Saturday, 16th of July
Threat of gambling
A sudden development of the gambling market and high concentration of casinos in Vilnius City might evoke bad social consequences, says the national gambling watchdog. The State Gambling Monitoring Commission has asked the council of Vilnius to regulate the future development of casinos in the city. The local administration is authorised to deal with regulation of gambling business, according to the law on gambling.
In Vilnius we have 9 out of all 16 casinos functioning in Lithuania. This figure is definitely too big. The circle of gamblers has not practically changed, therefore, they will spread among an increasing network of casinos, and companies will earn less income. In addition to adverse economic effects on companies, there are social effects - the companies will undertake more marketing tools and there will be more people with addiction to gambling, Ceslovas Blazys, the chairman of the monitoring commission, said.
FDI grew by 8.3 percent
The sum of direct foreign investments (FDI) in Lithuania went up 8.3 percent in the first three months of 2005 to reach LTL 17.533 billion. In the beginning of 2005, the sum of the FDI amounted to LTL 16.193 billion. According to the data compiled by the Lithuanian Department of Statistics, the sum of FDI per capita in Lithuania was LTL 5,128, an increase of LTL 401 from the beginning of the year.
Swedish investors lead in Lithuania, bringing 14.2 percent of all FDI here. Danish investors account for 13.7 percent, German businesses account for 12.9 percent, and Russian businesses account for 12.6 percent of total investments in this Baltic state.
The first quarter direct investments from EU member states rose 3.3 percent to LTL 12.75 billion.
Snoras opens office in Latvia
Snoras, Lithuania's fourth biggest commercial bank by assets controlled by Russia's Konversbank, is to inaugurate its representative office in Riga on Friday. In future the office will probably be reorganized into a branch office. The bank would strive to occupy a private customer service niche and would transfer its successful retail banking model to Latvia, Raimondas Baranauskas, Snoras chairman, said.
Last month Baranauskas stated that Snoras launched talks with several Latvia's banks concerning the purchase of majority holding in any of those institutions. Moreover, the bank was mulling possible commencement of business in other EU member states, including Estonia, Belgium or Cyprus.
Friday, 15th of July
A new blow for Mazeikiu Nafta
Mazeikiu Nafta, the sole Baltic oil refining and transportation complex controlled by beleagued Russia's oil company Yukos, might have abused its dominance on the market and exerted influence on trade in gasoline between Lithuania, Latvia and Estonia thus breaching the competition legislation in effect in Lithuania and the EU, Lithuania's Competition Council has stated. If the allegations are proved, the company will face a fine of several hundreds of millions of litas.
"The investigation has revealed numerous facts and circumstances that have led to suspicions that Mazeikiu Nafta and its trade arm Mazeikiu Naftos Prekybos Namai might have abused the dominance on the market via its strategy and pricing for the customers in Lithuania, Latvia and Estonia, which might have affected the prices of fuel, and through various commercial restrictions, which might have led to discrimination of certain companies," the watchdog has announced.
The council added that the said companies might have been forced to sell fuel for Lithuania's users at higher prices, compared with prices on Latvia or Estonia's market.
Competition Council intended to make a final decision concerning Mazeikiu Nafta in September.
Respublika, Kauno Diena, Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios
Payment cards replace cash money
Lithuania's payment card market grew by 6.8 percent during the first half of 2005, with the number of different cards issued by local commercial banks reaching 2.891 million as of July 1. Total turnover on cards made up LTL 8.795 billion, a surge of 28.6 percent versus the year-earlier figure.
"The growth in the number of cards in Lithuania does not seem to lose stream and is approaching the 3 million threshold. The percentage growth is particularly impressive on the credit card market. For example, the number of credit cards issued by Hansabankas surged by 68 percent in the past year. It means that the majority of residents already have one or two debit cards and are increasingly more interested in higher-class products, i.e., in credit cards," Vitalijus Rancevas, director of the Payment Card Department at Hansabankas, said.
By far, the banks issued 108,500 credit cards, or 3.75 percent of total payment card number.
Verslo Zinios, Respublika, Lietuvos Rytas
Lower profit of Sanitas
Sanitas, Lithuania's biggest pharmaceutical producer, posted LTL 2.476 million in net profit for the first six months of 2005, a decline of 13 percent versus the year-earlier figure of LTL 2.836 million. The six-month sales of the company amounted to LTL 16.3 million. Last year, Sanitas posted the sales of LTL 20.52 million for the first half of the year, a rise of 32.7 percent since the same period in 2003.
Thursday, 14th of July
Kaunas becomes hub of low-fare flights
Wizz Air, the largest budget carrier in Central and Eastern Europe, has announced its intentions to kick off flights from Kaunas to Warsaw from December 1. No-friller will also offer flights to Paris, Liverpool, Dortmund, Malme-Copenhagen, London and Stockholm via Warsaw. Wizz Air is the second budget carrier to launch cheap flights from Kaunas as Irish Ryanair will kick off flights from the second largest Lithuania's city to London on September 22.
The carrier will offer six weekly flights from Kaunas to Warsaw. One-way tickets, excluding taxes and fees, will cost from EUR 9.99 and EUR 19.99. Wizz Air operates a fleet of new Airbus A320s. This summer the company operates 32 routes between 17 European air hubs.
Lietuvos Rytas, Kauno Diena
Stumbras earned LTL 6.5 million
Stumbras, the largest Lithuania's distillery controlled by private concern MG Baltic, posted LTL 6.548 million in unaudited net earnings for the first six months of 2005, a surge of 21.9 times from the year-earlier figure of LTL 0.299 million. Sales rose by 17.1 percent, to LTL 46.252 million, from LTL 39.483 million in the January-to-June period of 2004. Sales of spirits alone increased by 16.45 percent, to reach LTL 37.143 million in the reporting period. Stumbras attributed the rise to stronger sales on domestic market and an increase in exports.
This year the Kaunas-based distillery will aim to raise its pretax earnings twofold, to LTL 15 million.
Respublika, Lietuvos Zinios
Ingo Baltic was suspended its license
Russia's equity non-life insurer INGO Baltic will disappear from Lithuania's insurance market as the Insurance Supervisory Commission (ISC) ruled to repeal the license issued to the company. Several months ago the commission, which had been monitoring the activities of INGO Baltic for some time, authorized to attach a share of company's assets as its solvency indexes turned negative. Negative solvency indexes meant effectively that the company defaulted on its contractual obligations to customers. The insurer's shareholders pledged to raise the authorized capital to LTL 18 million, from LTL 7.2 million; however, the promise had not been kept.
INGO Baltic, known as Baltic Garant until spring, is majority-owned by Russia's insurer Ingosstrach, which controls 55.6 percent of Lithuania's insurance company.
Respublika, Verslo Zinios
Wednesday, 13th of July
Leasing gains popularity
A total of 34.9 percent of Lithuania's population, a rise of 11.2 percentage points year-on-year, have opted for leasing services offered by domestic leasing operators, an opinion poll conducted by RAIT has shown. Some 3.3 percent of respondents used the services of leasing operators for the purchase of furniture, 2.8 percent acquired vehicles and 2.4 percent - housing.
Snoro Lizingas led other operators in terms of leasing services provided to the buyers of household appliances, with 57.7 percent of buyers making use of company's services. Hansa Lizingas held some 20.6 percent of the market, Ukio Banko Lizingas and SEB Vilniaus Banko Lizingas - 13.9 percent and 7.2 percent, respectively.
As regards mortgage for housing, 28.1 percent of respondents used the services of SEB Vilniaus Banko Lizingas, which was followed by Nord/LB Lizingas with 20.8 percent of the market and Hansa Lizingas with 16.4 percent share.
Lietuvos Zinios, Lietuvos Rytas
VP Market turnover increased by 23 percent
VP Market, the operator of the largest Baltic retail chain, posted sales of EUR 707.2 million in Lithuania, Latvia, Estonia, Romania and Bulgaria for the first six months of 2005, a surge of 23 percent from the year-earlier figure of EUR 572.1 million. VP Market sales in Lithuania rose by 15 percent in the reporting period, while sales in Latvia and Estonia increased by 31 percent and 13 percent, respectively. First-half results proved that the company's intentions to achieve the turnover of LTL 4.8 billion in full 2005 were practicable and would be implemented. The company attributed the rise in turnover to the expansion on foreign markets, discount program Maximum, summer sales and other campaigns.
The company currently operates 195 stores in Lithuania, 90 in Latvia, 21 in Estonia, 8 in Romania and 1 in Bulgaria.
Respublika, Lietuvos Rytas, Verslo Zinios
Prime Minister liked proposal of LTL 2 billion
Austria's company Baltic Holding, which is mulling possible buying into Mazeikiu Nafta, the sole Baltic oil refining and transportation complex, in a team with Gazprom-owned Gazprombank, one of top five Russia's banks, which controls 55 percent of Austrian company. Moreover, the company may invest about LTL 2 billion into the development of petrochemical industry in Lithuania.
"This is a particularly solid group of companies, which has offered to invest some LTL 2 billion and expand the technological process of Mazeikiu Nafta to include the production of petroleum products, which are in utmost need, which have a well-established market and which would strengthen up our potential and create additional several hundreds of jobs. The offer is very attractive," Lithuania's Prime Minister Algirdas Brazauskas said.
Brazauskas reiterated that the new investor into Mazeikiu Nafta would be chosen by beleagued Russia's oil company Yukos, which would then consider the prospective buyer with Lithuania's Government.
Verslo Zinios, Respublika, Lietuvos Rytas
Tuesday, 12th of July
72 percent of payment card holders are active users
Payment cards are actively used to pay for everyday purchases by nearly 72 percent of their holders in Lithuania, a survey shows. Nearly every third resident of Lithuania pays for fuel with a card, and every sixth uses the credit card to pay his restaurant bill. Every fourth Lithuanian uses a card to pay everywhere cards are accepted, reported Visa Europe. The survey also revealed that 18 percent of respondents had not used their cards one time in the past six months. Every second resident in Lithuania (about 54 percent) uses the card to pay his bills when he is short of cash, and every fourth (26 percent) uses it whenever the opportunity arises. The major reason for the increasing use of cards is the transfer of the salaries into them; 39 percent of the respondents pay their bills with a card namely because of this reason. Every fifth person said it was convenient to pay with the card, and 7 percent believe paying with a card helps save money.
Respublika, Verslo Zinios
The number of passengers grows
Compared to other airports in Lithuania, the number of passengers passing through the Kaunas International Airport grew the most in the first half of 2005. The number of travellers passing through Vilnius International Airport went up the least. In January-June, Kaunas Airport had 17,480 passengers, a 55.3 percent increase year-on-year.
"The decision to transfer charter flights from Vilnius to Kaunas in May has led to the growth in the number of passengers," Kestutis Cucenas, the head of Kauno Aerouostas, said.
Palanga International Airport had 39,624 travellers in the first half of 2005, 43 percent more than it had in the same period of 2004. According to Regina Zajanciauskaite, the chief accountant of the Palanga Airport, the growth in the number of passengers was brought about by the flights of the company SAS to Copenhagen launched in the autumn of 2004.
In the first half of 2005, the number of passengers that passed through Vilnius International Airport amounted to 582,570, a 39 percent increase year-on-year.
The slowest growth is of Rimi Lietuva
The sales of Rimi Baltic, the joint venture of Finland's Kesko and Sweden's ICA, in Lithuania expanded by 5.5 percent, year-on-year, to reach EUR 64.5 million in the first six months of 2005. Total sales of Rimi Baltic in three Baltic countries made up EUR 384 million in the first half of 2005, a surge of 23.9 percent from the year-earlier figure.
The growth in Rimi Baltic sales was the fastest in Latvia as the turnover in the neighbouring Baltic country soared by 34.3 percent, year-on-year, to EUR 163.5 million in the reporting period. Sales in Estonia rose by 29.2 percent, to reach EUR 156 million.
Verslo Zinios, Lietuvos Rytas
Monday, 11th of July
Ekranas faces losses
Ekranas, one of Europe's leading colour picture tube (CPT) producers with a one-fourth market share, posted preliminary losses of some LTL 35 million for the first six months of 2005. The producer reported LTL 7.5 million in net earnings for the first half of 2004.
The CPT producer, which posted an audited net profit of LTL 1.29 million for 2004, is projecting the loss of LTL 10 million for 2005 amid unfavourable developments on the global market.
Profit of the bank came in at LTL 62.5 million
SEB Vilniaus Bankas, the largest Lithuania's commercial bank controlled by Scandinavia's SEB group, posted the net earnings of LTL 62.5 million for the first six months of 2005, while the whole group reported LTL 78.1 million in unaudited net profit.
In the first half of 2004, unaudited net earnings of SEB Vilniaus Bankas stood at LTL 60.9 million.
Verslo Zinios, Respublika
Arpberg Forvaltning acquired Sema
The majority holding in Sema, the Panevezys-based alcohol producer, has been acquired by Sweden's Arpberg Forvaltning for LTL 6,080. The stake in Sema was sold by Bennet Distributors, the leading Lithuania's spirits importer, on July 1. The face value of Sema's stake, which was acquired by the Swedish company, totals LTL 11.725 million. The value of the company, if estimated at the price paid for 50.3 percent stake, would make up meagre LTL 11,670. Other major investor of Panevezys-based distillery is investment company Hermis Capital, which controls 30.76 percent of distillery.
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