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NEWS - 2019 01 03 - 10:20

Investment plans of Latvian companies for 2019 lag behind those of competitors in Lithuania and Estonia

Survey of Chief Financial Officers in large companies in Baltics, conducted by SEB Latvia, shows that 46% of large companies in Latvia intend to invest this year in developing their business. However, their competitors in Estonia and Lithuania are more ambitious: during 2019, 62% of large companies in Estonia and 64% in Lithuania will invest in growing their business.

Meanwhile Latvia boasts the largest share of companies who will use their profits to pay dividends to shareholders: 30% of large companies have such plans, while in Estonia 15% and 13% of large companies in Lithuania will pay dividends. Another 13% of large companies in Latvia are planning to repay their loans before they reach maturity, and 11% will accumulate their profits instead of spending it.

Ints Krasts, board member of SEB Latvia: "I am glad to see that there are more and more companies in Latvia with ambitions extending beyond the borders of our country. Share of such companies has increased from 2% to 11%. Not only results of the survey, but also our talks with clients and transactions on the market indicate that the number of companies interested in expanding their business in export markets is increasing. Some of them are looking for business opportunities outside Latvia to get closer to their end-users. Some of them are looking into buying a foreign company, which, I think, is an excellent ambition. Other wish to grow beyond the potential of the Latvian market.

On the other hand, we see that large companies in Estonia and Lithuania are much more active in terms of investing both in their home markets and abroad. This trend has been there for several years already, therefore there are concerns that our competitors in Estonia and Lithuania might gain an upper hand in terms of competitiveness. For this reason this year I would like to see more Latvian companies investing in innovative technologies and other solutions which will boost their efficiency in the upcoming economic cycles. Moreover, the current shortage of workers should act as a catalyst for such investments."

This is the sixth survey of Chief Financial Officers in Baltics. Results reveal whether CFOs expect that next twelve months will bring good or bad news for businesses, identify which are the main concerns and challenges and give an insight in other topics as well. 226 largest companies with annual turnover over 20 million euros from Latvia, Lithuania and Estonia participated in the survey, which was carried out during September of 2018.

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