BONJOUR L'ESTONIE

Tallinna Kaubamaja to double dividend

Kaja Koovit
kaja.koovit@aripaev.ee

The management board of Tallinna Kaubamaja proposed to pay EEK 2 in dividends, what is twice as much as last year.

Tallinna Kaubamaja will pay dividends EEK 2 per share, in total amount of EEK 81.5 million. Last year Tallinna Kaubamaja paid EEK 1 a share in dividends.

The sharehoders general meeting should approve the proposed dividend on 9 May.

Äripäev analyst Tõnis Oja writes that based on today’s closing price, the return on equity is 2 pct what is clearly less than in other listed companies who have disclosed the dividend payment amount.

Foreign investors to take over Estonian companies

Toomas Hõbemägi

Hansabank macroanalyst Maris Lauri says that foreign investors have become much more active in attempting to buy up Estonian companies.

Speaking at a business forum held in Tallinn, Lauri said that foreign investors are touring Estonia seeking companies that they could buy. “It will make the Estonian economy more dependent on foreign capital, but as long as companies are not being taken over to reduce competition, we have nothing to worry,” she said.

“It is a normal process that foreign investors are buying up Estonian companies since things are not going well in the Estonian economy and Estonian owners are willing to sell,” said the analyst, adding that foreign investors are taking advantage of the fact that they have access to cheaper capital than Estonian businessmen.

Estonian and Danish Prime Ministers hope for the entry into force of the Lisbon Treaty

Stenbock House – Today, Estonian Prime Minister Andrus Ansip met with his Danish colleague Anders Fogh Rasmussen, with whom the main topics of discussion were the ratification of the Lisbon Treaty in the Member States, the European Union Climate and Energy Package, and in relation thereto, the goals of the UN Climate Conference that will take place next year in Copenhagen. The results of the NATO summit held in Bucharest, as well as the NATO mission in Afghanistan were also discussed.

When talking about the ratification of the Lisbon Treaty, Andrus Ansip expressed hope that the Riigikogu will ratify the Treaty during the spring session. This Monday, 9 April, the first reading of the draft act for the ratification of the Treaty was held at the Parliament. The government heads of both countries stated that the successful ratification of the Treaty allows for continuing with the institutional reform of the European Union, which is in the interests of all Member States and a strong European Union.

The issues related to the energy and climate package covered at the council of the European Union held in March were also discussed in detail. Andrus Ansip explained to his Danish colleagues the positions of Estonia in relation to the change in the system for greenhouse gas distribution quotas as of the year 2013. “Estonia supports the goals set in the Energy and Climate Package. We must also keep the energy security of the region in mind,” Ansip noted. Rasmussen said he understands the Estonian position on energy security. Rasmussen also stated that Denmark sets high hopes for the Climate Conference to be held in December of next year in Copenhagen, where an environmental agreement to replace the Kyoto Protocol is planned to be adopted. “The goals that Denmark sets for promoting environmental care are very high,” said Rasmussen. Andrus Ansip stated that Estonia regards the reduction of the pollution of the environment as an important goal.

When talking about the NATO summit in Bucharest, both parties stated that the meeting was extremely successful and that Georgia and Ukraine should be especially satisfied with the results of the summit, having been given a clear signal for the potential to join NATO.

The Danish Prime Minister praised Estonia for its significant contribution to the Afghanistan mission, where the armed forces of both countries are in service at the militarily complex South-Helmand province. Rasmussen stated that the creation of stability in this region is of the utmost importance in the battle against terrorism.

Watch the recording of the joint press conference of the Prime Ministers online at the address [under extraordinary briefings] http://www.valitsus.ee/brf/?id=1222 

View photos of the meeting here :
http://www.valitsus.ee/?id=8009

_____________________________________
Valitsuse kommunikatsioonibüroo briifinguruum
http://www.valitsus.ee/brf/ 
press@riik.ee 

Food products more expensive in Tallinn than in Berlin and Stockholm

Sandra Taimre
sandra.taimre@aripaev.ee

The survey conducted by Estonian Institute of Economic Research shows that sugar, flour, rapeseed oil and eggs are more expensive in Tallinn than in Berlin.

The stores in Tallinn sell also more expensive cheese and milk than the retail stores in Stockholm, writes SLÕhtuleht.

Marje Josing from the Institute of Economic Institute explained the price difference with the market size and competition. According to her, the bigger is the producer, the cheaper are products. The Estonian food producers are small and they are not that specialized, so the prices of food products go up.

The CEO of Rakvere Piim Jaanus Vihandi believes the current price increase is just the beginning. Estonian may reach the economy of scarcity again, describes Vihandi the possible future scenario.

Estonia has received EEK 14,000 from the April rioters

Sandra Taimre
sandra.taimre@aripaev.ee

The state has received a bit over EEK 14,000 from the April rioters, but the repair of the riots damages cost over a half a million kroons.

The damage claims submitted to 43 persons amounting over a half a million kroons. The total costs of the damages amount EEK 586,284, writes Päevaleht Online.

The Ministry of Finance has received from 17 persons EEK 14,095. The ministry has concluded an agreement with three persons to make payments in parts. The amount of these agreements is EEK 314,569.

In addition, the ministry has sued seven rioters who refuse to pay the losses voluntarily. The amount of the actions is EEK 358,019.

Moving the bronze soldier, reburying the remains and the damages caused by riots in Tallinn and Ida Virumaa County cost more than EEK 92.26 mln for the state.

Estonian GDP growth will drop to 3% this year

Kaja Koovit
kaja.koovit@aripaev.ee

Estonian GDP growth will be around 3 pct this year and 3.7 pct next year, compared to the 7.1 pct growth last year, the International Monetary Fund (IMF) forecasts.

Inflation in Estonia could amount to 9.8 percent this year and 4.7 percent in 2009, LETA mediates IMF latest report. Current account deficit in Estonia could decrease from 17.4 pct of GDP in 2007 to 11.2 pct this year.

Latvian GDP could increase 3.6 pct this year, which would be a much smaller growth than last year when Latvia's GDP increased 10.2 pct.

In 2009, Latvia's GDP growth is projected to fall to 0.45 percent, and to 0.28 percent in 2010.

IMF also believes that inflation will remain high in Latvia. Average annual inflation in Latvia this year could be 15.3 pct, compared to 10.1 pct last year. In 2009, inflation in Latvia could decrease to 9.2 pct, and to 6.7 pctt in 2010.

Latvia's current account deficit, 22.8 pct of GDP in 2007, could decrease to 15 pct of GDP this year.

Soaring inflation empties wallets in EU Baltic states

Burdened with the highest inflation rates in the 27-member European Union, consumers in EU newcomers Estonia, Latvia and Lithuania are seeing cash vanish from pockets without a trace.

"By the end of the month we don't have any more money !" exclaimed Agnese, who is fresh back to work in the Latvian capital Riga after maternity leave.

With inflation having spiked to a 12-year high of 16.8 percent in March compared with the same month in 2007, the ex-Soviet Baltic republic has the highest rate in the entire European Union.

There is little to suggest inflation in this country of 2.3 million people will decline significantly any time soon.

"Now we have to borrow some money until the next salary," said Agnese, 26, who declined to give her surname citing reluctance to speak publicly about personal finances.

She and her husband earn a combined 800-900 lats (1,150-1,300 euros, 1,800-2,020 dollars) per month, which she said is not enough to cover loan payments and living costs for themselves and their infant daughter.

"We aren't alcoholics and we're not into gambling. The money simply melts away and it's beginning to get on our nerves," she fumed.

"We can't afford any extras. I don't even dream about foreign trips. To save something from our salaries is mission impossible," she added.

Saddled with the inflation burden, Latvians are now wary shoppers, in sharp contrast with the retail frenzy of recent years that has fuelled spiralling economic growth.

Kadri Nõgu for Miss Universe 2008 !

Miss Universe 2008, the 57th Miss Universe beauty pageant, will be held at the Crown Convention Center (Diamond Bay Resort) in Nha Trang, Vietnam on July 14, 2008. At the conclusion of the final night of competition, outgoing titleholder Riyo Mori will crown her successor.

Over 80 contestants are expected to compete in the event^[5] which will be broadcast on NBC in the United States and to over 180 countries via CNBC and Telemundo.

Country	Contestant	Age	Height	Hometown
Estonia	Kadri Nõgu	21	175	Saaremaa

A received threat - let me know what you think so that I may advise (email address supplied !) but anyway interesting :

HEY!

I am a very close person standing out for Ms Kadri Nõgu (the girl who won Miss Estonia title) and we are FURIOUS about you!!

From where did you take the right to use her photo on your website???!!!??? As i recall she hasn't give you any permission about this. If you won't take her (by the way very private) photo down, you will have to deal with the police.

If you need any photos about the competition, you can ask for them from Mr Valeri Kirss and that's it!

We will hope you will do what we asked you to do and take this photo down.

Number of cruises to Estonia shows substantial growth

In recent months, cruises from Helsinki to Tallinn and back have once again become more and more popular, while the new generation of high-speed vessels are gradually replacing the old ships.
      
Cheap prices and the Old Town of the Estonian capital still attract Finns who board the passenger ferries in the evening, spend the night in the bars and in their cabins, make inexpensive purchases in Tallinn in the morning, and return to Helsinki in the afternoon.
      According to the preliminary information released by Statistics Finland, the number of Finnish visitors to Tallinn was 69,000 in February 2008, showing a growth of some 80 per cent compared with the same period last year.
      The shipping lines estimate that the growth could be attributable to the thick ice covering the Gulf of Finland in the previous winter as well as to the fact that car ferry operator Tallink’s new generation high-speed cruise ship Star started its services in April 2007. The new vessel can take up to 1,900 passengers.
      The Star sails from Helsinki to Tallinn around the year and carries considerably more passengers over the Gulf of Finland than do other high-speed ferries, which can accommodate only a few hundred passengers and frequently have to stay in port because of rough weather conditions.

Tallink's Superstar takes to the high seas

By Rebecca Leslie

Tallink Group's subsidiary Tallink Superfast Ltd. has taken delivery of the Ancona-built M/S Superstar, which will add to travellers' options on the pivotal Helsinki-Tallinn route.

The vessel is being introduced to build on the success of the year-round shuttle service that was launched a year ago on this route. It arrives in Tallinn next week and enters service a week later, to complement the existing vessel the M/S Star.

The M/S Superstar can accommodate up to 2,080 passengers and has 1,930 lane metres for ro-ro cargo. The vessel is 175.1 metres long, has 186 cabins with a total of 736 beds. Its recorded service speed is 27.5 knots.

The highlight of the ship’s interior design is the show-bar located in the fore which goes through three floors and has a large glass wall. Similarly, the stern also features a bar over two floors with a glass wall.

Onboard facilities include restaurants and cafés, including an a la carte restaurant, two buffet restaurants, a pizza restaurant, a hamburger café, and an ice-cream corner for children. There will also be a children’s play corner, a sun-deck bar, a casino and a business lounge.

In addition, the ship houses shops which sell items ranging from groceries, alcohol, the latest cosmetics and clothes to fashion accessories.

Tallink Group CEO Enn Pant said : “The shuttle service may become even more popular as the customers will have more choices. It is of importance that all of our Tallinn-Helsinki trips are now conducted by brand new vessels.”

The project expense totals to €120 million (EEK1.9 billion) of which €93 million (EEK1.45 billion) was funded by a long-term loan from HSBC Bank, London.

Tallink Group lays foundations for new headquarters – 08/04/08

Why the Baltic property crash is good news

By Mike Collier

TALLINN - Falling prices in the Baltic real estate markets may be causing concerns for investors and developers, but they could actually present an opportunity to improve quality and the long-term outlook. That was the key message emerging at a seminar titled ‘Regeneration – Sustainable Urban Planning’ hosted by real estate giant Collier’s CRE in Tallinn on April 8.

Philip Harcourt, Head of Development Consulting at Collier’s emphasised that talk of regeneration and sustainability in real estate projects needed to be more than just window dressing.

“Regeneration is one of those misused words,” he said. “It’s like the term ‘property developer’. Property developers have developed a bad name. When you read about a businessman appearing in court, he’s usually described as a property developer. Today all the property developers are becoming ‘regenerators’. Regeneration is getting a bad name. The danger is the property developers build their building and go home – but that isn’t the end of it.

“Actually regeneration is about much more than just building things and walking away. Regeneration is about changing the cultural mix, how people react… not just the physical buildings.”

“Regeneration has become the ‘R’ word and I hope that sustainability does not become the ‘S’ word.”

Unemployment on the rise

TALLINN - The unemployment rate in Estonia has reached record highs as the real estate and construction industries undergo mass layoffs.

The increase in unemployment is closely connected to the collapse of the real estate market, experts say, which has left up to 6,000 people out of a job.

Another factor contributing to the increase is the high number of companies filing bankruptcy.

Where will all this stop now that it finally has started ... ?

Tallink Group lays foundations for new headquarters

By Dermot Davitt

Leading ferry group Tallink Group last week laid the foundation stone for its new headquarters, which is scheduled to open in spring 2009.

The new 5,000sq m office building will be “an impressive visiting card,” said group CEO Enn Pant, as well as being well located close to the city and harbour.

Tallink said: “The new building is designed according to Tallink’s needs and its layout is much more effective compared to the current office. The latest building standards and materials make it also more energy efficient. The location of the new building is in the Tallinn port area, which is a great benefit to our employees who need to commute between our vessels, port and office several times a day. Tallink’s rental and housing costs per employee will become relatively smaller in the new building.”

MORE STORIES ON TALLINK GROUP AND TALLINK/SILJA LINE

Tallink-Silja Line fires up Tallink Shuttle service with launch of the M/S Superstar – 12/03/08

Tallink-Silja Line pledges “a new cruising experience” as it launches the Baltic Princess – 12/03/08

Coalition at odds over austerity budget

TALLINN - Estonia’s ruling coalition has failed to agree on how to slash budget expenses now that revenues have begun to fall on the backdrop of a slowing economy.   

The coalition’s board met on April 7 to discuss the situation.

The parties agreed on the necessity to map out an austerity plan to cover the anticipated budget shortfall but differed about whether a negative supplementary budget should be drawn up immediately.

Close doors for 50% of casinos .... !

Toomas Hõbemägi

Almost half of Estonia’s 167 casinos could close doors if the new draft gaming act that is already in the Parliament is adopted.

The new draft casino law would restrict the number of small casinos, but allow them to offer online gambling.

Critics say that the draft gambling act benefits only large casino operators in Estonia. By new draft law- a casino needs to have minimum capital of EEK 15.6 mln while the current requirement is EEK 2 mln.

17 000 net salaries lost in Estonian casinos every month

Stefan Andersson

During the second half of 2007 the turnover of the Estonian casinos amounted to about EEK 160 mln per month. The mirror of this number is the net-loss of all visitors to the casinos. The amount is equal to 17 000 Estonian average monthly net-salaries.

One would like to believe that casinos are quite a harmless type of entertainment for a limited group of people, but calculating from the financial reports of the Tallinn-listed casino operator Olympic Entertainment Group (OEG), it turns out that the numbers are quite big.

After the acquisition of Kristiine Casino in the spring of 2007, OEG claims that it holds a 45% marketshare of the Estonian casino market. During the second half of 2007, OEG:s turnover from its Estonian casino business amounted to EEK 72 mln per month. Thus assuming a 45% marketshare for OEG, the monthly turnover of the entire Estonian casino market amounted to EEK 160 mln.

Since the turnover of casinos is calculated on a net-basis, i.e it equals ”bets” minus ”wins”, the figure also shows the ”net-loss” of all visitors to the casinos. Thus, those who visited the Estonian casinos during the second half of 2007 (be they Estonians or foreigners) collectively lost about 160 mln per month. Of course this amount does not disappear into thin air, for instance about 25% (again judging by OEG:s figures) turns into salaries for the employees of the casinos. Nonetheless, EEK 160 mln remains the casino visitors' ”net-loss” or ”entertainment cost” or whatever one prefers to call it.

Looking at the whole Estonian economy during the second half of 2007, the average net salary of employees was EEK 9,3 thousand per month. Hence, it would take 17 thousand net salaries to finance the EEK 160 mln spent/lost in casinos every month. Or making another reference : In Estonia's total educational system, there are 54 000 workers (with the respective net-salary of EEK 8,0 thousand). It would take almost 40% of these people's net salaries to finance what is spent/lost in casinos.

The pattern of gambling and its regulation of course differ a lot from country to country. Therefore it is difficult to compare Estonia with e.g its Nordic neighbours where sports betting dominates and casinos, if allowed, are heavily regulated. Also the size of Internet gambling in Estonia and elsewhere is anyone's guess. However, it is clear that in terms of classical casinos, Estonians (and Latvians) relatively outspend most other European countries. 

AirBaltic launches direct flights to Venice and Nice

Kaja Koovit
kaja.koovit@aripaev.ee

The Latvian airline airBaltic is launching new flights from Riga to Venice, Italy and Nice, France, during the summer season of 2008. The first flight to Nice will be offered on April 17, and the first from Riga to Venice will depart on April 19.

We are expanding our network of routes not just in the direction of Scandinavia and eastern countries. Each summer season, airBaltic opens flights to Mediterranean cities to make it easy and comfortable for people to fly to places where sunshine, sea and beaches are abundant,” airBaltic president and CEO Bertolt Flick said.

Initially airBaltic direct from Riga to Venice will be offered twice a week, on Mondays and Fridays. The flights will be offered on Boeing 737-500 aircraft and will last for 2 hours and 30 minutes. One-way tickets will start at LVL 32, including airport fees and transaction costs.

Direct flights to Nice will be offered three times a week, on Mondays, Thursdays and Saturdays. These flights, too, will be offered on Boeing 737-500 aircraft, and they will last for 3 hours and 10 minutes. One-way tickets will start at LVL 32, including airport fees and transaction costs.

Merks’ supporting city official accused in corruption

Sandra Taimre
sandra.taimre@aripaev.ee

SIA Merks, the Latvian subsidiary of Estonian building copmany Merko Ehitus, is dragged to the corruption scandal.

Vilnis Strams, the head of the city development department in Riga, who has helped Merks in every way, is being charged with corruption claims. Likely due to his support, Merks has become one of the biggest construction companies in Latvia, aripaev.ee mediates Latvian business paper Dienas Bizness.

According to the data of a Latvian journalist, the official is a close to Ivars Geidans, the CEO of Merks, and Toomas Annus, the large shareholder and Chairman of the Supervisory Board of Merko Ehitus.

Ansip : Economy is still growing

Sandra Taimre
sandra.taimre@aripaev.ee

On yesterday Parliament briefing, the Estonian Prime Minister Andrus Ansip said that the economy keeps growing.

Ansip said that anyone who understands economy could see that Estonian economy is still growing. He admitted that the growth has slowed down significantly, but has not stopped, writes postimees.ee.

Ansip explained to the Parliament the unfavorable VAT revenues in February with the delay of VAT legislation and returning a record amount income tax. According to him, the government expects  poor VAT revenues also in March due to the poor VAT revenues from real estate sector.

Number of unemployed up 20.5 pct in March

Sandra Taimre
sandra.taimre@aripaev.ee

There were 17,181 people registered as unemployed in the Labor Market Board at the end of March. This is 2.6 pct more than in February 2008, but 20.5 pct more than in March 2007.

This represents 2.7 pct of all employable population aged from 16 to pensionable age. 

During March, 1,480 registered unemployed found work, while 2,957 people were registered as new unemployed. 

Registered unemployed was the highest in Valgamaa in South Estonia (5.8 pct of employable population), followed by Võrumaa (5.3 pct), Ida-Virumaa (5 pct) and Põlvamaa (4.9 pct.) The lowest unemployment was continually in Tartumaa (1.7 pct), Harjumaa (1.9 pct) and Raplamaa (2 pct).