||WEEK 48th 2004
Saturday, 27th of November
Hansabank expects the biggest growth in Lithuania
Hansabank, the largest Baltic finance group, cherishes hopes to enter the ranks of most sophisticated and best banks in Europe by 2007, and sees its Lithuania's business as an engine for overall growth. The rise in Hansabank earnings was rather modest amid a solid decline in margins in recent years, he noted. However, he predicted a faster growth of group's net profit as the margins were not expected to drop further in future.
Eyeing a fast growth in economic and financial sectors, Hansabank group raised its medium-term objectives for 2005-2007. The group's ROE remained unchanged, at no less than 20 percent, while the minimum rise in pre-tax earnings was boosted to 15 percent, from 10 percent. The cost income ratio should not exceed 45 percent, down from previous forecasts of 50 percent, while risk costs should make up 0.5 percent, down from previously predicted 0.6 percent.
Seafood maker enters Hungarian market
Lithuania's seafood producer Viciunai Group has started producing fish fingers for CBA, Hungary's largest retailer. Viciunai has signed a one-year export contract to supply fish fingers to the biggest Hungarian retail trade chain CBA, which sells them under its own brand name.
Internet will be provided to 300 remote villages of Lithuania
Wireless internet provider Telecentras and the Ministry of Interior have signed agreement on establishment of 300 public internet access points in remote rural areas of the country. 2-5 computers with internet connection will be installed in countryside schools, culture centres and libraries by spring of 2005. People will be able to use internet services free of charge in the public internet centres. Telecentras has obligated not only to install access points but also to provide internet for 1.5 year. PHARE will allot LTL 2 million for the implementation of the project.
Friday, 26th of November
Ukio Bankas entered Kiev
Ukio Bankas, a commercial bank in Lithuania, opened an office in the Ukrainian capital of Kiev this week. Plans to open an office in Moscow, Russia, are also underway.
"The office will provide banking services to entrepreneurs in Ukraine and collect and distribute information to Lithuanian entrepreneurs about business conditions in this country," Edita Karpaviciene, the chairwoman of the board at Ukio Bankas, said.
The chairwoman stated that running an office in a country with a history of partnership with Lithuania was vital not only for the bank but also the economic relations between Lithuanian and Ukrainian businesses.
According to figures obtained from Statistics Lithuania, the country's exports to the Ukraine advanced almost 51 percent year-on-year to LTL 519 million during the first three quarters of 2004. Imports from Ukraine rose nearly 44 percent to LTL 386 million during the period.
Lietuvos Zinios, Verslo Zinios
Wages gradually go up
Average monthly gross earnings in Lithuania rose by 7.3 percent in the third quarter of 2004, in year-on-year terms, and reached LTL 1,261, the Statistics Department has reported. Average monthly gross earnings in the public sector grew by 8 percent year-on-year to LTL 1,306, while average earnings in the private sector went up by 7 percent to LTL 1,226.
Monthly wages of manual workers averaged LTL 931.6 in the third quarter, up by 8 percent from the same quarter in 2003. Non-manual workers earned LTL 1,564 on average, a rise of 6.9 percent.
Through 2003, average monthly wage in Lithuania hiked 5.5 percent versus 11.5 and 9.4 percent increase in Latvia and Estonia.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios, Respublika
Panevezio Statybos Trestas acquired 100 percent of Alinita
Panevezio Statybos Trestas (PST), a leading construction company in Lithuania, acquired the entire 100 percent portfolio of Alinita, a manufacturer of ventilation and air conditioning systems from western city of Klaipeda. The deal, the sum of which was not unveiled, was concluded on Nov 24.
PST preliminary earned LTL 1.203 million pre-tax profit in the first nine months this year, an increase of 13.7 percent compared to the corresponding period of 2003. The sales of PST in the first eight months of the year reached LTL 85.8 million, 6.2 percent higher than sales during the corresponding time period in the previous year (LTL 80.8 million).
Verslo Zinios, Respublika
Thursday, 25th of November
Marriott and Kempinski enter Lithuanian market
Prestigious international hotel chains Marriott and Kempinski are planning to expand into Lithuania in anticipation of tourism boom in this country after its accession to the EU in May.
Representatives of Marriott, one of the largest worldwide hotel chains, held talks with a number of Lithuanian hotels over their inclusion into its network in 2003 but no final decisions have been made yet. Kempinski Hotels&Resorts is planning to open a five-star hotel in Vilnius in 2006. The hotel will have 107 rooms, restaurants, conference facilities, a business centre and a fitness club.
A two-star 150-room hotel is also under construction in the Lithuanian capital. It will be part of Meriton Hotels, a new hotel chain that is being set up in the Baltics.
International hotel chains already present in Lithuania include Hotusa, Relais & Chateaux, Radisson SAS, Scandic Hotels, Le Meridien, Best Western, Summit, Holiday Inn, Crown Plaza, Reval Hotel Group and Novatel. There are around 210 hotels across Lithuania in total.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios
Apranga takes over La Perla
Apranga, Lithuania's largest apparel retail chain under the control of MG Baltic concern, took over the business of luxury lingerie producer La Perla in Lithuania.
La Perla store in capital Vilnius will become the 40th outlet of Apranga in Lithuania, the apparel chain reported on Wednesday.
According to the company statement, Apranga now has 7 stores of luxury goods, 4 of which (Hugo Boss, Max Mara, Mados Linija, and La Perla) are in Lithuania, and 3 (Hugo Boss, Emporio Armani, GF Ferre), in Latvia.
Verslo Zinios, Lietuvos Rytas, Respublika
Revenues of broadcasters increased
Combined revenues of Lithuanian-registered commercial TV and radio broadcasters rose by 19 percent year-on-year to LTL 151.9 million in the first nine months of 2004, an increase of 19 percent since the same period a year ago when they came in at LTL 127.5 million.
Commercial TV stations generated the biggest portion of revenues, at LTL 21.8 million. Cable TV operators were the second with revenues of LTL 13.3 million and radio stations were the third with 5.9 million.
Wednesday, 24th of November
Alna to look for another investor
Alna, one of Lithuania's leading IT service companies, and its shareholders are to buy 15 percent of shares in Alna from Scandinavian Baltic Development (SBD), an investment fund controlled by the European Bank for Reconstruction and Development (EBRD), by January 6, 2005.
"The agreement, which was reached before the fund opted to invest into our company, stipulates that SBD may sell the shares. Moreover, as far as we know, this fund is going to withdraw from Lithuania," Valentinas Milaknis, Alna's board chairman and key shareholder, said.
Lietuvos Rytas, Verslo Zinios
Kia ad catches eye of Equal Opportunities Ombudsperson
Lithuania's Office of is considering launching a probe into complaints against an advertisement of Kia cars featuring a topless girl.
The ad, which has appeared in the local press, shows two cars - Kia Cerato and Kia Picanto - and points out their advantages. Above, there is a picture of a topless girl wearing a sign on her bust reading, "Kia's 2 Big Pluses."
Ausrine Burneikiene, the equal opportunities ombudsperson, said that her office would decide whether to investigate the KIA ad in the near future.
Burneikiene's office is currently conducting a probe of an ad campaign of RIMI, one of Lithuania's largest grocery chains, which offers: "Pay for one and get another one free from RIMI." One of its posters features a bridegroom with two brides.
Profit of Lietuvos Energija to exceed LTL 100 million
Lietuvos Energija (Lithuanian Energy), the state-run power transmission company, has announced an unaudited pre-tax profit of LTL 85 million for the first ten months of 2004, a decline of LTL 6 million since entire 2003 but a rise of LTL 15.3 million over the respective period.
The annual profit figure, at LTL 80 million, which is set forth in the company's business plan for 2004, may be exceeded by over LTL 20 million, the company has announced to the Vilnius' Securities Exchange (VSE).
The company exported 5.3 billion kWh electric energy over the ten months of 2004, 0.5 billion kWh leas than in respective period in 2003.
Tuesday, 23rd of November
Insurance market grew 13 percent this year
Lithuania's insurance market grew by 13 percent in the first ten months of 2004, year-on-year, with total direct premiums written reaching LTL 778.8 million, the data released by the country's Insurance Supervisory Commission has shown.
The combined amount of direct insurance premiums collected by non-life insurers increased by 14.6 percent, compared with the January-to-October period of 2003, to reach LTL 597.3 million, or 76.7 of total premiums written. Life insurers collected LTL 181.5 million in premiums, a rise of 7.9 percent from the year-earlier figure, and accounted for 23.3 percent of total premiums' figure.
Insurance claim payouts totalled LTL 245.1 million, a decline of 10.4 percent from the figure in the January-to-October period of 2003. Non-life insurers paid out LTL 219.8 million in benefits, some 11.6 percent less in year-on-year terms, while the payouts by life insurers climbed by 1.9 percent, to LTL 25.3 million in the reporting period.
Lietuvos Draudimas held a 30.3 percent share of domestic non-life market in the ten-month period, with LTL 180.885 million in premiums written. PZU Lietuva group collected LTL 99.45 million in non-life insurance premiums, a surge of 25 percent from the year-earlier figure, and boosted its share of non-life insurance market to 16.7 percent, from 15.3 percent. Ergo Group wrote LTL 89.351 million in non-life insurance premiums, a decline of 8.4 percent from the first ten months of 2003, and held 15 percent of domestic non-life insurance market.
Respublika, Lietuvos Rytas,Verslo Zinios
A jump of Apranga profit in October
Apranga, Lithuania's biggest garment retailer, posted a pre-tax profit of LTL 6.556 million for the first ten months of 2004, a rise of 12.8 percent year-on-year.
The group's pre-tax profit for October came in at LTL 2.853 million.
"The Zara project has been a success in Vilnius, Riga and Tallinn," Rimantas Perveneckas, CEO of Apranga, said.
Apranga has not yet completed drawing up its financial plans for 2005 but it expects to have them in place in December. The preliminary plans are to open five new stores and renovate another five in the coming year. Apranga expects to exceed the targeted pre-tax income and turnover forecasts of LTL 8 million and LTL 138 million respectively for the full 2004.
Lietuvos Rytas, Respublika
Trade giants crossed swords
The Baltic retail giant VP Market, which is set to enter the building and household goods market soon, has lodged a complaint with the Lithuanian Competition Council against Senukai, Lithuania's largest DIY chain. VP Market accuses Senukai, which is controlled by Finland's Kesko, of pressuring its suppliers not to sell their products to Ermitazas, the new building and household goods chain that is currently being set by VP Market.
Ignas Staskevicius, VP Market's board chairman, has said that some suppliers have recently refused to supply their goods to Ermitazas. Staskevicius said that he had information that Senukai had sent a letter to at least 50 suppliers asking them not to supply goods to the rival DIY chain. Senukai's warning has had an effect on suppliers and at least five companies have refused to cooperate with Ermitazas.
Monday, 22nd of November
Transport insurance market expands
Lithuanian's compulsory motor third-party liability insurance market grew by 29.8 percent year-on-year to LTL 229.5 million in the first ten months of 2004, according to data released by the country's Insurance Supervisory Commission. Eleven insurance companies that are providing compulsory auto insurance concluded a total of 2.223 million contracts during the ten months.
The number of standard insurance contracts totalled 1.717 million, generating LTL 203 million in premiums written.
The insurers also concluded 51,200 group insurance contracts (LTL 5.3 million in premiums written), 232,200 border insurance contracts (LTL 11.5 million in premiums) and 223,300 international insurance contracts (LTL 9.8 million in premiums).
In October compulsory motor insurance premiums reached LTL 9.4 million. The insurers paid out a total of LTL 64 million in compulsory motor insurance claims during the ten months, up by 23.5 percent on the same time last year. In October claims paid out amounted to LTL 8 million.
Sales of industry grew in the country in ten months
In the first ten months of 2004, the country's mining and quarry industries boosted sales 12.1 percent on a year-on-year basis. Excluding refined oil products, the industrial sales were 7.7 percent higher in the ten months. The growth of total industrial sales in October, compared to the respective month of 2003, constituted 6.2 percent. The year-on-tear increase in the sales, excluding refined oil products, stood at 3.7 percent.
From September, the sales of television and communication equipment climbed 13.7 percent in October. The producers of medical, precision and optical facilities posted 8.1 percent bigger sales, manufacturers of metal products (except machinery and equipment) posted a rise of 6 percent, those of textile products recorded a rise of 5.5 percent, and furniture makers had 5 percent larger sales month-on-month.
However, foodstuff and drink producers suffered a 0.8 percent decrease in sales during the previous month. Timber sales slumped 1.2 percent, sales of electric machines and appliances went down 1.4 percent, and machinery and equipment sales declined 9.5 percent from September.
Russia links exports possibilities with other problems
Russia has delayed releasing the list of Lithuanian food producers cleared for exports to the neighbouring country as it is waiting for the conclusion of negotiations on other issues, including Russian transit to Kaliningrad.
Kazimieras Lukauskas, head of the Lithuanian State Food and Veterinary Service, said on Friday that Russia had promised to give a date for the announcement of the list of exporters two days earlier, but it failed to do so. Russia now promises to set a date after the negotiations with Lithuania on other issues are over.
A team of experts from the Russian veterinary inspected 36 Lithuanian companies in late October. Russia then promised to set a date for the announcement of companies certified for exports within three weeks after the inspections were completed. Russian experts issued permits to only 33 out of 65 companies they inspected during their first visit to Lithuania in July.
Baltic Weekly MonitorA