Observer "Lietuva"

WEEK 53rd 2004

Friday, 31st of December

Assets of banks in Lithuania grow 23 percent
The growing Lithuanian economy led to a rapid increase in the assets, loans, and deposits of the banks operating in the country.
According to the country's central bank, the combined assets of the 10 commercial banks and two branches of foreign banks in Lithuania amounted to LTL 27.121 billion, an increase of 23.1 percent compared to the beginning of the year. At the end of November, the loans issued by the banks went up 33.6 percent to LTL 16.169 billion, and deposits grew 21.3 percent to almost LTL 13.58 billion.
By the size of assets, loans, and deposits, the leading position belongs to Vilniaus Bankas, which is under the control of the Swedish group SEB. Its assets amounted to LTL 9.089 billion at the end of December 2003.
Hansabankas, which belongs to Hansabank, the largest financial group in the Baltic states, is in the second place with assets of LTL 6.148 billion, loans of LTL 3.597 billion, and deposits of LTL 4.981 billion.
Third place is occupied by NORD/LB Lietuva, with assets of LTL 3.273 billion, and Snoras remains in fourth place with assets of LTL 1.819 billion.
Lietuvos Zinios

Preparations for shutdown of Ignalina n-plant completed
In the framework of its obligations to the European Union, Lithuania will start on Friday the decommissioning of one of Ignalina's Chernobyl-style nuclear reactors after over two decades of operations.
"We will start the decommissioning of the reactor at 2 pm and it should come to full stop at about 9 pm," Viktoras Sevaldinas, Ignalina Nuclear Power Plant CEO, told.
However, the reactor's activities will be fully halted in about 30 years only.
"It will take another approximately five years to remove the used nuclear fuel assemblies, and other work will be started then, therefore the decommissioning process is rather long," said Sevaldinas.
Lithuania committed itself to closing Ignalina's first RBMK-type reactor this and the second power unit in 2009 in its EU pre-accession talks. The two nuclear reactors with capacity of 1,300 megawatts each have been considered generally unsafe after the 1986 Chernobyl accident in spite of hundreds of millions of litas invested into their safety.
In 2001-2003, the EU granted Lithuania LTL 828 million for preparatory work. The EU has approved LTL 1.1 billion in assistance to Lithuania for the 2004-2006 period, and the European Commission has proposed granting another LTL 2.8 billion in 2007-2013.
Lietuvos Zinios, Kauno Diena, Lietuvos Rytas

Consolidated debt of public sector up LTL 510 million
The consolidated public sector debt followed the growing foreign debt to reach LTL 12.515 billion at the end of September, LTL 510 million higher than it was at the end of December 2003.
In the third quarter, the state debt however decreased LTL 91.6 million and amounted to 20.5 percent of the gross domestic product estimate for the year, according to the statement released by the ministry of finance.
At the end of the third quarter, the debt of the central government was LTL 11.878 billion, local government debt amounted to LTL 537.8 million, and debt of social security funds was LTL 353.2 million. At the end of September, the foreign debt equalled LTL 7.85 billion, and the domestic debt stood at LTL 4.665 billion.
Verslo Zinios

Thursday, 30th of December

Direct foreign investments climb 9 percent this year
Accumulated foreign direct investment (FDI) in Lithuania reached LTL 14.98 billion as of late September, rising by 9.3 percent since the start of the year, the central bank said on Wednesday.
Accumulated FDI totalled LTL 13.699 billion at the beginning of 2004.
FDI per capita stood at LTL 4,364 at the end of September, according to the Bank of Lithuania's report.
FDI inflow into Lithuania reached LTL 5.19 billion during the first nine months of 2004, up by more than LTL 1.5 billion compared with the same period in 2003.
In the third quarter, FDI inflow amounted to LTL 1.27 billion.
The largest portion of this year's FDI inflow was in the manufacturing sector (LTL 953.8 million), utilities (LTL 267.8 million), wholesale and retail trade (LTL 251.4 million), and financial intermediation activities (LTL 181 million).
Respublika, Verslo Zinios, Lietuvos Zinios

VP Market to increase capital by almost LTL 450 million
VP Market, the operator of the largest retail chain in the Baltic countries, is raising its authorised capital LTL 447 million to LTL 556 million.
"The boost of the authorised capital resulted from reorganisation", Viktorija Jakubauskaite, a press officer at VP Market, told.
In the previous week, the business group announced that it had completed the reorganisation of its management framework. Its retail companies, chemists, and real estate operators will be run by Eurovalda, a newly founded holding.
Verslo Zinios

Fixed assets of Lietuvos Energija revalued
The value of the long-term assets of Lietuvos Energija, the national operator of the electricity transmission network in Lithuania, has increased to LTL 3.62 billion, 3.7 times higher than it was at the end of 2003.
"The increased value of the assets will send depreciations costs up, but will have no negative effect on cash flows or earnings before taxes, interest, and depreciation (EBITDA)," Rimantas Sukys, the company's finance director, said.
The operator however has not yet released information on the expected growth of its depreciation costs.
Lietuvos Zinios, Respublika, Verslo Zinios

Wednesday, 29th of December

Lithuania's Gubernija brewery to raise stock capital
Gubernija, a major Lithuanian beer producer, is planning to increase its stock capital by LTL 2.179 million through a new share issue without granting pre-emptive rights to existing shareholders.
Gubernija's general meeting of shareholders approved the stock capital increase on Monday, said Violeta Dunauskiene, director of the company's information office.
"The new share issue would give the investor a 10 percent equity interest in Gubernija. The nominal value of one share will be LTL 1, while the issue price is being negotiated with a potential investor," she told.
Gubernija currently has a stock capital of LTL 21.786 million.
Lietuvos Zinios, Respublika

Unemployment rate
In the third quarter of this year, the employment rate in Lithuania amounted to 10.6 percent. The number of unemployed decreased 10 percent year-on-year to 171,700. The unemployment rate in the third quarter was the lowest in recent years, the Lithuanian statistical department has reported.
7,000 workplaces were available for hired workers in the third quarter of 2004; 6,000 workplaces were available in the service sector. The rest workplaces were available in the sectors of industry, transport, storage, telecommunications and construction. Lietuvos Rytas, Respublika, Kauno Diena, Verslo Zinios

Long-distance bus fares set to rise in Lithuania
Lithuania's National Control Commission for Prices and Energy on Tuesday approved new maximum rates for long-distance bus services.
The regulatory authority told that it agreed to a request from Linava, the national road carriers' association, to increase the maximum rates by LTL 0.02 per kilometre.
The average fare for long-distance bus trips currently ranges from LTL 0.11 to LTL 0.18 per kilometre.
Linava based its request for a rise in bus fares on increased diesel fuel prices and changes to taxes on transportation services.
Based on data from nine companies that account for more than 70 percent of all long-distance routes operated by Linava members, operating costs per kilometre have gone up by 13.65 percent or almost LTL 0.16 since 1999.
The total number of passengers on long distance bus routes rose by around 13 percent to 13.689 million in 2003. The market started to show signs of recovery in 2001 after a slowdown in previous years.
Kauno Diena, Lietuvos Rytas, Respublika, Verslo Zinios

Tuesday, 28th of December

Flow of SMS
Subscribers of Omnitel sent 7.25 million of SMS on December 25; that is 70 percent more if compared with the same day of 2003. According to Darius Maikstenas, head of strategic communication in Omnitel, subscribers of Omnitel sent 4 times more SMS on December 25 if compared with the ordinary day of December.
Subscribers of Bite, sent 2 millions of SMS on the Christmas day; that is three times more if compared with ordinary days.
Representatives of Tele2 do not indicate the exact number of sent SMS; however, Petras Masiulis, CEO of Tele2, ensures that the number of SMS increased for sure.
MMS were also popular among the subscribers of Omnitel. 5.8 times more MMS were sent during Christmas this year.
Paulius Dambrauskas, head of private clients marketing in Bite, maintains that the number of MMS sent this Christmas was 20 times higher than last year on Christmas time.
Lietuvos Rytas, Kauno Diena

Stumbras vodka receives silver medal in U.S.A.
Originali Lietuviska Auksine, a vodka produced by Stumbras, won a silver medal at the most prestigious annual competition for alcohol drinks in the U.S.A. This brand of vodka was rated as "highly recommended" in a competition against 39 other brands of non-flavoured vodka.
"Having done a great job with the Originali Lietuviska Auksine in the East -- in Russia, which is famous for its vodka -- we have also won recognition in the West. We have also earned the possibility to expand our exports to the United States, which is the third biggest market in the world," said Ceslovas Matulevicius, the chief executive of Stumbras.
Lietuvos Rytas

Grigiskes won LTL 2.5 million in a case against the municipality of Vilnius
Grigiskes, the leading producer of hardboard and hygienic paper in Lithuania, on Monday won LTL 2.5 million in a case against the municipality of Vilnius.
The Lithuanian Court of Appeals left unchanged the ruling of Vilnius District Court, which ordered the municipality to pay LTL 2.14 million compensation (LTL 0.333 million for interest on the defaulted payment, and 5 percent annual interest) to the hardboard manufacturer.
The manufacturer launched a lawsuit against the municipality after it failed to pay for the assets taken over from Naujieji Verkiai, a company that later merged with Grigiskes. The local government in Vilnius took over an unfinished sewage collector from the company.
Lietuvos Zinios, Respublika, Verslo Zinios, Lietuvos Rytas

Monday, 27th of December

Opposite views about taxes
The leaders of the ruling coalition do not have a single opinion about whether taxes should be increased or not. Social Democratic Prime Minister Algirdas Brazauskas has hinted that the tax burden should be increased, whereas Economy Minister Viktoras Uspaskikh, the leader of the Labour Party, says he does not have such plans. "This issue will be discussed at the strategic council of the coalition partners. So far our plans do not contain such an item - a tax increase," Uspaskikh said.
Both Brazauskas and Finance Minister Algirdas Butkevicius have mentioned a tax on real estate for "the rich". The finance minister also has mentioned a tax on vehicles.
At the present time, the personal income tax rate in Lithuania is 33 percent, whereas the corporate profit tax rate is 15 percent. Financial analysts say reducing the personal income tax rate by 3 percent, as has been suggested, would not be enough.
Lietuvos Zinios, Kauno Diena

Internet usage has increased
Some 766,600 persons in Lithuania, accounting for 22.5 percent of the country's population, went online at least once a month last autumn, up by 29 percent from 593,300 people a year ago and up by 19 percent from 645,900 people last summer, according to a survey carried out by TNS Gallup.
The percentage of the adult population, aged between 15 and 74, who surfed the web at least once a month increased to 29.2 percent, from 22.6 percent in the autumn of 2003 and 24.6 percent in the summer of 2004.
The poll found that 617,000 people (23.5 percent) browsed the net at least once a week, up by 20 percent from the same period last year (514,600 persons, 19.6 percent).
Some 31.1 percent of those polled went online at least once in six months, up from 24.7 percent a year ago and 28.1 percent last summer.
The percentage of Internet users is higher among young people. Of approximately 816,500 people who used the Internet during the last six months, 42 percent were in the age group of 15 to 24, 25.2 percent were 25 to 34, 24.6 percent were 35 to 49, and only 8.3 percent were 50 to 74.
Lietuvos Zinios

Turnover of Vilnius Baldai goes up
Vilniaus Baldai, one of Lithuania's leading furniture manufacturers, reported a 16 percent year-on-year growth to LTL 9.87 million in pretax earnings for the first eleven months of 2004.
Vilniaus Baldai said it expects to meet its annual pretax profit target of LTL 10 million or even exceed it. The company's pretax earnings for November, however, fell by 7.2 percent year-on-year to LTL 427,000.
Verslo Zinios

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