Observer "Lietuva"

WEEK 18.2005

Saturday, 7th of May

April did not bring delight to beer producers
Lithuania's beer market grew by 1.9 percent to 68.72 million litres in the first four months of 2005, from 67.47 million litres in the same period last year, the data published by the Lithuanian Brewers' Association has shown. In April alone, the sales of country's seven major breweries, which are members of the association, declined by 7.6 percent, to 20.52 million litres, from 22.22 million litres in April 2004. Svyturys-Utenos Alus posted a 1.2 percent growth in four-month beer sales to 32.1 million litres.
Kalnapilis-Tauras Group was the second with four-month beer sales of 15.97 million litres. Ragutis lifted beer sales to 7.43 million litres, while sales by Gubernija edged to 6.84 million litres.
Svyturys-Utenos Alus held a 47.31 percent share of the domestic beer market in terms of four-month sales, and was followed by Kalnapilis-Tauras Group with 22.8 percent, Ragutis with 10.8 percent, and Gubernija with 10.1 percent.
Lietuvos Rytas

Producer prices went up
Lithuania's producer prices rose by 2.6 percent in April versus March. On a 12-month basis producer prices surged by 11.8 percent last month. Prices of petroleum products soared by 9.8 percent from March and rocketed up by 44.3 percent versus April 2004.
Excluding petroleum products, producer prices in the country edged higher by 0.1 percent in month-on-month terms and rose by 2.9 percent on a 12-month basis. Producer prices in the mining and quarrying sector declined by 1.7 percent on a month-on-month basis and showed a 27.9 percent annual increase. Manufacturing prices were up 3.2 percent and 13.5 percent, respectively.
Lietuvos Zinios, Lietuvos Rytas

Water suppliers incurred LTL 11.5 million losses
Lithuania's 47 major water suppliers suffered losses of LTL 11.5 million in 2004. Last year, the income of the water suppliers amounted to LTL 327.9 million, and expenses equalled LTL 339.4 million, the National Commission for the Control of Prices and Energy stated in its annual operational report. Compared to 2003, however, the operational losses of the water suppliers decreased 33.7 percent or LTL 5.8 million. In Lithuania, the supply of drinking water and treatment of waste water is accomplished by 47 large and 500 small firms. The 47 large companies, the profitability of which is reported by the commission, supplies water to 92 percent of the population. Lithuanian water supply firms control 7,600 kilometres of water pipes. The combined value of their assets is LTL 3.5 billion.
Respublika, Lietuvos Rytas

Friday, 6th of May

Lithuanian and Icelandic companies will struggle over LAL
Four Lithuanian and foreign companies or a consortia will vie to buy the state-run flagship carrier Lietuvos Avialinijos (Lithuanian Airlines or LAL). Three bidders are Lithuania-equity companies or consortia, while the fourth bidder is Icelandic air carrier Iceland Express. State Property Fund has announced the receipt of 4 applications, although earlier it sold eight LAL privatization dossiers. Financial bids should be opened on May 16.
Novaturas, the top Baltic tour operator, has already announced it would bid for LAL together with bus company Kautra and Hermis Capital, an investment company and the owner of Kautra. Moreover, Fima, dealing in telecommunications and IT solutions, has team up with private air carrier Aurela and tour operator Tez Tour for the tender. Armis Valiulis, CEO of Kaunas-based cargo company Arijus and the owner of Aviakompanija Lietuva carrier, confirmed that Arijus was among the bidders for LAL as well. Meanwhile, Scandinavian air system SAS has confirmed officially that it should shun from the tender.
The deal to sell LAL is expected to be finalised in summer.
Lietuvos Rytas, Respublika, Verslo Zinios

Drinks of Stumbras - for Israel, too
Israeli retail chain Karl Berg, which holds about one-fifth of local market, has launched marketing of alcoholic beverages produced by Stumbras, the largest Lithuania's distillery controlled by private concern MG Baltic. Stumbras products are distributed by the company's Israeli partner S&G Intertrade, while the spirits tasting campaigns have been launched at the outlets of Tiv Taam chain, which holds approximately 35 percent of Israeli market, the Lithuanian company has reported. Stumbras has already exported 35,300 litres of its spirits to Israel, and intends to raise the shipments. Alongside Israel, the list of export destinations of the Kaunas-based distillery shows Poland, Latvia, US and other Western countries.
Stumbras raised exports of spirits more than eightfold, to LTL 746,000, in the first three months of 2005, year-on-year.
Lietuvos Rytas, Verslo Zinios

Presidents of PZU Lietuva resigns
Businessman Edmontas Volochovicius has left the seat of president at the insurance company PZU Lietuva. Beginning Thursday, the insurance company has the Polish president and chairman of the board, Zenon Olbrys. By this time, he was in charge of the regional group PZU Baltija and of merging PZU firms in Lithuania. Volochovicius now acts as vice-chairman of the supervisory councils for the PZU companies based in Lithuania.
Verslo Zinios, Respublika

Thursday, 5th of May

Jobless rate declines
Jobless rate in Lithuania declined by 0.5 percentage point, to 5.4 percent in April from March, the Lithuanian Labour Exchange announced on Wednesday. As of May 1, the number of jobless persons registered at territorial labour exchange units plunged by 42,300, or 27.3 percent, year-on-year, to reach 112,500. In one month the number of registered unemployed declined by 11,900 or 9.5 percent. Among major cities, unemployment rate ranged from 2.9 percent in Siauliai to 5.3 percent in Panevezys.
According to projections of Lithuania's Labour Exchange, jobless rate, which averaged 6.9 percent in 2004, will decline to 5.5-6 percent this year.
Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas

Dutch investors purchase garbage collection company
Vilniaus Specialusis Autotransportas (VSA), a garbage collection company privatised last year, is being sold to foreign investors. VSA possesses land that can be developed.
"VSA, excluding its real estate, will be sold to a Dutch company that deals with garbage collection operations. Our present owners are only interested in real estate development," Dainius Kriauciunas, the chief executive of VSA, said.
At the beginning of 2004, the local company Baltic Metal acquired 88.9 percent of VSA for LTL 43.1 million. The new owner eventually boosted its holding to 99.8 percent. The garbage collection enterprise earlier belonged to the municipality of Vilnius. Baltic Metal is a company set up by the owners of the group Vitoma.
The operations of the garbage collection company will be moved to an industrial area in Vilnius. The head of the firm has reported that VSA bought a 3-hectare lot in the district of Paneriai in Vilnius. VSA intends to reveal the name of the new foreign buyer at the end of this month.

Lower profits of Snaige
Snaige, the only refrigerator manufacturer in the Baltics, reported LTL 3.502 million in consolidated net profit for the first three months of 2005, a decline of 50.3 percent from the year-earlier figure of LTL 7.046 million. Pretax earnings came in at LTL 4.786 million, a plunge of 40 percent from the figure of LTL 8.033 million reported for the January-to-March period of 2004.
Snaige reported a consolidated net profit of LTL 15.1 million in 2004, down by 34.5 percent from 2003. Annual revenues grew by 10.2 percent to LTL 297 million.
Lietuvos Zinios

Wednesday, 4th of May

Profits of Stumbras
Stumbras, the largest Lithuania's distillery controlled by private concern MG Baltic, posted LTL 2.87 million in unaudited net earnings for the first three months of 2005, reversing the year-earlier losses of LTL 1.16 million. "The distillery started the year with renovated facilities," Ceslovas Matulevicius, Stumbras CEO, said.
The distillery's sales rose by 13.3 percent, year-on-year, to LTL 20.446 million in the January-to-March period.
Lietuvos Zinios, Respublika

SAS will not bid for LAL
Scandinavian airline SAS has decided not to participate in the tender for the privatisation of the Lithuanian national air carrier Lietuvos Avialinijos (Lithuanian Airlines or LAL), Hans Olongren, the head of corporate and public relations for the SAS Group, said. "We have carefully analysed the opportunity and arrived at the conclusion that the offer is not that interesting to us. Instead of the LAL acquisition, we plan to focus on the development of our current operations in the Lithuanian market," Olongren said. In the words of the SAS representative, the Lithuanian and Baltic markets are very important to the group, which is why it has decided to expand its operations here.
Lietuvos Rytas, Verslo Zinios

Klaipedos Nafta exceeded the target
Klaipedos Nafta (Klaipeda Oil), the state-run oil product terminal operator, posted LTL 6.3 million for the first three months of 2005, a plunge of 2.3 times from the year-earlier figure of LTL 14.5 million. Company's revenues declined by 26.7 percent, to LTL 28.5 million, from LTL 38.9 million in the January-to-March period of 2004.
"First quarter earnings exceeded our target by 32 percent as we projected the figure of LTL 4.8 million. Revenues declined on the back of lower handling, however, all in all our performance figures are solid indeed," Jurgis Ausra, Klaipedos Nafta CEO, said.
Lietuvos Zinios, Verslo Zinios

Tuesday, 3rd of May

Turnover of Apranga
Apranga, Lithuania's largest clothing retailer controlled by private MG Baltic concern, reported LTL 56.538 million in sales for the first four months of 2005, a surge of 61 percent from the year-earlier figure. In April alone, sales soared by 81.5 percent, year-on-year, to LTL 15.609 million. Apranga group sales in Lithuania rose by 25 percent, while sales on foreign markets, i.e., in Latvia and Estonia, soared fourfold in the reporting period. According to the managers of the group, the sales growth in April was the largest this year, due to the expansion of the network, coupled with buoyant sales of the spring collection and weather conditions, which were much more favourable, compared to the first three months of 2005.
Lietuvos Zinios, Verslo Zinios

PST posted profit of LTL 1.43 million
Income of Panevezio Statybos Trestas (PST), one of the leading construction companies in Lithuania, amounted to LTL 1.43 million in the first quarter of 2005. The consolidated sales of the firm reached LTL 35.8 million. In 2005, PST hopes to boost the consolidated sales by 23.7 percent to LTL 195 million, and earn profits of about LTL 7.8 million. The increasing number of orders and better management helped the growth, PST announced.
Verslo Zinios

LTL 73 million EU assistance to SBA
SBA, a concern that now also controls 50 percent of Vakaru Medienos Grupe, plans to launch two projects that have been allocated LTL 72.5 million of support from EU Structural Funds. The Ministry of the Economy says there are no legal grounds yet for the redistribution of EU assistance. SBA Furniture Group will receive LTL 26.83 million from the EU to build a new furniture factory in Visaginas. The total value of the project stands at LTL 70 million. At the same time, Giriu Bizonas, part of the concern VMG, has received LTL 45.7 million of EU assistance for the construction of a new fibreboard plant. According to unofficial sources, SBA paid Rimandas Stonys, the CEO of Dujotekana, about LTL 50 million for 50 percent of VMG.
Lietuvos Rytas, Respublika

Monday, 2nd of May

Consortium aims at LAL
Novaturas, the biggest tour operator in the Baltics, announced on Friday that it had formed a consortium with Kautra, Lithuania's largest passenger bus operator, and Hermis Capital, an investment company, to participate in the privatization of Lietuvos Avialinijos (Lithuanian Airlines or LAL). Novaturas will bid for the state's 100 percent stake in the Lithuanian national carrier in consortium with Kautra and Hermis Capital.
Kestutis Liutkus, Novaturas marketing director, said that the consortium would aim at making LAL the largest air carrier in the Baltic region within the next few years.
LAL posted a loss of LTL 9.04 million in 2004, compared with a profit of LTL 297,400 in 2003. Its annual revenue grew by 11.6 percent to LTL 222.01 million last year.
Lietuvos Zinios, Lietuvos Rytas

Central government deficit
Lithuania's central government deficit reached LTL 223.6 million in the first three months of 2005, accounting for 0.3 percent of the projected gross domestic product (GDP). Three-month revenues of the central government totalled LTL 4.384 billion, while the expenditures ran at LTL 4.412 billion, and transactions with non-financial assets made up LTL 195.9 million.
Lietuvos Zinios

Will moonshine be legal?
The production of moonshine will be legalized sooner or later, says the head of Lithuania's parliamentary Committee on Rural Affairs, member of the Labour Party faction Jonas Jagminas. Jagminas said on Friday that upon the adoption of a law on the preservation of national heritage products and the promotion of their production, scheduled to be drafted by a task force led by him by late June, "a step will be made towards legalizing moonshine." In the words of the chairman of the Committee on Rural Affairs, one should not fear the legalization of the production of moonshine, it is important that it is of good quality.
Lietuvos Zinios

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