Estonian Development Fund to invest 3 mEEK in startup companies

The Estonian Development Fund will invest up to three million kroons (EUR 192 000) in startup information technology companies Sportlyzer and Inner Circle.
Sportlyzer and Inner Circle are seed-phase investments where the prototype or business model are still undergoing testing, head of the fund’s investment division Heidi Kakko said.
Sportlyzer is developing a web environment for the international market to bring fitness enthusiasts together with training and motivation software. The company’s aim is to link up training recommendations and feedback. Sportlyzer has passed the Development Fund’s international business incubator where its business plan was polished. The company’s leader is the founder of Vomax Tõnis Saag and it has Jüri Kaljundi, one of the founders of CV Online and Nagi, on board. Former manager of Playtech’s Estonian unit Rein Lemberpuu has invested in it.
Inner Circle positions itself as a social network free from information noise. The company plans to create a private environment for groups to communicate and take it to foreign markets. The technology entrepreneur Allan Martinson is one of its founders and the team is led by Andrus Raudsalu, former CEO of the Delfi portal. In addition to the Development Fund the founding team brought in Regio and Live Nature Eesti headed by Raivo Vare as private-sector investors.

Source: Estonian Review


Retail sales have started to improve

July was the best month for companies of the Estonian retail sector since the start of 2009, the Ministry of Economy and Communications said.
The decline in domestic retail sales in Estonia that has continued for a long time is starting to end. Unemployment has decreased and people’s confidence regarding the future has increased. If thus far domestic demand held back economic growth to a large degree, then in the coming months an improvement can be expected in that too, Karel Lember, chief specialist at the ministry’s economic analysis service, said in a press release.
SEB Bank analyst Hardo Pajula said in his remarks to BNS that Tuesday’s data from Statistics Estonia showing an increase in industrial output and a slowdown in the decline in retail sales was another drop in the generally positive news flow of recent months.
“In what regards retail trade figures, the figures for August apparently will show us a slight increase already,” said Pajula.
Also Swedbank economist Maris Lauri forecast positive annual growth to start in August or September. She described the month on month improvements in retail trade so far as perhaps a bit faster than one would have expected.
Nordea Pank chief economist Tõnu Palm told BNS the retail figures released by Statistics Estonia confirmed the earlier belief that a recovery was taking place, albeit with pain. “Private consumption will remain in a downtrend this year and only a slightly positive reading can be expected next year. There is no rapid improvement due. In this situation people are consuming more staple goods and purchases of durable goods are postponed until confidence, incomes and the overall economic situation have improved,” said Palm.
Retail sales of goods by retail trade enterprises in Estonia in July decreased 1% compared to July 2009, measured in constant prices, Statistics Estonia said on Tuesday. The annual decline in retail sales in July was the smallest of the current year.
In January retail sales of goods decreased 13% compared to the same month a year ago, in February the rate of decline was 11%, in March 10%, in April 9%, in May 4% and in June 6%.

Source: Estonian Review

Kõpu lighthouse is the oldest working lighthouse in the world

The lighthouse in Kõpu on Estonia’s Hiiumaa Island, which used to hold third place among the world’s oldest functioning lighthouses, has taken the top position as both of the older lighthouses have stopped performing their original function, the Estonian daily Eesti Päevaleht said, citing the structure’s leaseholder. The Kõpu lighthouse will turn 480 on 1 August next year.
Jaan Puusepp, the leaseholder to the lighthouse, said he heard about Kõpu having taken the top place through experts of the field at the beginning of this holiday season. “Even being third was big enough honor, so becoming first was a very pleasant surprise indeed,” he said.
The Estonian Maritime Administration still lists the Kõpu lighthouse as Aid to Navigation and the lighthouse continues to give out a white light signal. It did not emerge from the report what had happened to the classification of Kõpu’s competition, most notably the Tower of Hercules situated about 1.5 miles outside the city of La Coruna in Galicia, Spain, that most sources still refer to as the world’s oldest functioning lighthouse.
Previously known as Dagerort lighthouse, the lighthouse of Kõpu stands 32 meters tall on a hilltop in the middle of the Kõpu Peninsula in the western part of Hiiumaa and the elevation of its light from the sea level is 102 meters. Building of the lighthouse started in 1505 and a fire on the top of the tower was first lit on 1 August 1531.

Source: Estonian Review

Business sector is improving

According to Statistics Estonia, in the 2nd quarter of 2010, the net sales, costs and total profit of the business sector increased compared to the previous quarter as well as to the same quarter of the previous year.

The increase of net sales of business sector continued for the second quarter in succession.  According to the seasonally adjusted data, the net sales of enterprises increased 5% in the 2nd quarter of 2010 compared to the 1st quarter. In the 1st quarter this year compared to the previous quarter the increase was 4%.

In the 2nd quarter of 2010, enterprises sold goods and services for 138 billion kroons (8.9 billion eoros) at current prices, which is 7% more than in the same period a year ago. The net sales increased in most economic activities. The wholesale and retail trade enterprises, which have the biggest share in gross net sales in total business sector, have managed to increase the net sales for the first time after the 3rd quarter of 2008 as compared to the previous year. The growth was mainly influenced by the wholesale activity. The net sales of construction enterprises decreased the most.

Compared to the 2nd quarter of 2009, the enterprises’ total costs increased 6%. The personnel expenses decreased 8% as well as the number of persons employed and number of hours worked. It has continually increased the growth of the productivity indicators (labour, hour and personnel cost productivity). The hour productivity (total productivity/number of hours worked) of business sector increased 11%, at the same time the average hourly labour costs stayed on the level of the 2nd quarter of the previous year.

In the 2nd quarter 2010, the total profit of enterprises amounted to 7.4 billion kroons (475 million euros), which was 38% bigger compared to the 2nd quarter of the previous year and more than half bigger than in the 1st quarter this year. Although compared to the 2nd quarter of the previous year, the total profit increased the most in repair of computers and personal and household goods and arts, entertainment and recreation activities, the growth of total profit of business sector was mainly influenced by manufacturing. The growth in manufacturing was mainly supported by the manufacture of metal products, shale oil and motor vehicles. Agriculture and education activities were running at a loss.

The investment activeness of enterprises was continually low. In the 2nd quarter, enterprises invested 5.3 billion kroons (337 million euros), which is a third less than in the 2nd quarter of 2009. Investments were mainly made in other equipment and machinery and in the construction and alteration of buildings. The major investors were manufacturing, transportation and storage and energy enterprises with about a half of the total investments of enterprises. Compared to the 2nd quarter of the previous year, investments increased only in other equipment and machinery.

Net sales, personnel expenses and total profit of the business sector,
1st quarter 2002 – 2nd quarter 2010
(average of the quarters of 2005 = 100)

Diagram: Net sales, personnel expenses and total profit of the business sector, 1st quarter 2002 – 2nd quarter 2010

Source: Statistics Estonia