Observer "Lietuva"

WEEK 40.2005

Saturday, 8th of October

Vilniaus Vingis will finish in red
Vilniaus Vingis, Lithuania's struggling manufacturer of TV deflection yokes, has revised its performance forecasts for this year and is now projecting losses of up to LTL 5.5 million. Earlier the company expected to end the year with a profit. The company also revised its 2005 sales forecast down to around LTL 82 million, which is 35 percent below the previous estimate. It said that a decline in the European TV-tube production market would prevent it from meeting its original pretax profit and sales targets, at LTL 3.5 million and LTL 127 million, respectively.
Lietuvos Zinios

Ban on meat imports was lifted
A ban on transporting third-country animal products from Lithuania through the Russian territory to other CIS countries has been removed. The Lithuanian State Food and Veterinary Service said on Friday that it had received a formal notification from the Russian Veterinary and Phytosanitary Service. The ban on shipping animal products, originating from third countries, from Lithuania via Russia to other CIS countries was put into place on September 13.
Respublika

Lukoil to supply 600,000 tons of oil
Russia's oil giant Lukoil, which is looking to buy a majority interest in Mazeikiu Nafta jointly with its US partner ConocoPhillips, intends to supply 600,000 tons of crude oil to the Lithuanian refinery in the last quarter of this year. This will bring total supplies this year to 2.3 million tons, Lukoil said in a statement. In January-September, LUKoil provided 1.7 million tons of oil.
Respublika

Friday, 7th of October

Biogas plant in Kaunas
A new combined heat and power plant using biogas from wastewater treatment was put into operation in the Lithuanian second-biggest city of Kaunas on Thursday. Kaunas Energija invested LTL 2.2 million in the co-generation plant in Noreikiskes, a suburb of Kaunas. The Lithuanian Environmental Investment Fund covered one-tenth of the project costs. Kaunas Energija CEO Sigitas Matelionis said that the new facility would use biogas produced by the wastewater treatment plant of Kauno Vandenys to generate energy. It has a capacity to produce 0.75 megawatts of electricity and 1.05 megawatts of heating energy. The new plant is expected to generate about LTL 2 million worth of heat and power annually. Kaunas Energija does not intend to revise heating prices, however. Kauno Vandenys produced 1.8 million m3 of biogas last year.
Lietuvos Zinios, Lietuvos Rytas, Kauno Diena, Respublika

Income of transport company advanced
The income of the companies, which belong to Linava Association uniting the Lithuanian carriers by motorways, amounted to LTL 2.65 billion in 2004, an increase of 6 percent compared to the preceding year. Linava published the figure after carrying a poll of its companies. At the present time, the Association unites 1,200 carriers, passenger transportation firms included. The income of the passenger transportation sector reportedly went down a little bit in 2004.
The number of vehicles issued quality certificates grew 80 percent. These 80 percent account for 70 percent of 13,993 automobiles registered in Lithuania. Ten of the firms of the Association each have from 80 to 200 vehicles; 35 companies operate 50 vehicles used for international transportation.
Lietuvos Zinios, Lietuvos Rytas

Biok saw the biggest turnover
Biok, a Lithuanian manufacturer of cosmetics, generated turnover of LTL 4.2 million in the first three quarters of the year, a 24 percent increase year-on-year. The sales of September are the best from all years of the company’s operation.
Three new products have been created in laboratories of Biok: shampoo, balsam and hair mask with brewer’s yeast. The production of the company is distributed in nearly all retail trade chains, pharmacies and cosmetics stores.
Verslo Zinios

Thursday, 6th of October

Beer market and exports grew
The Lithuanian beer market grew by 5.3 percent to 199.02 million litres in the first nine months of 2005, year-on-year. In September, its members sold a total of 22.43 million litres of beer, 18.7 percent less than in August but 11.2 percent more than in September 2004. Svyturys-Utenos Alus remained the number one beer producer with a 48.31 percent market share, as its beer sales for the nine months went up by 3.8 percent year-on-year to 96.14 million litres. Kalnapilio-Tauro Grupe was second with a 23.91 percent market share. Its beer sales fell by 0.02 percent year-on-year to 47.58 million litres. Ragutis raised beer sales by 8.1 percent to 21.39 million litres and held a 10.75 percent market share.
Lithuania's breweries exported 11.8 million litres of beer in the first nine months of this year, up 53.5 percent from 7.69 million litres a year earlier. Svyturys-Utenos Alus saw exports for the nine months drop by 5.6 percent year-on-year to 5.22 million litres of beer. Kalnapilio-Tauro Grupe exported 3.25 million litres of beer, almost a 3-fold increase compared with the same period a year ago.
Respublika, Lietuvis Zinios

Budget revenues advanced
According to preliminary data compiled by the Finance Ministry, the revenues of the state budget amounted to LTL 9.039 billion in January-September 2005, 4.6 percent higher than the original estimate. "One of the main reasons for such a good collection of state budget revenues is the successful operation of Mazeikiu Nafta, which started earning profits after a long break. The production volume of the company grew, and the enterprise paid LTL 135 million in taxes for the profits it earned in the previous year. Besides, the government, which is one of the shareholders of this company, received LTL 100.7 million in dividends," Zigmantas Balcytis, the Finance Minister, said.
Nine-month revenues of the central government budget were scheduled at LTL 8.64 million. Including the EU support funds, the total figure of central government's budget revenues made up LTL 10.568 billion in the reporting period.
Verslo Zinios, Respublika

New head of SEB Vilniaus Bankas
Audrius Ziugzda, board member and vice-president of SEB Vilniaus Bankas, will take up the lead at the top Lithuania's commercial bank. Ziugzda, who has been working for the bank since 1992, will replace incumbent SEB Vilniaus Bankas chairman Julius Niedvaras, 53, who has been appointed to be in charge of SEB expansion strategy in Russia and Ukraine. Ziugzda, 34, has refused to confirm unofficial reports about his appointment to head SEB Vilniaus Bankas, saying that any comments would be premature. Late in November 2004 Ziugzda was appointed a member of SEB Vilniaus Bankas board, vice-president and director of retail banking unit.
Lietuvos Zinios, Verslo Zinios, Respublika

Wednesday, 5th of October

Vilniaus Vingis expects to recover
Vilniaus Vingis, Lithuania's deflection yoke producer battling the downturn on European and global markets, posted sales of LTL 60.72 million for the first nine months of 2005, a plunge of 38.1 percent from the year-earlier figure of LTL 98 million. In September alone, the sales declined by 29.5 percent, to LTL 7.33 million, from LTL 10.4 million in September 2004. However, the company is expected a revival in October as the order portfolio for this month exceeds LTL 7.5 million.
Taken aback by the downturn on European and global markets, Vilniaus Vingis reported losses of LTL 1.468 million for the first half of 2005, down from the net earnings of LTL 4.389 million in the respective period of 2004.
Lietuvos Zinios, Respublika, Verslo Zinios

Jump of Apranga
Apranga, Lithuania's largest clothing retailer controlled by private MG Baltic concern, posted sales of LTL 137.76 million for the first nine months of 2005, a surge of 55.1 percent from the year-earlier figure of LTL 88.817 million. In September alone, the group's sales came in at LTL 19.2 million. Nine-month sales in Lithuania soared by 28.6 percent, year-on-year, to LTL 90.091 million. Sales in Latvia and Estonia surged 2.5 times, to LTL 47.669 million, comprising 34.6 percent of total sales figure.
Lietuvos Zinios, Verslo Zinios, Respublika

Restructurisation
In strive for bigger transparency and reliability Sampo Gyvybes Draudimas, a Lithuanian life insurance arm of Sampo group is to change its status from closed into opened joint stock company. In eight months this year, the premiums of Sampo Gyvybes Draudimas amounted to LTL 11.8 million. It had 7 percent of the domestic life insurance market.
Lietuvos Rytas

Tuesday, 4th of October

Ekranas launched production at full capacity
Ekranas, Lithuania's colour picture tube (CPT) producer suffering from a downturn on global electronics market, switched its third CPT assembly line on October 1 and has reached full manufacturing capacities after an approximately three-month break.
"The CPT assembly line, as scheduled, was started up on Saturday morning, and by now all three production lines are on line," Angelija Zokaitiene, Ekranas' spokeswoman said.
The company was making arrangements for the mass production of Slim Type CPT, she added. Investments into the new generation CPT would reach LTL 20 million, including LTL 3.8 million expected from the EU structural funds.
"New picture tubes have stirred great interest, we have already sent trial samples to both our old-time partners and prospective customers," Zokaitiene noted.
TV set manufacturers would need some three months to adjust their assembly lines for the use of new CPTs, she explained and added that Ekranas would launch massive production of Slim Type CPTs early in 2006.
The producer, which net earnings plunged by 15.7 percent, year-on-year, to LTL 1.29 million last year, is projecting the losses of LTL 10 million for 2005.
Lietuvos Rytas

Dvarcioniu Keramika to refinance debts
Dvarcioniu Keramika, the largest manufacturer of ceramic tiles in the Baltic States controlled by the Polish company Opoczno, borrowed LTL 45 million from Hansabankas to settle its debts with Snoras Bank and Turto Bank. The manufacturer paid debts of LTL 7.6 million and EUR 1.1 million to Snoras and USD 6.1 million to Turto Bankas. Another EUR 1.4 million was used to redeem debt papers issued by the company.
Lietuvos Rytas, Respublika, Verslo Zinios

Lithuania to escape negative sequels of euro introduction
The introduction of euro scheduled for 2007 would not result in any negative sequels for Lithuania's economy, President Valdas Adamkus has said.
"I have spent much time clarifying the myth that the introduction of euro would lead to an automatic rise in prices. However, there is no reason to believe that it would result in hardships for Lithuania's economic life," Adamkus said after Monday's meeting with Reinoldijus Sarkinas, the Bank of Lithuania governor.
Preparations for euro introduction - both legislative and technical - were under way with more than a year left until the actual adoption of the single currency, he noted.
In President's opinion, there were no objective reasons to believe that Lithuania might not adopt euro as scheduled.
Lithuania seeks to replace the national currency litas with the single currency early in January 2007. The eventual date of euro introduction will be set out by the EU following the review of Lithuania's compliance with Maastricht criteria.
Respublika, Verslo Zinios, Lietuvos Zinios

Monday, 3rd of October

Construction prices increased 0.2 percent
Construction prices in Lithuania rose by 0.2 percent in August from July and were 6.6 percent higher compared with the same period a year ago. The rise was due mainly to a 1.8 percent increase in the per-hour cost of construction equipment operation and a 0.3 percent increase in prices for construction materials and products. Labour and VAT costs edged down by 0.3 percent last month. Year-on-year, residential construction costs went up by 7.4 percent, non-residential construction by 6.9 percent, and engineering structures by 5.9 percent. In month-on-month terms, costs in the respective sectors went up by 0.2 percent, 0.1 percent and 0.2 percent. The steepest rise in prices was for cement, 4 percent, wood products, 2 percent, pipes, 0.9 percent, concrete and reinforced concrete products, 0.6 percent, and metal products, 0.5 percent.
Kauno Diena

Fuel prices reached record highs
Mazeikiu Nafta, the sole Baltic oil refining and transportation complex, has raised wholesale fuel prices for Sunday, putting the wholesale price of diesel fuel at new all-time highs. The trading house of the concern has announced that the wholesale price of 95 gasoline, the most popular grade in Lithuania, would rise by LTL 0.04 to LTL 3.07 per litre as of Sunday. The wholesale price of diesel fuel, meanwhile, will rise by LTL 0.03, to LTL 2.93 per litre. The previous record of the wholesale price of diesel fuel, i.e. LTL 2.9 per litre, was hit on September 5-6. The wholesale price of 95 gasoline reached all-time high of LTL 3.28 per litre on September 6.
Lukoil, the largest Lithuania's chain of filling stations, sells 95 gasoline at LTL 3.26 per litre in Vilnius. Statoil, the second largest chain of filling stations, offers 95 gasoline and diesel fuel at LTL 3.29 per litre. Lietuvos Zinios, Verslo Zinios

Millionth passenger of flyLAL
Gytis Radvilavicius, 29, became the millionth passenger of Vilnius Airport on Saturday. He arrived from Amsterdam to Vilnius via national air carrier flyLAL. The owners of the flagship carrier congratulated the lucky passenger and presented him 6 unpaid tickets for direct regular flights with LAL.
LAL carried 384.4 thousand passengers over the eight months of this year, a rise of 33.4 percent since the same period in 2004.
Kauno Diena, Respublika

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