Lithuanian baker expands, profits hit

- Last updated on GMT

Related tags: Euro

Leading Lithuanian baker Vilniaus Duona Plius, has purchased a 40
per cent stake in rival Panevezio Duona, boosting its previous
holding in this northern Panevezys-located company to 95 per cent.
However, further costs incurred by restructuring are expected to
impact yearly earnings.

Vilniaus Duona Plius​, which is owned by Finnish food giant Vaasan&Vaasan, paid Litas 465,800 (€135,000) or Litas 3.24 a share. A report from the Lithuanian news agency ELTA, confirmed that the Securities Commission had received an official notification of the deal yesterday.

Earlier on this year the Vilnius-based baker said that it expects its full-year consolidated sales for 2003 to grow to 82 million litas (€23.8 million euros), which is expected to represent a 12 per cent drop compared to previous year.

The drop in sales has been attributed to restructuring costs, which have included reorganisation of the management and marketing divisions. The company said that it has also invested Litas 10 million in its production facility this year and has earmarked a further Litas 8 million for 2004.

Last year the bakery earned Litas 3.7 million (€1.1 million euros) net profit, but given the high cost of restructuring and investment in production earnings are expected to be a little lower this year.

Vilniaus Duona Plius currently holds approximately 25 per cent of the Lithuanian bakery market.

Related topics: Market Trends

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