Observer "Lietuva"

WEEK 42nd 2004

Saturday, 16th of October

Essential changes await payment card market
Lithuania's payment card market grew by 12.2 percent during the first nine months of 2004 and posted a 23.8 percent annual increase. The number of different cards issued by local banks reached 2.589 million and their aggregate turnover came to LTL 10.723 billion as of October 1, a rise of 34.7 percent, in year-on-year terms. Meanwhile, local bankers predict that the saturated payment card market will face a microchip and credit card boom in 2005.
As of early October, payment card users could withdraw money at 1,006 ATMs, a rise of 35 from the year earlier figure, and could make settlements with cards at some 13,900 trade and other outlets, an increase of 2,100 on the year-on-year basis.
"Next year the card market will be dominated by microchip cards, while the credit card market will boast of strongest potential," said Saulius Kiskis, director of Payment Card Department at Vilniaus Bankas.
As of July 1, commercial banks issued 65,100 net credit cards (2.6 percent of all cards issued) and 244,000 debit cards with credit limit (9.7 percent of the total.
Hansabankas, which held 32.75 percent of total payment card market as of early October, issued 848,200 active payment cards, a rise of 10.5 percent in year-on-year terms. After a year's break the bank ceded the top ranking on this market to Vilniaus Bankas, which put the number of its active payment cards at 865,900 (a rise of 22.9 percent), equal to 33.43 percent of the market.
Kauno Diena, Lietuvos Zinios

Hansabankas profit exceeded expectations
Hansabankas, Lithuania's second-biggest bank by assets, posted consolidated net earnings of LTL 81.624 million for the first nine months of 2004, close to its annual earnings target set at the start of the year. The net result for the nine months is 41.4 percent higher compared with net earnings of LTL57.7 million posted by the bank in the same period a year ago.
The bank announced that its third-quarter consolidated earnings surged by 73.5 percent, year-on-year, to LTL 28.776 million.
The bank's executives forecast in August that earnings for the second half would be somewhat lower than those for the first half as changes in loan grouping principles, in place since July, were expected to push up expenses, particularly specific provisions.
Lietuvos Zinios

Stumbras expects to get rid of losses
Stumbras, one of Lithuania's leading alcoholic beverage producers, expects to end the year in the black after returning to profit in September. The company, which is controlled by Lithuania's multi-business group MG Baltic, reported pre-tax earnings of LTL 1.056 million for September, down by 18.77 percent year-on-year. It posted losses of LTL 319,420 for the first half of this year. Stumbras posted net earnings of LTL 11.477 million for the full year 2003.
Lietuvos Zinios, Lietuvos Rytas

Friday, 15th of October

Rokiskio Suris doubles profit
Rokiskio Suris, Lithuania's largest dairy group, reported preliminary net earnings to increase by 1.8 times to LTL 15 million for the first nine months of 2004. The group's consolidated sales for the nine months rose by 25.6 percent to LTL 315.1 million, a rise from sales of LTL 250.8 million in the respective period of 2003.
"Our sales growth was driven by improved trade conditions with the EU and subsidies on exports to the Eastern countries," Dalius Trumpa, production director at Rokiskio Suris, said.
Exports to the EU countries amounted to 50 percent this year. Rokiskio Suris exported 15 percent of the production to the Eastern countries.
Lietuvos Zinios, Lietuvos Rytas

PET producers gather strength for entrance in Russia
Nemuno Banga Group, Lithuania's producer of PET bottles, has acquired its major competitor Nemuno Banga Klaipeda, previously known as Veritas Stili, which is completing the construction of new plant at Klaipeda free economic zone (FEZ).
The new plant, which will accommodate some manufacturing equipment from Nemuno Banga Group's plant in Lentvaris, will be started up in November. Nemuno Banga Group says it expects to open new routes for exports via Klaipeda port, boost the efficiency of manufacturing and the number of customers with this acquisition.
Similar to Nemuno Banga Group, Nemuno Banga Klaipeda manufactures PET pre-forms.
Nemuno Banga Group supplies some 65 percent of its output to Western and Central European countries, whereas about 30 percent are shipped to Russia. For 2003, Nemuno Banga Group reported a turnover of LTL 330 million.
By the end of 2004, Nemuno Banga Group intends to launch the construction of two plants in the Czech Republic and Bulgaria.
Verslo Zinios, Lietuvos Rytas

Parcel deliverers start logistics organisation
Baltic Logistic System Vilnius, the leading Lithuania's logistic company, reported sales of LTL 12.5 million for the first nine months of 2004, a surge of 21 percent from the January-to-September period of previous year.
The company, which provides parcel delivery services under the trade name of Bizpak, boosted its parcel shipments by 47 percent, to 822,000 units.
"A steady growth in parcel deliveries evidence that well-developed Lithuania's small parcel market still has room to grow," Gintaras Bingelis, Baltic Logistic System Vilnius sales and marketing director, said.
Verslo Zinios, Respublik

Thursday, 14th of October

Lithuanian oil decreases
Lithuania's oil producer Geonafta, co-owned by Polish and Lithuanian investors, produced 81,100 cubic meters of crude in the first nine months of 2004, a rise of 4.6 percent since the January-to-September period of previous year.
Facing an exhaustion of crude reserves, the company predicts that the latest increase might be the last for the oilfields operated by the producer.
"We extract more and more water with crude, which shows that further production will become unprofitable soon," Antanas Jasas, Geonafta's CEO, said.
The output of crude had been on decline at all Lithuania's oil producers for several years, Geonafta pointed out. At present, Lithuanian oil producers operate 36 oil wells in 10 oil fields in total. Lietuvos Zinios

Holders of Visa left millions
Foreign visitors spent USD 38.2 million in Lithuania via settlements with Visa cards this summer, a rise of 32 percent from the year-earlier figure of USD 28.8 million. Visitors from abroad made 328,000 transactions with Visa cards in Lithuania in the June-to-August period, some 21 percent more compared with summer of 2003.
"Interest in Baltic countries surged upon their accession to the European Union. Foreigners are eager to see new members of EU family," Tommi Lassila, Visa International representative for the Baltic countries, said.
Visitors from the US and UK were the most generous while making settlements with Visa cards.
Lithuania ranked the second among the Baltic countries in terms of foreigners' expenditures via Visa cards this summer. Estonia was the first with USD 74.4 million in settlements of foreign tourists and businessmen with Visa cards.
Lietuvos Rytas, Verslo Zinios

SBA soared
Furniture companies of Kaunas concern SBA have sold LTL 208.5 million worth of production in the first nine months of this year, a 9.2 percent increase year-on-year.
Klaipedos Baldai holds the first position among both the furniture companies of the group and all Lithuanian furniture producers in terms of sales. During the nine months, the furniture producer in Klaipeda posted sales of LTL 85.88 million.
The volumes of Baldutura boosted by 60.8 percent this year since 2003. The company sold production at LTL 3.605 million in the nine-month period this year.
Kauno Baldai reached LTL 40.17 million turnover in the first three quarters of 2004, a rise of 31.4 percent from the corresponding period of the previous year.
Verslo Zinios

Wednesday, 13th of October

Sanitas seeks EU funds for construction of new plant
Sanitas, Lithuania's biggest pharmaceutical producer, is seeking funding from the European Union to cover a part of its planned 40-million-litas investment in a new plant.
Sanitas said it would consider abandoning the project if the Lithuanian Business Support Agency rejects its request for financial assistance.
Under the plan, Sanitas' new plant in Kaunas would have an annual production capacity of over a billion tablets, 60 million ampoules, up to 12 million eye-drop bottles and up to 50 million tons of ointment. The new production facility would be built on the grounds of the Endokrininiai Preparatai plant in Kaunas that Sanitas owns.
Verslo Zinios, Lietuvos Rytas

Lithuanian electricity exports down
Lithuanian electricity exports totalled 4.959 billion kilowatthours (kWh) in the first nine months of 2004, a decline of 8.8 percent from the year-earlier figure of 5.439 billion kWh. Exports of electricity declined on the back of maintenance of both units of Ignalina Nuclear Power Plant (INPP), said Rymantas Juozaitis, Lietuvos Energija CEO. He reminded that the first unit was stopped for maintenance last spring, while the second reactor, which was shut down temporarily in May, would be under maintenance until October 28.
"We expect the exports of electricity to reach some 7 billion kWh this year, however, the final figure will depend on the operations of Ignalina nuclear plant," Juozaitis noted.
The shutdown of first unit of INPP in 2005 would slash the exports of Lithuanian electricity by approximately one half; however, the government might be urged to close the reactor six months after the initial deadline of January 1. The decision on possible extension of operations of the unit would depend on recommendations of Lithuanian Nuclear Safety Advisory Committee concerning the safety of such an extension.
Lietuvos Zinios, Lietuvos Rytas, Respublika

Profit of Lithuanian credit unions grows
Members of the Lithuanian Association of Credit Unions posted LTL 633,900 in combined profits for the first nine months of 2004, up by 4.5 percent from profits of LTL 606,800 in the same period a year ago. The credit unions' aggregate assets reached LTL 156.4 million as of late September, soaring by 51.3 percent in year-on-year terms.
Their combined capital surged by 57.4 percent to LTL 20 million, deposits by 58.1 percent to LTL 122.5 million, and loans by 57.5 percent to LTL 119.4 million.
The association's members raised their aggregate net profits to LTL 890,200 in 2003, up from the 2002 net profits of LTL 385,100.
Verslo Zinios, Respublika

Tuesday, 12th of October

Vilniaus Vingis profit down but assets up
Vilniaus Vingis, a Vilnius-based manufacturer of deflection yokes for television picture tubes, has reported that its net profit before audit in the first nine months of the year went down 22.8 percent year-on-year to LTL 5.7 million.
In September, the property assessment firm Matininkai conducted a revaluation of the company's assets. The value of the company's property, which on its books is LTL 16.2 million, was found to be worth LTL 33.2 million on the market.
Domestic sales of the company amounted to LTL 36.5 million in the first three quarters of the year, a rise of 33 percent since the corresponding period of the previous year.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Record
Senukai, Lithuania's largest retailer of building materials and household goods, has exceeded the turnover of 2003 in the nine months of this year. Senukai achieved sales of EUR 211.3 million in the first nine months of 2004. The chain's sales for September rose by 25.7 percent, year-on-year, to EUR 27.7 million, according to the statement.
Lietuvos Rytas, Respublika

Fertilizers
Lithuania's phosphate fertilizer manufacturer Lifosa posted revenues of LTL 381.598 million for the first nine months of 2004, a rise of 17.4 from revenues of LTL 324.928 million a year ago. In September Lifosa's revenues soared by 37.1 percent, year-on-year, to LTL 50.371 million. Respublika

Monday, 11th of October

Siauliu Bankas posted LTL 5.6 million profit
Commercial bank Siauliu Bankas has announced that it earned net profits of LTL 5.63 million in the first three quarters of this year, an increase of 84 percent than profits during the same period of 2003 when it came in at LTL 3.058 million. The earned net profit constitutes 87 percent of the total projected profit for the full 2004 – LTL 6.5 million.
Donatas Morkunas, deputy chairman of the board for marketing and public relations in Siauliu Bankas, said that the bank in tends to pursue and exceed the profit plan this year.
Verslo Zinios

Pension funds intend to transfer to more risky ones
Lithuanian pension funds had invested 59 percent of their assets in foreign securities and 25 percent in domestic securities, and kept 16 percent deposited with banks as of late September, the country's Securities Commission (SC) said on Friday.
The data only covers investment by pension fund managers whose activities are supervised by the SC. According to the report, the percentage of investment in Lithuania remains stable, while the percentage of investment in foreign securities is rising as the amount of money kept in banks is declining.
Western European countries accounted for 57 percent of the total investment in foreign debt securities, and the Central and Eastern European (CEE) accounted for 43 percent. The percentage figures were similar in August. As much as 97 percent of investments in foreign equities was in the CEE countries.
Kauno Diena, Verslo Zinios

Profits of companies increased by one-third
Companies in Lithuania earned almost LTL 1.4 billion in income from sales of goods and services during the second quarter of 2004, a rise of one-third compared to the same period last year and by 17 percent more since the first quarter of 2004.
Profits of hotels and restaurants increased three times in the second quarter of this year, year-on-year, while profits of industry grew by over two times and retail trade and services soared by 1.5 time.
In the second quarter of 2004, 66 percent of all businesses in the country made a profit. In the second quarter of 2004, this figure amounted to 65 percent. Profitability stood at 70 percent for overland transport, 68 percent for telecommunications, 67 percent for business service providers, and 70 percent for construction.
Verslo Zinios

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