Observer "Lietuva"

WEEK 43rd 2004

Saturday, 23rd of October

Buss trips gain popularity
Increasing numbers of passengers, new routes, and an effective marketing strategy sent the sales of Ecolines, the largest bus carrier of passengers in Lithuania on international routes, up 1.5 times in the first nine months of this year.
The company's sales from January through September amounted to LTL 27 million. In the corresponding period of 2003, sales reached LTL 19 million.
The routes of Ecolines lead to 10 countries: Latvia, Russia, the Ukraine, Great Britain, Ireland, France, Belgium, the Netherlands, Norway and Sweden.
Lietuvos Zinios

Diesel and petrol prices equalled
Wholesale diesel prices, which turned to fast-track growth in recent weeks, have caught up with popular 95 gasoline brand as Mazeikiu Nafta (Mazeikiai Oil), Lithuania's oil refining and transportation complex, raised the wholesale prices of both fuels to LTL 2.43 per litre. The concern has warned that the wholesale prices of diesel fuel will rise by further 1 cent, to LTL 2.44 per litre. Meanwhile, the price of 95 gasoline will ease by 1 cent to LTL 2.42 per litre.
Other major chains of gas stations left the prices of diesel fuel and gasoline unchanged.
Respublika, Lietuvos Rytas

Mineraliniai Vandenys grow stronger
Mineraliniai Vandenys, a wholesaler of alcohol, tobacco, and consumer goods and a part of the concern MG Baltic, reported that its nine-month sales, including excise taxes and value-added tax, went up 25 percent year-on-year to LTL 310 million. The company plans LTL 0.5 billion turnover for the full 2004. Last year, the turnover of the company came in at LTL 369 million.
Lietuvos Zinios

Friday, 22nd of October

Insurance market grows
Lithuania's insurance market grew by 13.1 percent in the first nine months of 2004, year-on-year, with total direct premiums written reaching LTL 705.745 million, according to data released by the country's Insurance Supervisory Commission.
Direct non-life premiums increased by 14.8 percent, year-on-year, to LTL 543.718 million, accounting for 77 percent of the overall premiums, while life insurance premiums rose by 7.7 percent to LTL 162.027 million, or 23 percent of the total.
In September, total direct premiums written amounted to LTL 57.649 million, down by 9.5 percent from August. Non-life premiums shrank by 14.9 percent to LTL 38.824 million, while life insurance premiums were up by 4.1 percent to LTL 18.825 million, month-on-month.
Insurance claim payouts totalled LTL 220.255 million in the nine months ended September 30, down by 12.7 percent from the same period a year ago. Non-life insurers paid out LTL 197.994 million in claims (down by 14.1 percent), while life insurers paid out LTL 22.261 million in claims (up by 2.9 percent).
Respublika, Lietuvos Rytas

Third-pillar pension funds are set up in Lithuania
Three Lithuania's commercial banks have been given a go-ahead to establish additional voluntary fully funded third-pillar pension funds. On Thursday, the Securities Commission registered the rules and regulations of two third-pillar pension funds established by VB Investiciju Valdymas (VB Investment Management), an investment management arm of Vilniaus Bankas, a fund set up by Nord/LB Investiciju Valdymas (Nord/LB Investment Management) and a competing third-pillar pension fund created by Parex Investiciju Valdymas (Parex Investment Management).
Domestic bankers are consistently predicting rosy outlook for the new funds. By late 2005, those funds could attract up to 100,000 customers who would bring up to LTL 70 million in assets. The average monthly contribution would be some LTL 50-100.
Kauno Diena, Respublika

Lithuania to dispute with EU on Ignalina nuclear power plant
Lithuania will ask the European Union to allow it to postpone the closure of the first power unit of the Ignalina Nuclear Power Plant (INPP) for half a year, until next July, Prime Minister Algirdas Brazauskas confirmed on Thursday.
"We decided to appeal to the European Union and invite experts from the European Commission to come and see for themselves that our arguments are serious," he said.
Brazauskas said that a letter to the European Commission would be sent in the near future. The prime minister said that the decision was taken because of concerns over the reliability of power supplies in the region. Construction of two other power plants in the region is falling behind schedule. A 450-megawatt thermal power plant in Kaliningrad is unlikely to start operating until November 1, 2005, although it had originally been scheduled to be launched in 2004. A new 145-megawatt thermal power station in Riga will not come on-stream until November 2005 either.
"Under these circumstances, we cannot risk leaving this region without electrical power," he said.
The prime minister said that both of Ignalina's power units were in good technical condition and posed no safety concerns.
Lietuvos Rytas, Lietuvos Zinios, Kauno Diena, Respublika, Verslo Zinios

Thursday, 21st of October

Lithuania among the best performers of euro
The European Commission said in a report published on Wednesday that none of 11 countries seeking to adopt the euro fulfils all the criteria for joining the eurozone yet, but put Lithuania among those that have made the most progress. The European Commission said in its Convergence Report 2004 that Lithuania and another four countries – the Czech Republic, Estonia, Cyprus and Sweden – complied with the convergence criterion on price stability.
The average inflation rate in Lithuania during the 12 months to August 2004 was minus 0.2 percent, meeting the eurozone benchmark of being below 2.4 percent.
Lithuania is among five of the 11 countries covered in the report that have deficits below the threshold of 3 percent of GDP. Lithuania's general government deficit was 1.9 percent of GDP in 2003. The other four countries that fulfil this criterion are Estonia, Latvia, Slovenia and Sweden.
Lithuania is also among the eight countries that meet the criterion on the convergence of long-term interest rates. The average long-term interest rate in Lithuania was 4.7 percent in August, which was below the reference value of 6.4 percent.
Respublika, Kauno Diena, Lietuvos Rytas, Verslo Zinios

Insurers grow rapidly
Lithuanian's compulsory motor third-party liability insurance market grew by 30.2 percent, year-on-year, to LTL 220.033 million in the first nine months of 2004, according to preliminary data released by the country's Insurance Supervisory Commission.
Lithuania's insurers paid out a total of LTL 56 million in compulsory motor insurance claims during the nine months, up by 21.1 percent on the same time last year. In September, claims paid out reached LTL 6.6 million.
The compulsory motor third party liability insurance covered 1.128 million motor vehicles as of late September, up by 12.4 percent from the start of the year and up by 11 percent from the same month last year.
Lietuvos Zinios

Assets of Vilniaus Bankas
Lithuania's Vilniaus Bankas Group made a net profit of LTL 97.7 million and increased its assets by more than one-tenth during the first nine months of 2004. The group's net profit grew by 15.8 percent from LTL 84.4 million in the first nine months of 2003. Its pre-tax profit rose by 27.6 percent to LTL 107.7 million over the reporting period.
The group's loan portfolio grew by 16 percent to LTL 5.5 billion and deposits were up 14 percent to over LTL 5.5 billion.
Julius Niedvaras, Vilniaus Bankas president, said the good financial results were primarily due to strong growth in lending services, noting that the group expanded its portfolio of housing loans by 47 percent to LTL 901.2 million during the nine months.
Verslo Zinios, Lietuvos Zinios, Lietuvos Rytas

Wednesday, 20th of October

Lietuvos Energija sets up sales company
Lietuvos Energija (Lithuanian Energy), the state-run power transmission company, is setting up a subsidiary for the purpose of selling electricity. This will raise the number of independent electricity suppliers in Lithuania to seventeen.
"The new private limited company, which will be 100 percent owned by Lietuvos Energija, will be established on the basis of our Electricity Sales Unit and will sell electricity," Rymantas Juozaitis, CEO of Lietuvos Energija, said.
The subsidiary company will have an authorized share capital of LTL 300,000. The setting up procedures are expected to be completed by the end of this year.
Lietuvos Energija said in a statement that its management board took the decision to establish the subsidiary company on Monday.
The EU directives and Lithuania's Electricity Law require that separate legal entities carry out electricity transmission, distribution and supplies operations.
Respublika, Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Increase of assets
The market value of long-term tangible assets of Rytu Skirstomieji Tinklai (RST), the state-run operator of eastern part of the Lithuanian power grid, has surged by 3.3 times, to some LTL 2.4 billion, from LTL 727.1 million, after the appraisal conducted by Korporacija Matininkai, the leading property and business appraiser.
The assets' reappraisal will produce a positive effect on company's profit margin, however, in line with resolution endorsed by the State Control Commission for Prices and Energy, the company shall establish its ceiling prices of electricity on the previous value of its assets during the upcoming three-year period.
RST reported unaudited pre-tax earnings of LTL 12.9 million for the first six months of 2004, a rise of 3.2 percent from the pre-tax profit of LTL 12.5 million a year earlier. The company's operating revenues increased by 4.4 percent, to LTL 370.9 million, on the back of increase in electricity sales. Kauno Diena, Verslo Zinios, Lietuvos Rytas

Former Vilnius municipality to become a mall
Irish realtor Duke House Asset Managers and its Lithuania-registered subsidiary Ajolas intend to invest some LTL 121 million into the mall Gedimino 9, which will settle at the former building of the local authority of Vilnius at Gediminas avenue. The new mall will be opened in spring 2006.
"We have chosen Vilnius as the growth of retail market here is far more significant, compared with other Baltic countries," Bernard Hamill, Duke House Asset Managers executive partner and Ajolas' chairman, said.
The area of new 5-storey mall, which will create some 600 regular jobs, will reach some 18,000 square meters. The construction works are expected to be launched next year. The project will be managed by Constructus, the leading country's construction company.
Kauno Diena, Respublika

Tuesday, 19th of October

One more destination of LAL - Milan
Lithuania's flagship carrier Lietuvos Avialinijos (Lithuanian Airlines, or LAL) will open new routes and expand its current flight schedule in the coming winter season.
At the onset of winter season on October 31, LAL will open a new route from Vilnius to Milan; will offer more flights to London and Copenhagen and more seats on flights to Moscow.
"We believe that the new route will be equally attractive for both business travellers and tourists. The Milan route will be operated by Saab 2000, however, in future it is expected to be replaced by Boeing 737," Vidas Zvinys, LAL CEO, said.
The route is the second new flight by LAL this year. In early August, the company opened a route to Dublin. Moreover, from late October, the company will raise its number of flights to London to 14, from 12 per week, while the number of weekly flights to Copenhagen will rise to 11, from 10. Lietuvos Rytas, Verslo Zinios

Hanner sold Europa
Baltic Property Trust Secura (BPTS), the biggest institutional property investor in the Baltics, has taken over control of the Europa shopping centre in Vilnius from Lithuania's real estate development company Hanner. BPTS and Hanner respectively hold 70 and 30 percent interest in BPTS Europa, the owner of the shopping mall, as a result of this transaction.
The current shareholder structure will remain in place for three years. Hanner will have an option to sell its shareholding to BPTS after this period expires. Hanner and BPTS would not disclose the value of the deal, but said that it was the biggest ever property transaction in the Baltics.
It has announced earlier that investment in the Europa shopping centre reached LTL 90 million. Respublika, Verslo Zinios, Lietuvos Rytas

Co-branded Hansabankas and VP Market payment cards
Hansabankas and retailer VP Market have teamed up to launch a set of co-branded cards. Hansabankas announced on Monday that it was issuing a set of chip cards - debit card, credit card and youth card - in early December. All cards will have a validity period of three years.
The co-branded cards will give Hansabankas' customers access to VP Market's discount program. Verslo Zinios, Respublika, Lietuvos Rytas

Monday, 18th of October

Branches help to window producers
Wooden window producer Doleta reported LTL 11.6 million turnover over the nine months of this year, a rise of 38.8 percent since the same period last year when it came in at LTL 8.36 million. According to Vytautas Silevicius, director of the company, the stable growth of the company was predetermined by reformed activities of the company’s representative offices a year ago. Four outlets in Lithuania became separate joint-stock companies, while secondary company Doleta Langai started exporting the production since 2004.
Doleta does not revise forecasts for this year and expects to increase the turnover by 20 percent up to LTL 16 million for the full year of 2004.
Verslo Zinios

E-banking gains popularity
Ten Lithuanian commercial banks had a total of 848,445 internet banking users at the end of September, up by 49.6 percent from 567,195 users a year ago. The number of online banking customers has risen by 32.7 percent from 639,391 users registered at the beginning of this year.
Hansabankas remains the leading internet banking service provider in Lithuania with 402,400 e-banking customers as of late September, up by 26 percent from 319,300 users in the same period last year and up by 17 percent from 344,100 at the start of this year.
Vilniaus Bankas had 339,000 internet banking customers at the end of September, up by 59 percent from 213,000 users a year ago and up by 39 percent from 244,800 at the start of 2004.
Nord/LB Lietuva, the third-biggest bank by assets, had 53,700 online banking users at end-September, three times as many as in the same period a year ago (17,600) and more than twice as many as at the start of this year (22,300).
Lithuanian banks forecasted in the summer that the total number of internet banking users in this country would rise by around 37 percent to 875,800 by the end of the year, but some of them, including Hansabankas, have exceeded their annual estimates already.
Lietuvos Rytas

Narbutas & Ko steps to Ukraine
Narbutas & Ko, the leader in the Lithuanian furniture producer market, has expanded its Kiev-based furniture store due to a sales increase in the Ukraine. Last week, Narbutas & Ko officially opened its expanded 300-m2 store in the Ukraine.
"We had a store before, but now we opened a larger one in a better place," Arvydas Paunksnis, the head of Narbutas & Ko, said.
Narbutas & Ko sells about a fifth of its production in the Ukrainian market. The company also exports its production to Great Britain, Ireland, Russia, Latvia and Germany. Narbutas & Ko has stores in Moscow, Riga and in the five largest cities in Lithuania.
According to preliminary data, sales of Narbutas & Ko grew by about 29 percent to LTL 45 million in the first nine months of 2004 as compared to the corresponding period of the previous year. The group's consolidated sales soared by 20 percent to LTL 56 million last year.
Kauno Diena

Previous weeks:
Back to
Baltic Weekly MonitorA

 TERMS & CONDITIONS / KÄYTTÖOIKEUDET. © Oy Compiler Ab. All rights reserved.