Observer "Lietuva"

WEEK 29.2005

Saturday, 23rd of July

As Finnish company AffectoGenimap acquired Informacines Technologijos, a domestic IT group, the senior executives of the Lithuanian firm have officially become millionaires. On June 30, CEO Darius Uzpalis owned 1.12 percent of the stock in AffectoGenimap. This portfolio is now valued at LTL 2.78 million. Other senior executive, Darius Lazauskas, had 1.1 percent of the Finnish group. The market value of this stake is LTL 2.74 million.

Waiting for new owners
Lithuania's five-star hotel Le Meridien Villon, which is located close to Vilnius and is part to leading global hotel chain Le Meridien Hotels and Resorts, is expected to change the owner shortly. The European Commission has cleared under the European Union Merger Regulation the acquisition of 23 Le Meridien hotels, by the US firms Lehman Brothers, Starwood Capital Group and Starwood Hotels & Resorts Worldwide.
The 23 hotels that are the subject of this clearance are owned or leased by Le Meridien, and are located mainly in the EU.

Lithuania's authorities set prices for LJL and Lietuvos Telekomas shares in property restitution scheme
The value of Lietuvos Telekomas shares to be distributed to property restitution claimants in the fifth phase of the government's scheme has been set at LTL 2.22 a share, while the value of shares of Lietuvos Juru Laivininkyste (LJL), the shipping operator, has been pegged at LTL 0.65 a share. Current value of Lietuvos Telekomas and LJL on the stock exchange stands at LTL 2.16 and LTL 0.66, respectively.
A total of 990 claimants entered into the fifth stage of property restitution scheme will receive restitution for property valued at almost LTL 15 million. Some LTL 13.3 million worth of property would be restituted with shares of Lietuvos Telekomas, and LTL 1.5 million - with LJL shares.
Respublika, Lietuvos Zinios

Friday, 22nd of July

Compulsory motor third-party liability insurance market shrank by 7.7
Lithuania's compulsory motor third-party liability insurance market declined by 7.7 percent year-on-year to LTL 165.3 million in the first six months of this year. Insurers concluded 1.07 million regular contracts collecting a total of LTL 155.686 million in insurance premiums in the January-to-June period. Compared with the first half of 2004, the number of contracts declined by 1.9 percent, while the amount of premiums written shrank by 0.5 percent. Insurance companies paid out a total of LTL 54.5 million in compulsory motor insurance claims during the six-month period, a surge of 50.6 percent versus the year-earlier figure.
Kauno Diena, Lietuvos Zinios

Almost 0.7 million Lithuanians join second-pillar private pension scheme
A total of 682,000 people joined Lithuania's second-pillar private pension scheme by July 1. In the first six months of 2005 private pension contracts were signed by 124,900 people, a rise of 8,700 residents from the year-earlier figure of 116,200 people. The major part of contracts - 441,000 - was signed during the first stage of new scheme in 2003. According to the data provided by the Securities Commission and the Insurance Supervisory Commission, 27 pension funds held combined assets worth LTL 249.8 million as of late June.
Under the scheme, known as the "second pillar," people can divert a portion of their social insurance contributions to a private pension plan. This year this share makes up 3.5 percent of insurable income, whereas in 2006 this portion would grow to 4.5 percent and in 2007 - to 5.5 percent of insurable income.
Kauno Diena, Lietuvos Zinios

Popularity of factoring increases
Lithuania posted a larger volume of factoring services this year compared with the preceding year. The turnover of factoring in the first half of 2005 surged 76.2 percent year-on-year to LTL 2.599 billion. At the end of June, the portfolio of factoring constituted LTL 786 million, or 44 percent bigger than it was in June of 2004. The portfolio of local factoring transactions made up LTL 595 million, compared with LTL 191 million worth of international factoring. In the first six months, companies signed 580 factoring contracts valued at a combined LTL 360 million.
Hansa Lizingas was the leading provider of factoring services in the country with 51 percent of the market.
Verslo Zinios, Respublika

Thursday, 21st of July

Commercial banks boosted their profit by one-third
All commercial banks and foreign bank branches operating in Lithuania ended the first half of 2005 in the black, posting the aggregate profit of LTL 175.9 million, a rise of 31 percent from the year-earlier figure of LTL 134.2 million. Domestic commercial banks posted combined profits of LTL 173.9 million, up from LTL 132.4 million a year earlier. Total profits of two foreign bank branches rose to LTL 2 million from LTL 1.8 million.
Total assets of commercial banks reached LTL 33.617 billion at the end of June, rising by 15.3 percent from the start of the year. Loans totalled LTL 19.765 billion, up by 17 percent from January. Aggregate housing loan portfolio surged by 32.8 percent, to reach LTL 4.568 billion. Total deposits amounted to LTL 20.704 billion (up by 15.9 percent), of which private individuals' deposits made up LTL 11.378 billion (up by 16 percent).
Lietuvos Zinios, Respublika, Lietuvos Rytas

Housing loan market grew by 78.2 percent over a year
The domestic banks and branches of overseas banks issued housing loans worth LTL 4.568 billion by the end of first half of 2005. Compared with the corresponding period of 2004, the portfolio of such loans grew 78.2 percent. The growth of housing loans since the start of 2005 constituted 32.8 percent. On July 1, housing loans accounted for 6.9 percent of the expected gross domestic product of Lithuania in 2005. The central bank therefore says that there is still much room for further growth. In Latvia and Estonia, the bank said, the ratio of housing loans to the GDP is significantly larger. Overall, the portfolio of loans granted to residents widened 82.5 percent to LTL 6.085 billion in the year to June 2005.
Respublika, Lietuvos Zinios

Vilniaus Vingis suspends production
Vilniaus Vingis, Lithuania's deflection yoke producer struggling to withstand a downturn on its key markets, is putting production off stream for summer break.
"The major part of our staff will go on paid leave this and next week, the mass production of deflection yokes will be suspended as well, we will only continue the manufacturing of trial products and operate several bars. However, the deliveries of products as ordered by our customers will proceed as scheduled," Vladislovas Cybas, Vilniaus Vingis marketing director, said.
Verslo Zinios, Lietuvos Zinios, Respublika

Wednesday, 20th of July

National budget rakes LTL 7.872 billion
Lithuania's national budget revenues totalled LTL 7.872 billion in the first six months of this year or, excluding the EU support funds, LTL 6.732 billion. The central government's total budget revenues for the first six months of 2005 reached LTL 6.808 billion or, excluding EU funds, LTL 5.668 billion. Municipal budget revenues came in at LTL 1.064 billion in the reporting period. Six-month revenues of the national budget covered 50.3 percent of annual target, while the respective figures for the central government and municipal budgets made up 49.1 percent and 59 percent, respectively.
Revenues on value-added tax made up LTL 2.323 billion in the January-to-June period, covering 51.8 percent of annual target. Income tax revenues, which accounted for 51.7 percent of projected annual amount, reached LTL 1.653 billion.
The 2005 budget projects annual revenues of LTL 15.564 billion, including LTL 2.676 billion in EU assistance funds.
Kauno Diena, Lietuvos Rytas, Lietuvos Zinios, Respublika

Gamblers spent LTL 57 million
Lithuania's gaming industry earned a total of LTL 57.395 million from gamblers in the first six months of 2005, a surge of 46.8 percent from the year-earlier figure. Domestic gambling operators generated a total of LTL 260.072 million in revenues during the six-month period (a surge of 58.6 percent year-on-year) and distributed LTL 202.676 million in winnings (up by 62.3 percent). In 2004 Lithuanian gaming industry earned LTL 87.341 million from gamblers, a twofold rise from 2003. Industry's revenues came in at LTL 373.948 million, a surge of 2.1 times, while winnings paid out totalled LTL 286.61 million, a rise of 2.2 times from 2003.
Kauno Diena, Lietuvos Zinios, Lietuvos Rytas

Car sales grew by one-third
A total of 5,583 new and used cars were bought through lease-purchase arrangements in Lithuania in the first half of 2005, a rise of 28.2 percent from the year-earlier figure of 4,356 passenger vehicles. The number of brand new cars acquired through lease-purchase rose by 24.8 percent, year-on-year, to 4,426, while the number of used cars surged by 43 percent to 1,157 in the reporting period.
Verslo Zinios

Tuesday, 19th of July

Utenos Trikotazas boosted its sales
Lithuania's knitwear maker Utenos Trikotazas controlled by SBA concern posted sales of LTL 64.846 million for the first six months of 2005, a decline of 7 percent from the year-earlier figure and a slight rise versus the target sales of LTL 64.84 million. In June alone, the sales rose by 16.2 percent, year-on-year, to LTL 12.877 million, from LTL 11.082 million in Jun. 2004.
"Owing to well-outlined strategy and activities the impact of competition with Asian producers has not showed up. The order portfolio increased in the first six months of the year, and we use full production capacities," Regina Sajiene, Utenos Trikotazas CEO, said.
Lietuvos Zinios, Lietuvos Rytas, Kauno Diena, Respublika, Verslo Zinios

Container trains is to set off
A new container train is to be launched in Lithuania in the last decade of July. The project is meant to boost international cargo flows to Klaipeda and Kaliningrad ports. The container train, which is to operate under the name of Mercury, is a joint project of Lithuania, Russia and Belarus. It is very similar to the project of Viking, a combined transport shuttle train Odessa-Klaipeda-Odessa, which began two and a half year ago, Lietuvos Gelezinkeliai, the national railway operator. Both trains can deliver goods to the place of destination in considerably shorter time and at lower tariffs. But, differently from Viking, Mercury will be carrying only containers.
Respublika, Lietuvos Rytas, Verslo Zinios

EC is to allocate EUR 88 million
The European Commission is soon to fulfil its promise and transfer EUR 88 million euros to the International Fund of Donors, the money accumulated in which are used to finance the Ignalina nuclear plant decommissioning projects. The actual sum of the money in the fund amounts now to EUR 334 million. EUR 302 million were accumulated through the money transfers of the European Commission, whereas the other EUR 32 million were received from the donor countries. Together with the interest, the total sum stands at EUR 341 million. The sum already used accounts for EUR 75.6 million. They went to project contractors.
Kauno Diena

Monday, 18th of July

Lifosa posted 13 times greater profit
Lifosa, the Lithuanian phosphate fertilizer manufacturer controlled by Russia's Eurochem, posted unaudited net earnings of LTL 38.36 million for the first six months of 2005, a surge of 12.5 percent from the year-earlier figure. The company's sales rose by 11.7 percent, year-on-year, to LTL 271.507 million in the reporting period.
Regvita Ivanoviene, Lifosa CEO, said that the performance figures improved on the back of increase in the prices of our products.
Verslo Zinios

Nord/LB Leasing sets up in Kaliningrad
Nord/LB Lizingas, a leasing subsidiary of Nord/LB Lietuva, the third-largest by assets Lithuania's commercial bank controlled by Germany's Nord/LB, has opened its first foreign representative office in Russia's Kaliningrad city. Nord/LB Lizingas would offer its services to business active in the Russia's exclave of Kaliningrad and would specifically target companies with foreign shareholders.
Verslo Zinios

Income of Inida
Inida, a Lithuanian producer of personal and laptop computers, announced LTL 5.4 million worth of six-month sales. The sales slumped 14.3 percent versus the first half of 2004. Ramunas Dirvelis, the chief executive of Inida, states that he computer producer projects a 12-percent increase in sales of 2005 to LTL 14 million.
"Sales went down in the first half because we gave up loss-making operations; besides, we handled a few large orders in the previous year. The sales from average orders this year rose 20 percent”, Dirvelis said. Lietuvos Rytas

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