Number of bankruptcies fell 7.3 pct

Altogether 469 legal persons went bankrupt in Estonia during 2013, 7.3 percent fewer than in 2012, figures published by the credit information provider Krediidiinfo on Tuesday show.

Just like in the previous couple of years, the number of bankruptcies continued to decline in Estonia last year, albeit at a significantly slower pace. In 2011, the number of bankruptcies fell 40 percent and in 2012, 20 percent year on year.

The number of businesses that went bankrupt last year made up 0.26 percent of the total number of businesses in Estonia. Their aggregate sales in the year before the bankruptcy totaled 197 million euros and net loss 8.8 million euros. The biggest creditors of bankrupt companies were banks and suppliers.

The average company going bankrupt in 2013 had annual sales of 1.3 million euros. Almost three in four had accrued tax debt during the past year and almost one in three had been indebted to the tax authority during the whole year.

Source: Baltic News Service via Estonian Review

2013 was a successful year for the business sector

According to the preliminary data of Statistics Estonia, in 2013 the total profit of the business sector was 3.1 billion euros, which was 5% more than the year earlier. The increase in the enterprise sector’s total profit continued for the fourth year in a row.

Compared to 2012, the total profit increased in almost all economic activities. The biggest contribution to the growth in total profit was made by activities mainly relying on the domestic market – real estate, energy and trade. The growth in the profit of the business sector was negatively influenced mostly by transportation and storage and manufacturing activities. The profit of manufacturing, which holds the largest share in the total profit of the business sector, decreased 6% compared to 2012, mainly due to the decreased profits in the manufacture of fuel oil and food products.

In 2013, enterprises sold goods and services for 50.4 billion euros, which was 9% more than the year before. The turnover of wholesale and retail trade and manufacturing enterprises, which have the biggest share in the turnover of the total business sector, increased 15% and 7%, respectively. The biggest increase (33%) occurred in the turnover of real estate activity.

Compared to 2012, the total costs of enterprises increased 9%. Personnel expenses increased 9% as well. The number of persons employed as well as the number of hours worked increased 2%. The labour productivity of the business sector on the basis of value added amounted to an average of 21,300 euros per person employed in a year and was 5% higher than in 2012.

The growth in enterprises’ investments stopped. In 2013, enterprises invested 2.6 billion euros, which was the same as in 2012. Similarly to 2012, the largest investments were made mainly in equipment and machinery and in the construction and alteration of buildings. The main investors were energy, manufacturing and transportation and storage enterprises with a half of the total investments of enterprises. Compared to 2012, the investments in land, constructions and computers increased. Other investments decreased, with the biggest decrease (9%) registered in investments in equipment and machinery.

In the 4th quarter of 2013, enterprises sold goods and services for 12.8 billion euros, which was 5% more than in the same period of 2012. In the 4th quarter of 2013, enterprises invested 790 million euros, i.e. a tenth less than in the 4th quarter of 2012.

Total profit of the business sector, 2002–2013

Total profit of the business sector

Source: Statistics Estonia

Krimelte acquires Spanish rival

An Estonian-owned construction material manufacturer, Krimelte, has acquired a majority holding in a Spanish firm, Olivè Qukmica, a move characterized as a breakthrough into a blue chip, Old World market.

Krimelte’s plants in Estonia, Russia and Brazil produce foams, sealants and adhesives.

Read more from ERR

Cinemas terminate merger plan

Owners of Estonia’s two leading cinema operators announced their joint decision to terminate the agreement made in July under which Forum Cinemas wished to acquire Solaris Kino in order to expand its activities in Estonia.

The parties confirmed that the main reason for terminating the agreement was opposition of the Competition Board to the transaction.

Read more from BBN

The profit of the business sector has improved

According to Statistics Estonia, in the 3rd quarter of 2013 the total profit of the business sector was 945 million euros, which was 5% more than in the same period a year earlier.

Compared to the 3rd quarter of 2012, total profit increased in almost all economic activities. The biggest contribution to total profit was made by activities mainly relying on the domestic market – trade, real estate and energy. The profit of manufacturing, which had been showing a downward trend since the fourth quarter of the previous year and which holds the largest share in the total profit of the business sector, started increasing again. The profit of manufacturing increased 4% compared to the 3rd quarter of last year, first of all due to the increase of profits in the export-oriented manufacture of electronics and wood products.

In the 3rd quarter of 2013, enterprises sold goods and services for 12.9 billion euros, which was 9% more than in the same period a year ago. The turnover of wholesale and retail trade and manufacturing enterprises, which have the biggest share in the turnover of the total business sector, increased 18% and 5%, respectively.

Compared to the 3rd quarter of 2012, the total costs of enterprises increased 10%. Personnel expenses increased 10% as well. The number of persons employed as well as the number of hours worked increased 3%. The labour productivity of the business sector on the basis of the value added amounted to on an average of 5,700 euros per person employed in a quarter and was 5% higher than in the same period a year ago.

In the 3rd quarter, enterprises invested 697 million euros, which is 14% more than at the same time a year earlier. The largest investments were made mainly in equipment and machinery, and in buildings. The main investors were energy, manufacturing and agricultural enterprises with more than a half of the total investments of enterprises. Compared to the 3rd quarter of 2012, only investments in equipment and machinery decreased. Other investments increased – in the acquisition of buildings, the most.

Total profit of the business sector, 1st quarter 2009 – 3rd quarter 2013

Diagram: Total profit of the business sector, 1st quarter 2009 – 3rd quarter 2013

Source: Statistics Estonia

Estonian Minister: EU digital single market must be filled with real content

The Estonian minister of economy and communications, Juhan Parts, said in a political discussion between ministers in the European Competitiveness Council on Monday that the goal of the European Union for 2014 must be continuous simplification of the business environment and favoring of growth in productivity.

“Only in such manner can Europe be competitive compared with the rest of the world under conditions where the population is ageing and and workforce is becoming scarcer and scarcer,” Parts said according to spokespeople.

It’s essential on the European level to achieve progress in improving the operating environment and reducing the burden for the entrepreneur. “Functioning of the digital single market without setbacks is one of the preconditions for the European Union’s international competitiveness and Estonia supports the goal to set up a functioning digital single market by 2015,” the minister said.

According to Parts, the digital single market must be filled also with real contents, which requires cross-border taking into use of the e-ID and trust services, among other things. Parts described as important the principle that institutions of the public sector will ask a person for information only once and that this principle was implemented across the whole EU. The European Commission on Nov. 13 presented its annual report on the state of affairs in integration of the market and how a single market is functioning in different member states. Consumers see the Estonian market as functioning very well and Estonia is ranked in a high third position among EU member states.

The report commends Estonia for already having made the Points of Single Contact (PSCs) a part of its integrated e-government structures, and the existence of a functioning strategy on cyber security. At the same time, the report mentions a lower level of use of e-commerce in Estonia compared with the EU average and highlights the need to make progress as regards the electricity and gas market where a single supplier still dominates.

The analysis of progress is a contribution to the EU Annual Growth Survey 2014, which will be discussed by national ministers in the Council and endorsed by EU leaders at their March 2014 summit.

Source: Estonian Review / BNS

Aviation technology plant opens near Tallinn

An aviation technology development and production factory of Electroair was opened on Monday in the village of Soodevahe near the Estonian capital Tallinn.

Construction of the plant that houses converter development and testing labs, assembly lines and an office building on a territory of about 2,000 square meters began in March. “The devices we produce help reduce expenses, improve the environment and solve global problems as well as various tasks related to the use of aircraft,” director general Aleksei Snitsarenko said in a press release.

Electroair produces electric converters that are compatible with all types of aircraft. Founded in 2006, the company now has over 100 customers across the world, including countries like Ukraine, Lithuania, Russia, Kazakhstan and India, and the Caribbean.

The production division of Electroair earned 631,000 euros of profit at sales of 1.7 million euros last year. The sales division posted a profit of 253,000 euros at a turnover of 1.2 million euros.

Source: BNS / Estonian Review

Estonian businesses rather optimistic about future

For the first time in several years businesspeople in Europe rather are optimistic about the coming year, and this particularly holds true for the Baltic countries and Finland, the results of a survey taken by the Association of European Chambers of Commerce (Eurochambres) show.

Estonian entrepreneurs are more optimistic about the future than in a similar survey in 2012, with almost 60 percent of the entrepreneurs interviewed predicting an increase in sales. Six percent believe that sales will decline and slightly over one-third expect sales to be on a par with 2013, the Estonian Chamber of Commerce and Industry said.

As regards exports, 51.5 percent of the entrepreneurs interviewed believe that export will increase and 7.4 percent are of the opinion that it will decline. Forty-four percent of entrepreneurs hope domestic sales to grow.

Entrepreneurs expect the overall situation of the economy to remain the same next year as in 2013. A quarter of the respondents believe it to improve, while one in five think it will deteriorate. Respondents seeing an increase in investments ahead made up 32 percent, with 50 percent expecting the level of investments to remain unchanged and 16.4 percent believing it to decline.

The director general of the Chamber of Commerce, Mait Palts, said the outcome of the survey this year reveals a more optimistic mood than last year, which hasn’t been very much the case in recent years. “We know that the Baltics are feeling more secure in comparison with other countries. At the same time, the problems that the whole Europe is fighting, we’re fighting them too,” he said.

“In Europe unemployment is causing concern. At the same time, comparing the indicators for Europe and Estonia, we are more optimistic in that too and tend to be concerned about the shortage of skilled people instead. Almost 30 percent of Estonian entrepreneurs are of the opinion that new people will be hired next year and two-thirds forecast that the number of employees at their company will remain the same,” Palts said.

The survey based on responses from more than 59,000 entrepreneurs suggests that while sales volumes could grow next year, businesses remain cautious in their outlooks as regards employment and investments.

In the annual survey conducted for the 21st time, entrepreneurs from Lithuania were the most confident about their future and entrepreneurs from Cyprus the most insecure.

In Estonia respondents numbered 252, of whom 231 are exporting companies.

Source: BNS / Estonian Review

Rebane brothers named entrepreneurs of the year

Entertainment businessmen and brothers Peeter and Priit Rebane of BDG Holdings were named Ernst & Young’s Entrepreneurs of the Year, with President Toomas Hendrik Ilves making the announcement at the awards event yesterday.

Other contenders for the award were Mailis Lintlom of Windoor AS, Thomas Padovani of Webinfluence Group AS, Anthony and Max Rivshin of Top Connect OÜ and Hellar Mutle of Bestra Engineering AS. In another notable recognition, Minister of Economic Affairs Juhan Parts gave a lifetime achievement award to EBS founder Madis Habakuk, reported Delfi.

“I would really like to hope that Estonia does not end up on the side of the 44 percent of countries that have a negative business environment. We shouldn’t go the road of excessive taxation, but should instead support businesses,” Peeter Rebane told Delfi.

Speaking on ETV this morning, Peeter Rebane said: “Recently it seems that we lack a common societal vision for where to move forward and we are too busy dealing with thinking up new taxes and regulations,” he said. “In my opinion there should be more dialogue between politicians and businesses.”

The Rebane brothers’ BDG Holdings, founded 18 years ago, is one of the biggest entertainment businesses in the Baltics. BDG’s biggest establishments are Club Hollywood and the Solaris shopping center, which includes two cinemas and the Nokia Concert Hall. BDG is also a major concert organizer, having hosted British pop artist Robbie Williams last August.

Entertainment businessmen and brothers Peeter and Priit Rebane of BDG Holdings were named Ernst & Young’s Entrepreneurs of the Year, with President Toomas Hendrik Ilves making the announcement at the awards event yesterday.

Source: Estonian Review

Kühne + Nagel – Estonian enterprise of the year 2013

The Estonian state owned entrepreneurship development foundation Enterprise Estonia has named logistics company Kühne + Nagel the winner for Estonian Enterprise of the Year 2013 Award.

Read more from BBN

Follow

Get every new post delivered to your Inbox.