Observer "Lietuva"

WEEK 35.2005

Saturday, 3rd of September

Future customers attacked Ryanair
Ryanair, an airline company, announced that it has sold 7,000 tickets for the first-month flights between Kaunas and London. The flights will start on September 22. This number comprises 60 percent of all tickets that can be possibly sold: a 189-seat Ryanair Boeing 737 can fly 11.34 thousand passengers a month. The distribution of the tickets from kaunas Karmelava airport and London Stansted airport started a month and a half ago. During the first month customers had a possibility to buy a return ticket for LTL 172, including airpost taxes. At the moment the tickets from Karmelava to Stansted including airport taxes cost LTL 106-296. Tickets from Stansted to Karmelava are LTL 126-735 each.
Lietuvos Rytas, Lietuvos Zinios, Respublika

Lithuanians do not rush for structural funds
Lithuania does not hurry to use the support from the European Union (EU) structural funds. From the beginning of its distribution, only 3.32 percent of all money has been allocated, which is LTL 138.217 million. The segment of transport, which got 64.8 percent, or LTL 89.5 million of all EU support, uses it the most intensively. The review of Lithuanian economy shows that during the first six months of this year 538 contracts for the allocation of LTL 615.274 million-worth EU support were signed. The amount paid, however, comprised only LTL 48.529 million.
Kauno Diena

Citizens are the most active buyers of computers
The analysts of computer equipment say that this year home users, and not companies or state institutions, acquired the largest number of computers. It appeared that 30 percent of users have installed computer equipment in their homes and the demand for this equipment continues to grow. Vytautas Stunzenas, the director of GNT Lietuva, says that the number of citizens who get permanent income increases; therefore, they can acquire computer equipment for their home use. The customers are mostly interested in computer technologies that can perform the functions of several equipments.

Friday, 2nd of September

Court does not stop the bankruptcy of Ingo Baltic
The lawsuit of bankruptcy, commenced for Ingo Baltic, a non-life insurance company, will be continued, as Vilnius district court has refused to accept the separate complaint of Autover Lietuva, which is one of the creditors, and to stop the process of bankruptcy. Tadas Klepsas, the lawyer of the association, says that they will decide whether to sue this judgement of the law after they have examined the motives of the judgement and the material of the case. The judgement can be sued in 7 days after its adoption. The company Autover Lietuva has a claim for several thousands of litas from Ingo Baltic.
Kauno Diena, Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

Textile manufacturers have separated spheres
Linas, a textile manufacturer separated its two major spheres: the manufacturing of textile products and the management of real estate. The authorized capital of Linas Nordic, which will carry on the manufacturing of textile production, will comprise a little bit less then LTL 6 million. The authorized capital of Lino Investicinis Fondas, which will be responsible for the management of real estate, will be LTL 12.4 million. Ramunas Lenciauskas, the presidents of Linas, hopes that the separation of unconnected spheres will facilitate the management of the asset of the company and enable a better development of the manufacturing.
Lietuvos Zinios

The prices of fuel is yet to grow
The operators of petrol-station systems claim that during the nearest several days the prices of fuel will definitely go up. Romas Turlinskas, the CEO of Lukoil Baltija, which controls the biggest petrol-station system Lukoil, says that all petrol-station systems are watching each other nervously and waiting for the moment when one of them exceeds the prices, so that everybody else can follow. On Friday in the trading house of Mazeikiu Nafta a ton of petrol will cost LTL 4,118, or, according to the data provided in the website of Mazeikiu Nafta, LTl 3.1 for one litre, which is LTL 0,15 more than on Wednesday.
Respublika, Lietuvos Rytas, Lietuvos Zinios

Thursday, 1st of September

The number of free work places decreased
At the end of the second quarter there were 6.1 thousand free work places for employers, which is 200 places less than at the end of the first quarter. Mostly the number of work places decreased in the construction sector – by 300. While the number of work places in health care and social management, defence and public insurance decreased by 200. according to the data provided by the department of Statistics, the number of work places in trade increased twice.
Respublika, Lietuvos Zinios

The investment of VST in Telsiai
Energetics in Telsiai have decided to reconstruct an old electric substation, which supplies electricity to the city and suburbs of Telsiai. More than LTL 9 million is going to be allocated for the reconstruction of the substation. More than 14 thousand users electricity, among which are such companies as Zemaitijos Pienas and Telsiu Vandenys, get the electricity from this substation. After the modernization of the substation, the electricity will be supplied more safely and reliably. The reconstruction will be started this year and it should be finished by the end of next autumn.

Gubernija losses
Gubernija, a domestic brewery in Siauliai, suffered losses of LTL 2.03 million in January-June 2005, 2.6 times more than the losses it sustained in the same period last year, when it amounted to LTL 792.2 thousand. The sales of the company went up 2.8 percent to reach LTL 25.583 million, comparing with the same period in 2004. Gubernija reported that the decrease in average prices of all their production had the most influence on the negative results of the first half-year. Besides, the expenditures of the companies activities increased, too.
Lietuvos Zinios

Wednesday, 31st of August

Vilniaus Akropolis increases its capital by LTL 31 million
Vilniaus Akropolis, a domestic real estate company that intends to get listed on the stock exchange, is increasing its authorised capital by LTL 31.111 million to LTL 245.36 million. The new issue of shares will be covered by the stock of Parko Investicija, a real estate company that is part of Vilniaus Prekyba, Diana Dominiene, the head of Vilniaus Prekyba, the operator of Vilniaus Akropolis, said.
"We are forming the Vilnius Akropolis real estate group to later be able to release a new issue of shares and get listed on the stock exchange," Dominiene said. Vilniaus Akropolis recently increased its authorized capital by LTL 33.067 million to LTL 214.249 million. This year the company intends to open a LTL 200 million shopping mall in Klaipeda. The similar project, estimated at LTL275 million has also been started in Kaunas.
Respublika, Lietuvos Zinios

Restructuring is awaiting Lietuvos Gelezinkeliai
Changes to the structure of the state-controlled railroad Lietuvos Gelezinkeliai are expected. Petras Cesna, the transport minister, said that the infrastructure of the railroad must be controlled by the state.
"At least in the first stage, the haulage of freight should also stay in the hands of the government, which should own a 51 percent stake," Cesna said.
But the transport minister added that restructuring plans are only being discussed at this time and have not yet been approved by any specific decisions. Comparing with 2003, the net profits of Lietuvos Gelezinkeliai in 2004 advanced 5.5 times to reach LTL 72 million. Turnover increased 11.2 percent to reach LTL 1.02 billion.

Failure to introduce euro will not be destructive for the Lithuanian economy
The analysts of SEB Vilniaus Bankas think that if euro is not introduced to Lithuania on time, it will not have a negative effect of Lithuanian economy. Still, they admit that there would be a threat for the prices of real estate as well as personal loans. The introduction of euro might be stopped if Lithuania failed to control the rise of prices. Gitanas Nauseda, the counselor of the president of SEB Vilniaus Bankas, thinks that after the failure to introduce euro, the number of citizens thinking that litas will be depreciated regarding euro will increase. Therefore, there would be an increase in loans in litas or, on the contrary, the pace of taking loans would slow down. Besides, the hopes for lower real estate prices might be dashed, too.
Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas

Tuesday, 30th of August

The profit of Zemaitijos Pienas fell
Zemaitijos Pienas, one of the third largest diaries by sales in Lithuania, suffered losses from its main operations in the first half of 2005. In January-June, the company was profitable only due to its financial and investment operations.
Zemaitijos Pienas reported that it suffered a loss of LTL 7.3 million in the first six months of 2005. The net profits of the dairy amounted to LTL1.298 million in the first half of 2005, 4.7 times lower than the net profits earned by the company in January-June 2004. This was caused by a 24-percent increase in milk procurement prices.
Lietuvos Zinios, Respublika

Snaige did not experience any loss
The heads of Snaige, the manufacturer of refrigerators in Alytus, says that neither the company, nor its partners suffered any loss because of the misunderstandings due to the application of import taxes in Ukraine for Lithuanian refrigerators. Snaige expects that Ukraine will continue to apply a 5 percent tax for the refrigerators that the company manufactures. Mindaugas Sestokas, the CEO of Snaige, said that the company believed the tax will remain the same , as such was the agreement when Ukraine joined the World Trade Organization. Sestokas also thanked the President of Lithuania Valdas Adamkus for the help while solving the problems connected with the import taxes.
Lietuvos Zinios

The average wage grew by 9 percent
The average pre-tax monthly wage comprised LTL 1331.5 in the second quarter of this year and, comparing the same period last year, was 9 percent higher. The average monthly wage mostly grew in the governmental sector and increased by 9.9 percent. The average pre-tax monthly payment, however, grew by 4.9 percent in the second quarter of 2005, comparing with the same period in 2004. Natalija Titova, the analyst in bank Nord/LB Lietuva, says that the growth of the monthly payment is mostly influenced by a rather quick growth in economy, the growing demand for work force and a rather restricted its supply.
Respublika, Lietuvos Zinios

Monday, 29th of August

Textile workers do not reject a possibility to transfer their production to Ukraine
Lithuanian textile companies, which are searching for cheaper work force are considering a possibility to transfer the manufacturing of uncomplicated production to Ukraine, where Utenos Trikotazas, the biggest Lithuanian knitwear producer belonging to SBA concern, has already invested. Vidmantas Viksraitis, the CEO of the association of Lithuanian outfit an textile companies says that Roze and Lelija, Vilnius outfit sewing companies, are interested in such possibilities.
The representatives of all companies that are interested in investments in Ukraine are invited to participate in an international exhibition Baltic Textile and Leather, which will take place at the end of August. The representatives will have a possibility to meet Kestutis Masalskis, the commercial attaché of Lithuanian embassy in Ukraine, who is going to introduce the situation in Ukraine an the abilities to invest there.
Kauno Diena

Farmers are paid less
According to the information provided by the informational system of Lithuanian agriculture and food products market, the prices of grain procurement in the second half of August were lower than last year. The specialists of informational system of Lithuanian agriculture and food products market, however, forecast that the prices of grain procurement should rise in the future and by the beginning of November should reach LTL 350 for one ton. The Ministry of Agriculture says that bad weather conditions have affected grain quality.
Kauno Diena

The prices of bank shares will stop growing
It is forecasted that the shares of banks will be the focus in Vilnius Stock Exchange this week. The market will be also expecting to get the eight-month results of the companies. The specialists claim that the shares of Siauliu bankas and Ukio bankas may settle down and if investors intended to receive their profit, the price of the securities of these banks would even fall. Analysts say that although the shares of Ukio bankas are the least valued in the market among the quoted banks, this investment has already started to loose its popularity. The plans to release another share emission as well as partially lower assessment of the shares of Ukio bankas had the most influence on the demand. The investors should pay attention to the eight-month results of the companies which are going to be announced in the short run.
Lietuvos Zinios

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