Observer "Lietuva"

WEEK 10.2005

Saturday, 12th of March

More new automobiles were sold in Lithuania
Lithuania's new car sales totalled 2,042 units in the first two months of 2005, a rise of 25.1 percent from the year-earlier figure of 1,632 new passenger cars and light commercial vehicles, the market research company AutoTyrimai reported on Thursday.
In February alone, new car sales came in at 1,099 units, a surge of 41.4 percent versus February 2004. Compared with January, new car sales in the country increased by 16.5 percent.
A total of 1,911 vehicles or 93.6 percent of all new cars sold in the country in the first two months of 2005 were registered in Lithuania. In February alone, 85.4 percent of total sales figure, or 938 units were registered in the country.
The German group Volkswagen led other carmakers in terms of Lithuanian sales with 296 new personal and commercial vehicles sold in the first two months of 2005. France's Renault was second with 233 cars and other French carmaker Peugeot was third with 198 cars sold.
Lietuvos Zinios, Respublika

Exports grew at more rapid pace than imports
Lithuanian exports grew by 27 percent in January from the same period last year, while imports rose by 14.2 percent, the Statistics Department has reported. On a monthly basis, exports fell by 8.3 percent and imports were down 20.3 percent in January versus December. Exports totalled LTL 2.201 billion and imports reached LTL 2.473 billion in January. The foreign trade deficit narrowed by 37 percent year-on-year to LTL 272.2 million.
Intermediate goods accounted for 57 percent of January's exports and 65.7 percent of imports. Consumer goods made up 25.1 percent and 17.2 percent, respectively. Gasoline accounted for 8.8 percent of total exports. Lithuania's main export partners were France with 10.7 percent of total exports, Germany with 10.2 percent, Russia with 9.0 percent, Latvia with 8.1 percent, and the US with 5.9 percent. The CIS accounted for 15 percent of exports and 34 percent of imports.
Lietuvos Zinios, Lietuvos Rytas

Lietuvos Draudimas earned profit of LTL 31.6 million
Lietuvos Draudimas, the country's largest non-life insurer, posted a net profit of LTL 21.6 million in 2004, down from a net profit of LTL 54.7 million in 2003. The 2003 financial result reflected LTL 37.7 million of extraordinary gains on the sale of 100 percent of the firm's life insurance unit, Lietuvos Draudimo Gyvybes Draudimas, and a 2 percent stake in its credit insurance unit, Lietuvos Draudimo Kreditu Draudimas, and revaluation of real property. Excluding the extraordinary gains, Lietuvos Draudimas' net profit rose by 23 percent last year compared with the previous year. Lietuvos Draudimas held a 30.6 percent share of the domestic non-life insurance market in 2004, with LTL 208 million in premiums written.
Lietuvos Rytas

Thursday, 10th of March

Government gave go-ahead to LAL’s privatisation
The Lithuanian government on Wednesday approved a program for privatization of the national air carrier Lietuvos Avialinijos (Lithuanian Airlines, or LAL) setting the initial price at LTL 9.3 million. Potential buyers of 100 percent of shares in the flagship air carrier will have to invest at least LTL 10 million in its stock capital over a period of 2 years and retain at least 80 percent of jobs for a year.
"Compared with the earlier draft program, timeframes have changed and the requirement for retaining jobs has increased (from 70 percent)," Povilas Milasauskas, general manager of the State Property Fund (SPF), said.
Public tender documents will be available for purchase from April.
The government's earlier attempt to sell a 34 percent stake in LAL fell through almost two years ago after the Scandinavian air carrier SAS, the only potential buyer, decided to pull out.
Respublika, Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios

Snaige turned to Belarus
Snaige, producer of refrigerators in the Baltics, resumed deliveries of refrigerators to Belarus, following a long interval. The shipments for Belarus come from the subsidiary of Snaige based in Kaliningrad. Beginning from March, Snaige brand refrigerators will be traded in the stores of Minsk and other major Belarusian cities.
In 2004, the Lithuanian refrigerator maker exported 72 percent of its total output to CIS countries. The percentage increased from 48 percent in 2003.
Snaige pre-tax profit went up 9.1 percent to almost LTL 32 million in 2004.The annual sales of Snaige amounted to LTL 314 million in 2004, an increase of 12.7 percent year-on-year.
Verslo Zinios, Respublika, Lietuvos Rytas

Polish will own Dvarcioniu Keramika
Poland's ceramic tile producer Opoczno, controlled by Credit Suisse First Boston Ceramic Partners consortium, has acquired 60.25 percent in Dvarcioniu Keramika, the leading Baltic producer of ceramic tiles. The Polish company acquired the majority holding in Lithuania's tile maker in eight block trades for LTL 11.5 million on Vilnius Stock Exchange (VSE) in early March. Credit Suisse First Boston Ceramic Partners, which controls 99 percent of Opoczno, has been set up by investments funds under the management of Credit Suisse First Boston International Private Equity Partners and Enterprise Investors.
Dvarcioniu Keramika trimmed its annual net losses eightfold, to LTL 822,500, from LTL 6.9 million in 2003. Company's sales declined by 11.6 percent, year-on-year, to LTL 43.11 million.
Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas, Respublika

Wednesday, 9th of March

Inflation stood at 0.2 percent in February
Increased costs for transport services, food products, and non-alcoholic beverages led to 0.2 percent monthly inflation in February, although statisticians had forecast zero percent for the previous month. The inflation rate over the past 12 months reached 3.3 percent. In the previous month, prices went up 1.9 percent for transport services and 0.6 percent for food products and non-alcoholic beverages. This was in part compensated by the drop of 3.1 percent in prices for clothing and footwear. Prices in February were also influenced by a rise in costs of 0.3 percent for accommodation, water, electricity, gas, and other fuels and of 0.5 percent for healthcare products and services. Last month, prices for consumer products and services went up 0.1 percent and 0.3 percent respectively.
Prices for healthcare products and services were mostly affected by increased costs for the services of dentists - 1.7 percent, pharmaceuticals - 0.3 percent and optical products - 2.2 percent.
Respublika, Kauno Diena, Lietuvos Zinios

Srumbras will pay dividends
Stumbras, the second-largest Lithuania's spirits producer controlled by multi-business concern MG Baltic, will distribute LTL 15.3 million in earnings, and will earmark LTL 13.889 million, or LTL 0.42 per share with a face value of LTL 4, for dividends. Stumbras will distribute the profits of 2004 and retained earnings at the annual shareholders meeting due on March 18.
The company's board also proposed to assign 1.2 million for mandatory reserves and retain the remaining share of earnings. As of early 2004, the Kaunas-based company had LTL 11.5 million in retained earnings. Stumbras reported LTL 6.561 million in audited net earnings for full 2004.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Tramway for private funds
The municipality of Vilnius will by the end of this year complete a study into a possibility of financing a tramway from private funds, the municipality reported on Tuesday. Based on the study, the municipality will choose the financing model for the project, and if the government and other institutions approve it, construction will start as soon as the local government finds investors. On Tuesday, the municipality approved the conditions for a tender to choose an entity to carry out the study and hopes to have a winner by the end of May. For this matter, the European Investment Bank has allocated EUR 250,000. The municipality of Vilnius intends to construct one 10.4-kilometre-long tramway.
Verslo Zinios

Tuesday, 8th of March

Spanish prefer Alita
Alita, Lithuania's biggest alcoholic drinks producer, has said it expects to begin talks to sell its products to El Corte Ingles, Spain's largest department store chain, in late March. El Corte Ingles has chosen Alita to represent the Lithuanian beverage industry in its European Project, which is aimed at presenting products from different European countries. The Lithuanian producer has offered its vodka Premium Gera and bitter brandy Premium Gera Starka to El Corte Ingles. The first shipment of its products was delivered to the Spanish chain last week. Exports accounted for some 0.8 percent of Alita's total sales in 2004.
This year the company is to focus on exports expansion to Poland. Alita posted a preliminary net profit of LTL 12.593 million last year, a rise of 36.7 percent from the 2003 profit of LTL 9.201 million. Its annual revenues declined by 6.5 percent to LTL 100.2 million due to falling apple juice sales.
Lietuvos Zinios, Verslo Zinios

Producer prices soared
Lithuania's producer prices rose by 1.2 percent in February versus January amid a rise in prices of petroleum products. Wholesale prices of petroleum products manufactured by Mazeikiai refinery rose by 4.5 percent from January and surged by 34.6 percent versus February 2004. Excluding petroleum products, producer prices in the country edged higher by 0.2 percent in month-on-month terms and rose by 3.8 percent on a 12-month basis. Producer prices in the mining and quarrying sector grew by 2.7 percent on a month-on-month basis and showed a 28.8 percent annual increase. Manufacturing prices were up 1.4 percent and 10.8 percent, respectively. Producer prices in the utilities sector, as well as the prices of energy producers, edged up by 0.1 percent month-on-month and rose by 2.7 percent during the year.
Verslo Zinios

Income of Achema Group increased
Achema Group, the leading Lithuania's industrial group, reported an aggregate turnover of LTL 1.44 billion for full 2004, a rise of 21.5 percent from the year-earlier figure of LTL 1.185 billion. The group says that the combined assets surged by 1.7 times, to LTL 1.449 billion, while fixed assets soared by 1.68 times, to LTL 1.093 billion in 2004.
The group, established back in 2001, controls over 30 companies active in chemistry, trade, energy, construction, stevedoring, hotel, media, publishing and other businesses. In 2004 the authorized capital of Achema Group stood at LTL 603.235 million, a rise of LTL 94.459 million from the year-earlier figure of LTL 508.776 million.
Lietuvos Zinios

Monday, 7th of March

Varos Group aims at CIS
The sales of Varos Group, a Lithuanian company operating in the Baltic States, amounted to LTL 57.2 million in 2004, 4.4 percent higher than sales in 2003. Last year, the sales estimate of Varos Group, which deals with specific IT and engineering solutions, stood at LTL 54.8 million. Last year, Kemek Engineering, one of the Varos Group companies, opened an office, which currently employs five people, in Moscow. The company might also open an office in Kiev, Ukraine. In 2004, Kemek Engineering started manufacturing scales to weigh freight cars and automobiles which are registered in CIS.
Varos Group now includes six companies operating in three Baltic States - New Vision, Kemek Engineering, Checkpoint Meto Baltic, VG Counsellors, and Girba and Intac Lit, which joined the group in 2004.
Verslo Zinios, Lietuvos Rytas

Rebranding into VRP Hill & Knowlton
Viesuju Rysiu Partneriai (VRP), one of the major domestic public relations firms, officially joined the global chain of Hill & Knowlton this month. The local company is also changing its name to VRP Hill & Knowlton as part of its reorganisation scheme.
"Until now we were a leading player in the Lithuanian PR market. Now that we receive the support of the global chain, we are also establishing a firm foothold in the other Baltic markets," Mykolas Katkus, the chief executive of VRP, said.
The Lithuanian company has joined the Hill & Knowlton network as an associated member in accordance with a franchise contract. The company counts on expanding its clientele this way. VRP last year achieved sales of LTL 2.4 million.
Verslo Zinios

Acquisition of Alna
Alna Business Solutions, a subsidiary of leading Lithuania's IT group Alna, has acquired 80 percent of Estonia's business system service company PerSimplex.
Following the merger, the group says to become the leading provider of business management system installation services and consultations in the Baltic countries.
After the completion of transaction, the number of Alna employees dealing with installation of business management systems would rise to 110, from about 80.
Lietuvos Rytas

Previous weeks:
Estonia
Latvia
Lithuania

Back to Baltic Business Monitor
Archives 2003-2005

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