Observer "Lietuva"

WEEK 13.2005

Saturday, 2nd of April

Tyre producer eyes on Lithuania, too
German tyre and automotive components concern Continental is expecting to expand further into lower-wage regions, with a new tyre factory being considered possibly in Lithuania. The company is planning to invest LTL 2.969 billion into new technologies and expansion of production sites in low-wage countries this year, said company's chief executive Manfred Wennemer. A new tyre factory was under consideration for a site in Europe within the next 24 months, Wennemer said, while specifically mentioning Lithuania as a possibility.
Lietuvos Zinios

Lithuanian exports is support for Klaipedos Nafta
Klaipedos Nafta (Klaipeda Oil), the state-run oil product terminal operator, handled 1.791 million tons of oil products in the first three months of 2005, a decline of 20.8 percent from the year-earlier figure of 2.26 million tons. In March alone, the terminal handled 710,600 tons of oil products, a surge of 72 percent from February handling of 412,800 tons and an increase of 6.1 percent from the handling of 670,000 tons achieved in March 2004. In March handling volume was the largest this year. In February the handling was lower than projected as Mazeikiai refinery stood idle for several days amid a shortage of crude. Products of refinery comprise more than a half of oil products handled by the terminal. For 2004, the terminal reported LTL 28.9 million in pre-tax earnings, a rise of 28.3 percent from the 2003 figure of LTL 22.529 million.
Lietuvos Zinios

Novaturas has become leader on Estonian market
Novaturas, the largest travel operator in Lithuania, announced that its Estonian subsidiary Novatours has gained the lead in the market. Novatours, according to the company, pushed Domina Travel, an international travel agency, to second place. The Estonian subsidiary of Novaturas reported that it sold 4,500 travel packages in the first quarter of this year. In the first three months of the year, sales have reached LTL 5 million. Compared to other travel agencies in Estonia, Novatours offered 4 travel packages to Estonians in the winter season.
The Lithuanian travel chain Novaturas now controls around 30-35 percent of the outbound tourism market in Estonia. Launched in 2004, Novatours sold 7,500 travel packages and achieved sales of LTL 11 million in that year. The company also succeeded in capturing 18 percent of the Estonian market. Novatours this year estimates that sales will increase twofold. In the three Baltic States, Novaturas sold 62,000 travel packages in the previous year.
Respublika

Friday, 1st of April

Evli Bank is given green light to purchase PST shares
Lithuania's Competition Council has allowed Finnish Evli Bank, the owner of Lithuania's broker house Suprema, to raise its stake in Panevezio Statybos Trestas (PST), the leading domestic construction company, to 40 percent, from 33.34 percent. Concentration measures undertaken by Evli Bank would not give rise or strengthen up the dominance on the market, and would not result in any significant restrictions of competition on the construction market, the competition regulator said on Thursday.
Evli Bank noted in its statement to the Council that it intended to acquire the shares in PST for investment purposes.
Verslo Zinios

Bankruptcy case for Vitoma
Vitoma, a Lithuanian company that dominated the domestic scrap metal procurement market five years ago, has gone bankrupt. In the autumn of 2004, Vitoma was announced the winner of the biggest privatisation competition in Vilnius. Baltic Metals decided to initiate the bankruptcy case against Vitoma. Baltic Metals purchased 88.9-percent stake of Vilniaus Specialusis Autotransportas (VSA), a garbage collecting firm, for LTL 43.1 million from Vitoma. There are plans to construct dwellings on land that belonged to VSA. It is believed, however, that the core business of Vitoma has been concentrated in Antrimeta, a firm acquired by Vitoma in 2000. In February 2005, the value of Vitoma's assets was LTL 1.543 million, and financial liabilities amounted to LTL 2.12 million.
Verslo Zinios

Economic confidence surged
The confidence of the major agents of the economy - producers, consumers, and investors - grew 6 points in March. According to data released by the statistical office on Thursday, economic sentiment went up to 10 points in March. An increase of 8 percentage points in the industrial confidence indicator and a jump of 13 percentage points in confidence in the service sector had the most effect on the growth of economic confidence.
Verslo Zinios

Thursday, 31st of March

Foreign tourists spent more money in Lithuania
Lithuania received LTL 2.273 billion in revenues from incoming tourism in 2004, some 17 percent more than in 2003. Foreign tourists spent 1.994 billion in the country in 2003. The State Tourism Department predicted that revenue from incoming tourism would reach around LTL 2 billion in 2004. The total number of guests in the country's accommodation establishments rose by 32 percent to 1.12 million in 2004. 590,000 of them or 53 percent were foreign visitors. Hotels and other accommodation establishments in Vilnius posted a 42.7 percent rise, to 378,200, in total guest numbers last year. The number of foreign guests surged by 45.6 percent to 221,200.
Lietuvos Zinios

Minimum monthly salary will increase to LTL 550 as of July
Lithuanian government decided on Wednesday to raise the minimum monthly salary by LTL 50 to LTL 550 as of July 1 2005. The minimum hourly wage is to go up by 11 percent, from LTL 2.95 to LTL 3.28. The government also decided to leave the minimum monthly and hourly pay rates for state politicians, judges, public officers, the military and civil servants unchanged at LTL 430 and LTL 2.57 respectively. The minimum monthly salary was last raised from LTL 450 to LTL 500 last May. Respublika, Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas

Turnover of retail trade surges
Lithuanian retail sales grew by 6.8 percent year-on-year in the first two months of this year. Excluding motor sales, the annual growth was 7.5 percent. The aggregate turnover of retail enterprises reached LTL 2.904 billion (VAT excluded) during the two months. In February, total retail sales fell by 1.6 percent from January but rose by 7.2 percent from the same period a year ago. Excluding motor vehicles and motorcycles, sales dropped by 4.1 percent month-on-month but were up 7.5 percent year-on-year. The aggregate turnover of restaurants, bars and other catering establishments increased by 22.6 percent year-on-year to LTL 102.2 million in January-February. Lithuanian retail sales grew by 9.3 percent in 2004 compared with 2003 to reach LTL 19.613 billion.
Lietuvos Zinios

Wednesday, 30th of March

Profit of Snaige shrank
Snaige, the sole Baltic household refrigerator producer, reported consolidated audited pretax earnings of LTL 18.4 million and earnings before interest, tax, depreciation and amortization (EBITDA) of LTL 35.3 million for full 2004. Earlier Snaige's management predicted consolidated pretax earnings of LTL 28.8 million for 2004. In 2005 the group would pursue to raise the consolidated pretax figure to LTL 26.4 million. Consolidated revenues stood at LTL 297 million last year. In 2005 consolidated revenues should rise to LTL 441 million. Previously Snaige posted unaudited pretax earnings of LTL 31.82 million on sales of LTL 313.66 million for full 2004.
Lietuvos Zinios, Verslo Zinios

Coface is allowed to purchase LEID
Lithuania's Insurance Supervisory Commission on Tuesday approved the deal on sale of 99.92 percent equity stake in credit insurance company Lietuvos Eksporto ir Importo Draudimas (Lithuanian Export-Import Insurance or LEID) to Austria's Osterreichische Kreditversicherung Coface. Privatization Commission gave go-ahead for the sale of LEID early in March. The transaction is expected to be finalized in late March. The sale of 99.92 percent in the credit insurance company should generate at least LTL 11.9 million.
Verslo Zinios, Respublika

LTL 93 million for railways
Lietuvos Gelezinkeliai (Lithuanian Railways) and a business consortium of Siemens – German Siemens AG, Finnish Siemens OY and UAB Siemens Lietuva – have signed a contract regarding a LTL 92.5-million project. Lietuvos Gelezinkeliai received assistance for the upgrading of signalling equipment and telecommunications and power supply systems in Siauliai-Klaipeda strip from the Cohesion Fund of the European Union. Other facilities to be installed include automatic rail blocking systems, microchip signalling systems etc. Overall, the Lithuanian railways will absorb investments worth more than LTL 500 million in 2005.
Verslo Zinios, Lietuvos Rytas

Tuesday, 29th of March

Official unemployment level was the lowest over the last four years
In 2004, the unemployment level in Lithuania stood at 11.4 percent. Based on a survey conducted by Statistics Lithuania, the level of joblessness in Lithuania amounted to 12.4 percent in 2003. The number of unemployed people has been decreasing due to a surge in migration and growing production and service sectors. Nevertheless, Lithuania has a higher unemployment rate than its neighbours Latvia and Estonia, which have rates of 10.2 percent and a lesser volume of migration. The number of jobless Lithuanian residents stayed flat, at 172,000, in the third and fourth quarter of 2004. There were 1.44 million working people in the country in the fourth quarter of the previous year. The employment rate of people between 55 and 64 years of the age grew. Most of the population is employed in three sectors: manufacturing, trade, and agriculture.
Kauno Diena, Verslo Zinios

Plaint of Trident Marine
Denmark's Trident Marine, which was shut out of the privatization of Lietuvos Juru Laivininkyste (Lithuanian Shipping Company or LJL) as financially unreliable, is triggering a new stage of litigation in Lithuania, lodging a claim against the Lithuanian government and demanding the payment of millions of litas in damages.
In January, Trident Marine lodged a claim for the reimbursement of damages sustained due to suspension of LJL privatization. The Danish company demanded LTL 12-15 million from the government. In mid-March, Trident Marine spoke of its aspirations to negotiate the reimbursement of losses put at LTL 132.75 million with Lithuania's government.
Verslo Zinios

Mazeikiu Nafta will not pay dividends
Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refining and transportation complex managed by embattled Russia's oil giant YUKOS, will forgo dividends for last year despite the record profit announced for full 2004. On Friday the company's board agreed the proposals to shareholders, including the transfer of 5 percent of net earnings to the mandatory reserve and retention of the remaining share of profits. Shareholders will vote on proposals on April 29. Mazeikiu Nafta announced LTL 721.883 million in consolidated audited net earnings under US GAAP for 2004, a surge of 3.3 times from the year-earlier figure of LTL 220.9 million.
Verslo Zinios

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