrade their fleets to use less energy,” comments Sventickas.
Cargo transport by sea decreases by almost one third
The situation is different in maritime transport, where activity is slowing down slightly after two exceptional years. Declining sea freight rates, high energy costs and stagflation are adversely affecting the financial performance of sea carriers. The revenues of Maersk and CMA CGM in Q1 2023 decreased by 26% and 30% respectively compared to Q1 last year, although they remain significantly higher than in Q1 2019.
This drop in revenue is primarily due to price effects (a fall in freight rates), while the drop in volumes is smaller, with a 3% annual decrease in the container index for January–April 2023. This drop in volumes is partly passed on to rail and motor transport, which is primarily used for the transport of cargo from ports.
Passenger transport in the Baltic States has not yet reached pre-pandemic levels
When analysing air passenger flows in the Baltic states for the period 2019–2023, the highest passenger traffic is traditionally observed in Q3 of each year. After the pandemic, air passenger traffic in all of the Baltic states, although slowly increasing, has not yet reached the levels recorded in 2019. For example, in Q3 2019, the number of air passengers in Estonia reached 954,000, in Latvia 2,299,000 and in Lithuania 1,821,000. In the same period last year (Q3 2022), the figures were 841,000 (88%), 1,711,000 (71%) and 1,677,000 (92%) respectively. According to Eurostat and Coface, the total number of passengers carried by air in the Baltic states in 2022 was 13,434, compared to 6,094 in 2021, 4,657 in 2020 and 17,548 in 2019.
The situation in rail passenger transport is slightly better. For example, in Q3 2019, the number of passengers in Estonia was 2,105,000, in Latvia 5,256,000 and in Lithuania 1,287,000. In the same period last year, the figures were 1,837,000 (87%), 4,835,000 (92%) and 1,292,000 (100%) respectively. The total number of passengers carried by rail in the Baltic states in 2022 was 27,289, compared to 21,069 in 2021, 22,085 in 2020 and 31,986 in 2019. In Q1 of this year, the figure for the Baltic countries was 6,485.
Sventickas notes that the Lithuanian transport sector is distinguished from other Baltic countries by more optimistic forecasts for 2023: “Although the situation in the Lithuanian transport sector deteriorated in the first quarter of this year, we have seen some positive trends since the second quarter of this year: the transport of freight by sea and water has stabilised and the transport of freight by land has returned to almost pre-pandemic levels. Since February this year, the forecasts of transport companies in Lithuania have become more stable, while previously they had been declining for several months.”
Creditinfo: Optimism of Lithuanian transport companies is good news for almost 200,000 employees in the sector
According to 2022 data, Lithuania’s transport and storage sector generated 11.2% of the country’s GDP, which is 2.6 times more than the average for other EU countries. In total, there are currently 8,568 transport and logistics companies in Lithuania, employing 171,300 people, i.e. a quarter more than in 2019.
Jekaterina Rojaka, Head of Business Development and Strategy at Creditinfo Lietuva, points out that the majority (72%) of companies in the transport sector in Lithuania are involved in road freight transport. According to the data of July this year, even 6,195 out of 8,568 transport companies registered in Lithuania indicate that their main activity is transportation of goods by land. Transport accounts for over 55% of Lithuania’s total exports of services. The number of air and water transport companies is 21 and 37 respectively; 2,233 companies in the sector provide storage and transport-related activities and 82 companies provide postal and courier services.
“During the pandemic, the risk exposure of Lithuanian transport companies increased due to travel restrictions, changes in the demand for goods, and then the rise in fuel prices,” says Rojaka. “In 2022, there was a sharp increase in the number of bankruptcies in the transport sector, which started to stabilise this year. In the first half of this year, bankruptcies in the transport sector accounted for only 6% of all company bankruptcies, compared to 24% in the trade sector and 20% in the construction sector. In total, 35 transport service companies have gone bankrupt since the beginning of the year, compared to 50 companies in the sector that went into bankruptcy in the same period last year.”
Rojaka says that although the number of bankruptcies of transport companies has decreased, the number of new companies has slowed down slightly: last year, despite bankruptcies, new companies were actively registering, while in the first four months of this year that number has contracted by 2%. According to a representative of the credit bureau, transport companies have started to borrow more, and the average debt of a company has increased by approximately 35%. There is also a lower number of companies with a low risk of bankruptcy, that is 58.1%, compared to the overall assessment of Lithuanian business of 69.5%. The share of companies in the transport sector experiencing financial difficulties in 2022 is lower than the national average, and amounts to 13.2% (compared to 17.6% for the economy as a whole).
“With the slowdown in domestic consumption in the EU, transport service providers continue to face challenges this year, with competition in the sector increasing due to limited demand, and service fees shrinking. Waterborne transport has seen a particularly sharp fall: The Baltic Dry index contracted by 57% over the year, and this year similar trends have been observed in road transport,” explains Rojaka. “The best short-term prospects for the sector at the moment are for airlines, which are steadily both increasing the number of flights and trying to rebuild the revenues lost in the pandemic. With inflation gradually slowing and demand stabilising, the situation for land and water transport companies should improve next year.”
Creditinfo Lithuania.
Visit: www.lt.creditinfo.com
Webinar: Baltic Market Overview
Register and join Jekaterina Rojaka, COO Creditinfo Lietuva , as she hosts another session on the Baltic market overview.
During this session, you will get the latest updates on the following:
- Improving sentiments – will it strengthen economic growth?
- Rising interest rates – what is the impact on the market?
- Sectoral perspective – losers and winners
Please complete the registration form below to receive the event link. The session will be in English – http://ow.ly/MSjh50NHVVX
Lithuanian debts increased by €6.8 million since the beginning of 2023
According to Creditinfo Lithuania’s latest analysis, Lithuanian debts have increased by €6.8 million since the beginning of the year, reaching a total of €364.8 million.
Of this amount, male’s debts stand at €261.8 million, while female’s debts are at €103 million. This is almost €6.8 million more than at the beginning of this year (€358 million). The total number of borrowers has also risen by 5,000 in the first quarter of this year, with the current total standing at almost 201,000.
Creditinfo Lithuania has recorded almost 201,000 debtors in its systems for March, with a total of 235,300 individuals having 235,300 debts in Lithuania.
After a more detailed examination of the debtor data, it was found that over 129,000 males and 72,000 females are currently in debt, making up 64% and 36% of all debtors respectively. Additionally, 32,500 males and almost 20,000 females have multiple debts, with 25.3% of male debtors and 27.7% of female debtors holding two or more debts.
On average, males owe €2,029, which is 30% more than the average debt owed by females (€1,435). This trend, coupled with the higher number of male debtors, results in men holding 78% of the total debt amount, while women hold only 22%.
During the first quarter, an additional 5,000 individuals in Lithuania fell into debt.
In March, the total number of individuals in debt amounted to 201,000, marking an increase of 5,000 from January’s 196,000. The total value of debt owed by all debtors also rose from €358 million to €364.8 million, with the total number of debts recorded in the credit bureau system increasing by 5,300. The largest number of new debts to households registered in the first quarter of this year, after debts to the financial sector, were for utilities and energy, with a total of 1,518 debts (12%).
“The analysis suggests that the majority of new debts recorded this year can be attributed to the energy and heat price crisis. Rising fuel costs have resulted in increased indebtedness, with people seeking short-term financing in order to balance consumption and expenses,” explains Aurimas Kačinskas, the Head of Creditinfo Lithuania. “Not everyone has had sufficient time to alter their financial habits, which has resulted in the growing number and value of debts.”
Men aged between 35 and 45 are considered to be the most high-risk debtors
Despite fluctuations in the number of borrowers and their levels of indebtedness, the typical borrower profile has remained consistent in recent years. Men aged 35-45 are the riskiest debtors, with debts amounting to €75 million, accounting for almost 29% of the total amount owed by men. The second riskiest group is men aged 45-55, with €61 million in debt, representing 23.3% of the total amount owed by men. In third place are men aged 25-35, who hold €55 million in debt, accounting for 21% of the total amount owed by men. Men aged 55-65 hold €43 million in debt, while those over 65 hold €17 million. Men under 25 hold the lowest amount of debt at almost €15 million.
Among female debtors, the under-25 age group has the lowest amount of debt, while other age groups have the following distribution: €29 million (45-55), €26 million (35-45), €20 million (55-65), and €17 million each (25-35 and over 65).
According to Mr Kačinskas, it is important for citizens to assume their financial obligations responsibly and meet them on time to maintain a positive credit history, which determines their access to financial services, loans, credit cards and payment provisions.
One of the safest businesses in Lithuania – Dental Services
The profitability of some companies is almost half their revenues, very few go bankrupt.
Vilnius, Lithuania 06/02/2023. Although most dental businesses are small and usually employ fewer than 10 people, this is one of the most stable businesses in Lithuania. Profitability often exceeds one-third of income and only a few become insolvent. Dental businesses are 7 times less likely to go bankrupt than the average insolvency across all other businesses, according to an analysis conducted by Creditinfo Lithuania.
According to data from January 2023, there are currently almost 2,000 dental businesses in Lithuania employing 9,500 people. The number of companies and their employees is growing year on year. Dental businesses are generally small, with more than half of them employing fewer than 10 people. Only 12 organisations have created more than 50 jobs, while the largest dental service companies are Vilnius University Hospital (293), SB Dental Clinic (168), Denticija (153), Smile Academy (126), Smile Laboratory (124), Vilnius Implantology Centre Clinic (93), Panevėžys City Dental Clinic (72), Laudenta (71), Pasirink (66) and Žvėrynas Dental Clinic (59).
Revenues grow year on year, profitability remains high
Despite the pandemic’s restrictions on the medical services sector between 2020 and 2021, the total revenue of dental companies has grown consistently year on year, reaching €294.6 million in 2021, an increase of 39.8% compared to 2020 (€210.7 million), which in turn is an increase of 76% compared to 2019 (€167 million).
The top 10 companies with the most revenue in 2021 are SB Dental Clinic (€8.2 million), Vilnius Implantology Centre Clinic (~€7 million), Denticija (€3.2 million), Smile Academy (€3.1 million), Prodenta (€3.1 million), Žvėrynas Dental Clinic (€3 million), Sveikatos Gija (€2.9 million), Šiauliai Implantology Centre (€2.8 million), Laudenta (€2.6 million) and Dental Harmony (€2.6 million).
Dental service companies are characterised by relatively high profitability, reaching up to 45%. The top ten companies with the highest profits in 2021 are Laudenta (€922 thousand), SB Dental Clinic (€917 thousand), Implantera (€739 thousand), Šiauliai Implantology Centre (€713 thousand), Smile Design (€688 thousand), Vilnius Implantology Centre Clinic (€644 thousand), Klaipėda Orthodontics Centre (€592 thousand), Dantima (€556 thousand), Donatas Jurgaicis Odontology Clinic (€529 thousand) and Teeth Centre (€512 thousand).
“The dental services business has advantages – patients usually pay for services immediately, which speeds up the turnover of funds. In addition, some dental services are subject to significant VAT exemptions, which reduces the tax burden and increases the profitability of the companies,” says Jekaterina Rojaka, Head of Business Development and Strategy at Creditinfo Lithuania.
However, not all companies were profitable, with 148 dental service providers declaring a loss in 2021, compared to 128 in pandemic year 2020 and 133 in pre-pandemic year 2019.
Dentists 7 times less likely to go bankrupt
The dental services sector has a particularly low risk of bankruptcy compared to all other sectors, with 1% of firms currently at high risk of bankruptcy and 0% at the highest risk. The high and highest risk classes for late payment are 3% and 2% of companies, respectively. The riskiness of dental firms was slightly higher at the beginning of 2021, with 4% of firms in the high bankruptcy risk class (none in the highest) and 11% in the high and highest delayed payment risk classes.
No dental companies went bankrupt in 2021 or 2022, while 26 firms have become insolvent since 2003, an average of 1-2 per year.
The dental business is characterised by a low level of debt. As of January 2023, there were 98 registered debts in the credit bureau’s system, totalling €95 thousand. The average debt was €971.
Compared to companies operating in other sectors in Lithuania, dental service companies are 7 times less risky. For example, in January this year, 1.3% of dental businesses were classified as high and highest risk, compared to an average of 9.5% for all other businesses in Lithuania. In terms of the risk of late payment, 4.5% of firms were in the high and highest risk classes, while the average for all other firms was 17.2%.
Almost a fifth of dental businesses (359) have not yet submitted their financial statements for 2021.
More information:
Jekaterina Rojaka, Head of Business Development and Strategy, Creditinfo Lithuania (jekaterina.rojaka@creditinfo.com)
Travel agencies in Lithuania are slowly rising from the ashes
Revenues doubled in a year but remained three times lower than before the pandemic.
Vilnius, Lithuania, 24/01/2023. Travel agencies in Lithuania that declared their income in 2021 earned almost twice as much as in the previous year. However, compared to income in 2019, they earned almost three times less, according to an analysis carried out by the credit bureau Creditinfo Lietuva. Almost 100 tourism companies were loss-making. With the increase in travel flows, the number of debts increases and their average size grows.
There are currently 783 companies in Lithuania for which tour organisation is the main activity. In 2021, travel agencies declaring revenues collectively earned more than €171 million, almost double (82%) the pandemic year 2020 (~€94 million). However, travel agencies are still a long way from a real recovery – for example, in 2019, their revenues were almost €474 million, but fell more than fivefold in the aftermath of the pandemic.
According to 2021 data, the largest annual revenue was earned by the following companies: Novaturas (€108,995 million), Tez Tour (~€60 million), Itaka Lietuva (€12.5 million), Coral Travel Lithuania (€9.5 million), Kidy Tour (€8.9 million), Estravel Vilnius (€6.3 million), Estekspress (€4 million), Traveldeals LT (€4 million), Glotera (€3.6 million) and ZIP Travel (€2.9 million).
The top ten most profitable travel agencies are Novaturas (€909 thousand), Baltic Tours Group (€633 thousand), Vestekspress (€530 thousand), Glotera (€336 thousand), Traveldeals LT (€307 thousand), Baltic Clipper (€288 thousand), Baltic Travel Service (€271 thousand), TEZ Tour (€215 thousand), Estravel Vilnius (€158 thousand), Riviera Tours (€148 thousand) and ZIP Travel (€123 thousand).
Staff numbers shrink by a quarter
In total, travel agencies currently employ almost 2,000 employees (1,850). While the number of enterprises has remained almost constant over the past few years (776 in 2019, 787 in 2021), the number of employees has fallen by almost a quarter since 2019, from 2,426 to 1,850.
Travel agencies are more often headed by women, accounting for almost 56% of all managers. The average age of a travel agency manager is 49 years and the average age of a travel agency is over 15 years.
In the travel sector, men’s salaries are higher than women’s – as of November 2022, the average salary for men was €2,659 per month, while for women it was €2,014 per month. At the start of 2022, the average salary for women was €2,053 per month and for men was €2,364 per month.
State support has prevented more bankruptcies
Since 2004, a total of 94 travel agencies have gone bankrupt in Lithuania, with the highest number of bankruptcies recorded in 2009 (10) and in 2015 (12). In 2022, there were 5 travel agency bankruptcies, while there were 3 in 2021 and 4 in 2019. No travel agency bankruptcy was recorded in pandemic year 2020.
“The travel sector was one of the hardest hit by the pandemic, along with hotels and restaurants. During the pandemic, when revenues from tour operators dropped fivefold, it was state support that saved the sector from bankruptcy,” explains Aurimas Kačinskas. But the challenges of the pandemic were replaced last year by new challenges – the war in Ukraine and the sanctions imposed on Russia have exacerbated the energy crisis, fuel prices have risen and many travel routes have been disrupted. The slower-than-expected recovery of the air transport sector, with a sharp increase in fares, is having a negative impact on the business of tour operators, preventing them from recovering faster.
According to the head of the credit bureau, it was state support that determined the stability of the number of enterprises and the discipline of submitting financial statements – compared to other sectors, only 90 travel agencies did not submit their financial statements for 2021, making them ineligible for state support.
However, a risk analysis of travel agencies shows that there have been both positive and worrying signs in the recent period. For example, as of January this year, 9% of companies were in the high and highest classes of bankruptcy, compared with 12% a year ago. In terms of delayed payments, 17% of companies are currently in the high and highest risk classes, down from 21% last year.
Compared to 2020 and 2021, the recent increase in debt is slightly higher and the average amount of debt per person is growing. At present, 306 debts have been registered in the credit bureau system, amounting to more than €349 thousand, with an average debt of €1,141. A year ago, the number of debts was 316, amounting to €351 thousand, with an average debt of €1,112. In January 2020, 255 debts amounting to €203 thousand were registered, with an average debt of €798. 335 travel agencies mostly owe money to Sodra (€3 million). The debt of 158 travel agencies to telecommunications companies amounts to €222 thousand. 8 travel agencies owe €74 thousand to financial companies.
“The tour operator business is recovering, but revenue growth is slower than expected in the wake of the pandemic due to the many geopolitical and economic shocks around the world. The tourism sector is currently encompassed by a number of risks, so it is advisable to keep a close eye on the changing financial indicators of partners organising the trips,” concludes the head of the credit bureau.
More information:
Aurimas Kačinskas, CEO of Creditinfo Lithuania (aurimas.kacinskas@creditinfo.com)
Creditinfo Lithuania invests 1 Million Euros in new Credit Bureau System
The credit bureau is carrying out strategical changes and gathering resources inside of the group of companies.
In implementation of the development plans and presentation of new services, the credit bureau “Creditinfo Lietuva“ informs having invested one million euro into a new information system of the credit bureau and that it is going to introduce several innovative products soon. The credit bureau is implementing strategical changes – it is gathering all the data resources and processes inside the group of companies “Creditinfo Lietuva“ for more effective administration.
Last March, “Levine Leichtman Capital Partners” (LLCP) became the new main shareholder of the group of companies “Creditinfo”. It announced its plans to grow and to expand the activities of credit bureaus in the international market and to invest into development of new data-based solutions. The investor with solid international business management experience focuses on the information technologies and automated solutions.
“We have a good possibility to start providing more new services in Lithuania (as in other advanced financial markets), to start providing more new services that would enable the creditors to make faster and more accurate decisions, and the consumers to receive financing more expeditiously, – says Mr. Aurimas Kačinskas, CEO of “Creditinfo Lietuva“. – The services of credit information, risk management and data analysis that we are providing demand for bigger collection of the resources in one place, thus, we have invested into development of the credit bureau’s system of a new generation, and we have expanded the available IT platform. This allows controlling quality of the services better, providing them continuously, and expanding the suggest scope of services by innovative products.”
Automated solutions and artificial intellect data services will be introduced
The services of “Creditinfo Lietuva“ that will be launched soon will help the clients to use more automated solutions and products of the credit bureau not only in Lithuania, but also in other countries, and to evaluate creditworthiness of borrowers, and to control the financing risks. It is planned to introduce the innovations in the first quarter of this year already.
The pending changes are the part of strategy of the new main shareholder of the group of companies “Creditinfo”, LLCP – to apply the international business management experience for the activities of credit bureaus in more than 30 countries. The company of private capital, “Levine Leichtman Capital Partners” operating for 38 years, is managing 14 investment funds and has invested into 90 companies in the United States of America (USA) and Europe.
The international group of companies “Creditinfo“ includes the credit bureau operating in Lithuania, “Creditinfo Lietuva“, that was established in 2000. The credit bureau has been collecting and managing the biggest data system on creditworthiness of the Lithuanian companies and residents, and providing services of credit risk management, rating creation and modelling for more than 20 years. The company has 43 employees and its annual income in 2020 amounted to 5,6 million euro.
More information:
Aurimas Kačinskas, CEO of “Creditinfo Lietuva”
Aurimas.Kacinskas@creditinfo.lt
Tel: +370 618 10110
Average pay for women grows in Lithuania
The average pay for women has grown in 56 sectors after starting releasing information on gender pay gap. Within a matter of three months women’s average monthly pay increased by EUR 20, compared against an EUR 15 increase for men.
After Sodra (Lithuanian Social Security Authority) started publishing sectoral data on average gender pay gap, women’s average pay has grown in 56 sectors out of 81 within the past three months. Women’s monthly average pay increased from EUR 2 to EUR 325 in various sectors. In 13 sectors women’s pay grew by over 10% despite some economic activities where gender pay gap continued to grow for men, these are: insurance, re-insurance, pension accumulation companies, power generation, gas and air conditioning companies, and the pharmaceutical industry.
According to the analysis conducted by Creditinfo Lithuania, from April to July women’s average pay grew from 0.1% to 36.1%, or from EUR 2 to EUR 325 per month. In thirteen business sectors, women’s pay increased by over 10%, with the most remarkable growth reported in accommodation (16.8%), catering and supply of beverages (21.6%), gambling or betting industry (36.1%).
An increase from 10 to 14% in women’s average pay was reported in leather production and water transport, postal and courier activities, organisation of travels, sports activities, and events management, as well as several other sectors, manufacturing of coke and refined petrochemicals, cinema and television programme production, wastewater treatment, programme production and broadcasting, manufacturing of chemicals, extraction of oil and gas.
However, from the already listed sectors only in two of them (postal and courier services, oil and gas extraction) women’s average pay is higher than men’s amounting to EUR 1,856 (cf. men’s pay of EUR 1,552) and EUR 2,851 (cf. men’s pay of EUR 2,248), respectively; whereas in all the other sectors men earn more than women on average.
An average men’s pay is EUR 185 higher than women’s, but the gender gap has been narrowing
Despite the narrowing gender pay gap reported from April to July, in Lithuania men used to earn EUR 185 more than women: men’s average pay currently stands at EUR 1,596 against EUR 1,411 for women. Last April the gap reached EUR 190, with men’s average pay standing at EUR 1,581 against women’s EUR 1,391.
Aurimas Kačinskas, CEO of Creditinfo Lithuania, notes that in the absence of a more in-depth analysis, it is not feasible to assess gender pay gap; examination must be made into the types of positions held by men and women in order to identify the reasons behind differences in salaries.
“Publication of average pay is yet another indicator which can be used by future employees or partners to assess companies; knowledge of this information encourages a better understanding and awareness of the specificities of every company”, A. Kačinskas said.
The gap continues to grow in insurance, reinsurance, financial and telecommunication services, and pharmaceutical industry
Against the background of growing women’s average pay in most of the sectors, in 22 economic sectors the gender pay gap is widening. An average women’s pay dropped by 17.9% in insurance, reinsurance, and pension accumulation sector, where men earned EUR 3,179 per month on average compared to EUR 2,284 earned by women. A gender pay gap widened further from 11.1 to 11.5% in research and technical activities, pharmaceutical industry, power and gas supply, and air conditioning.
Gender pay gap continues to enlarge in the beverages’ industry, immovable property, construction of buildings, telecommunications, and financial sectors.
For instance, in telecommunications an average monthly women’s pay in July stood at EUR 1,602 compared against EUR 2,154 for men, in the financial sector these figures were EUR 2,433 and EUR 3,620, respectively.
The yawning gender pay gap is reported in air transport, where men earn EUR 3,932 per month on average, compared with women’s average monthly pay of EUR 2,385. Human resource management experts put this gap down to a higher number of men engaged in the aviation sector in better paid positions of pilots, whereas women work as flight attendants.
Meanwhile, it is worth mentioning that over three months the number of economic sectors with women earning more than men grew from 9 to 11. The sectors of education, libraries, land transport and transport via pipelines, social work, care services, furniture production, postal and courier services, tobacco and metal production were recently joined by fisheries and aquaculture companies, and motor vehicle manufacturing.
Earlier last June it was reported that, as of last April, out of 81 economic sectors in as many as 72 men receive higher pay than women.
For more information please contact:
Aurimas Kačinskas, CEO of Creditinfo Lithuania, (aurimas.kacinskas@creditinfo.lt; +37061810110).
Lithuanian corporate immunisation level is as high as 90% while others are below 30%
The share of immunised staff in different commercial companies may vary several times, the survey by Creditinfo Lithuania suggests. According to Statistics Lithuania (SL), the least immunised retailers (from 36.9 to 52%) work at markets and kiosks. The largest proportion of immunised staff after vaccination (up to 74.7%) has been reported in pharmacies, optics and supermarkets. Among all the sectors, the least active are construction and transport companies, but this indicator may well be explained by a large share of foreign nationals on their staff list.
According to SL data, in terms of the share of immunised staff in the commercial sector, companies selling bread, buns and confectionaries in specialty bakery shops take the last place, with slightly over one third (36.9%) of immunised staff. In other commercial segments, the percentage of fully immunised staff is within the range of 52–64%, with 60–87.2% of staff having received at least one vaccination doze.
Jekaterina Rojaka, Head of Business Development and Strategy at Creditinfo Lithuania, says that after the Statistics Lithuania launched publication of immunisation indicators on a company level, Creditinfo followed suit and started reflecting them in its information systems, while a growing number of users look for information on immunisation of potential business partners.
More staff got infected and recovered from the virus where the vaccination pace is slow
It appears from the publicly available data that in companies with staff delaying vaccination the proportion of staff infected or having recovered from the virus is higher. Obviously, the analysis of recovery indicators among staff suggests that many of these people (up to 12%) are among market and kiosk retailers. Within the category, the sub-category of textile, clothing and footwear retailers stands out where the full immunity (two vaccine dozes) within this group has been acquired by 52% of staff, another 12% of staff became immune after getting infected and recovering from the virus, bringing the overall immunisation level to 64%.
In comparison to workers in supermarkets, pharmacies and optics with 75% of fully vaccinated staff, the immunity after getting infected with the virus was reported from 1 to 5% of the labour force.
The largest number of immunised staff work for the financial services sector, the smallest number – in transport companies
The analysis of companies from other economic sectors suggests that among companies with 70–100% of immunisation level, those engaged in financial activities and services take the lead with 87.1% of immunised staff. Companies at the bottom of this group are from construction (38.7%) and transport sectors (30.3%). According to J. Rojaka, a low level of vaccination there may be explained by a relatively high number of foreign staff working in these sectors, leaving their immunisation indicators outside the scope of the national statistics.
Compared to other economic sectors, extractive industry and agricultural companies are moving at the slowest pace towards the set immunisation target of 70–100%, accounting for 46.6 and 47.8% of immunised staff, respectively.
In restaurants and hotels, which had been very actively promoting vaccination among their staff, at the end of August the immunisation indicator approached to 71.5 and 71.6%, respectively. J. Rojaka notes that these two sectors have achieved the major quality progress in terms of staff vaccination pace, reporting an increase of 45 percentage points in the number of staff vaccinated in August.
For more information:
Jekaterina Rojaka,
Head of Business Development and Strategy, Creditinfo Lithuania
Email: jekaterina.rojaka@creditinfo.lt;
Tel: +370 612 73515
Analysis of the Lithuanian construction sector
Financial and performance indicators in the construction sector reveal positive rather than negative trends. The boom in real estate emerging in the time of the pandemic has remarkably boosted the sectoral activity (during the first 6 months of this year alone the volume of constructions works grew by almost one fifth) and positively reflected in performance indicators of most of the companies. Sectoral earnings have been rapidly growing both on the domestic and foreign markets. After discounting the impact of seasonality and working days abroad, the volume of construction works is an increase of 21.5% year-on-year. The number of construction companies have been mushrooming, accounting for an increase by a third during the second quarter of this year compared to the previous year.
Financial statements filed by construction companies show that the number of construction companies in Lithuania in 2021 has grown by additional 531 from 15,784 to 16,316 (an increase of 3.4%) year-on-year. A very similar pace of growth (4.1%) was observed in the average corporate earnings (from EUR 809,994 to EUR 842,872). In terms of the staffing level, though, it has decreased slightly from 102,072 to 101,833. Despite a favorable situation, managers of construction companies are very cautious about the growth in the number of staff due to higher labour and other construction costs. Due to a more pessimistic mood in the sector, during summer this indicator started to decrease.
Another important positive factor is the decreasing number of debts and their aggregate values. For instance, during pre-pandemic August 2019 the number of corporate debts in construction industry stood at 12,336, with their aggregate value of EUR 128.7 mln. At the same period in 2020 the number of corporate debts stood at 11,539 compared against a reduced value of debt of EUR 94.3 mln. Although at the end of last August the number of corporate debts in the construction industry grew once again to 12,055, the aggregate debt value accounts for EUR 96.6 mln.
Some positive trends may be seen in the solvency of the construction industry. For instance, a year ago 23% of companies in this sector belonged to the high or highest group of bankruptcy risk, whereas this year the number of such companies dropped to 20%. In terms of delayed payments, some improvement may be observed too: last year the number of companies within the group of high and highest risk of delayed payments accounted for 47%, compared against 37% this year.
A number of construction companies going bankrupt has been decreasing steadily. In 2017-2020 the number of bankruptcies dropped from 366 to 163, whereas the updated statistics for this year give a solid ground to expect a further similar decrease in the number of reported bankruptcies.
Despite the reported drop in earnings in 2020 from 10% to 4% in comparison to 2019, other performance indicators in the construction industry have improved. For instance, the corporate sales median increased by 16% (from EUR 143,155 to EUR 166,133), the quick ratio has grown from 1.86 to 1.95, while the profit margin before tax increased from 1.25 to 1.35. The equity ratio has improved from 43.83 to 46.23, the accounts payable turnover decreased from 134 days to 128 days, whereas the accounts receivable turnover shortened from 57 to 51 day. EBITDA grew from 9.1 to 12.3%.
Jekaterina Rojaka,
Head of Business Development and Strategy, Creditinfo Lithuania
