Observer "Lietuva"

WEEK 2.2006

Saturday, 14th of January

Lietuvos Gelezinkeliai boosts revenues
Lietuvos Gelezinkeliai reported LTL 1.1 billion in revenues for full 2005, a rise of almost 8 percent from the year-earlier figure. The net earnings of the state-run railway operator declined by 2.8 percent, to some LTL 70 million, from LTL 72 million a year before. The annual consolidated revenues, which include the performance figures from subsidiaries, made up LTL 1.255 billion. The operator linked the decline in earnings with the rise in prices of fuel and other resources. The railway operator carried 49.3 million tons of freight, a rise of 8 percent over 2004, preliminary data have shown. The company recorded an increase in both transit and local freight traffic. Moreover, Lietuvos Gelezinkeliai carried 6.8 million passengers in 2005, a decline of 3 percent versus 2004.
Lietuvos Zinios

FDI flow declines in the country
The foreign direct investment (FDI) flow in Lithuania reached LTL 1.4 billion in the first eleven months of 2005, down by LTL 616 million or 31 percent from the same period a year before. In November alone, the FDI flow made up LTL 65 million. Taking into account direct investments by domestic companies abroad, the net inflow in investments made up LTL 525.7 million in the January-to-November period of 2005, while in November alone the net outflow totalled LTL 35.6 million.
Kauno Diena, Lietuvos Zinios

According to the data of Statistics Department, the exports of goods grew by 3.4 percent in November 2005, month-on-month, while imports advanced by 3.6 percent. Service exports declined 1.6 percent; imports plunged by 3.6 percent, whereas the aggregate positive balance surplus soared by LTL 6.8 million to LTL 213.8 million in the respective period.

Friday, 13th of January

LAL trims 2005 loss to EUR 2.3 million
Lietuvos Avialinijos (Lithuanian Airlines, or LAL), the country's biggest air carrier, reported preliminary losses of LTL 8 million for 2005, down 11.5 percent from losses of LTL 9.04 million in 2004. The company said that it managed to significantly reduce losses in the last quarter of 2005 after posting losses of LTL 24 million for the first nine months of the year.
LAL said earlier that it expected trim its losses to LTL 5-8 million by the end of the year. It aims to return to profit this year and to become a leading air carrier in the Baltic region within the next few years.
The company, which has almost now reserves and real estate, said last December that it might go bankrupt unless it reached an agreement with Vilnius Airport on the repayment of almost LTL 12 million in debt. LAL's total debt to the airport exceeds LTL 19.5 million.
Lietuvos Zinios, Verslo Zinios

Stumbras lifts 2005 sales to EUR 30 million
Stumbras, Lithuania's leading alcoholic beverage producer, reported sales of LTL 102.133 million for 2005, a rise of 13.8 percent from sales of LTL 89.778 million a year earlier. The company said that sales for December rose by 10.2 percent year-on-year to LTL 14.169 million.
Stumbras CEO Ceslovas Matulevicius attributed this growth to active marketing efforts and a clear sales strategy both in the domestic and foreign markets.
"The company gave a top priority to improving the quality of its products and packaging, as well as to other marketing activities. It invested over LTL 3.2 million in this area," he said.
Verslo Zinios, Lietuvos Rytas

Revenues from incoming tourism increase
Lithuania's revenues from incoming tourism totalled LTL 2.43 billion in the first ten months of 2005, a surge of 24.4 percent from the year-earlier figure. Lithuania's tourists spent LTL 1.74 billion on holidays or recreation, including purchases, in the January-to-October period of 2005, a rise of 17.5 percent over the year.
According to the data of the Statistics Department, the number of foreign guests at Lithuania's companies providing accommodation services surged by 14.8 percent, year-on-year, to 565,600 in the first nine months of 2005.
Verslo Zinios

Thursday, 12th of January

Lithuanian beer market grows
The Lithuanian beer market made up 256.88 million litres in 2005, a rise of 4.5 percent from the year-earlier figure of 245.92 million litres. Svyturys-Utenos Alus remained the number one beer producer with a 48.24 percent market share, as its beer sales for full 2005 went up by 3.1 percent year-on-year to 123.93 million litres. Kalnapilio-Tauro Grupe was second with a 23.83 percent market share. The company's beer sales edged up by 0.1 percent year-on-year to 61.22 million litres in 2005. Ragutis raised full-year beer sales by 7.8 percent to 27.94 million litres and held a 10.88 percent market share. Gubernija recorded an 11.1 percent rise in beer sales to 27.5 million litres, which gave it a market share of 10.71 percent. Lithuania's major breweries exported 15.18 million litres of beer in 2005, a surge of 51.4 percent from the year-earlier figure of 10.03 million litres. Svyturys-Utenos Alus saw exports drop by 5.3 percent year-on-year to 6.64 million litres of beer in 2005. Kalnapilio-Tauro Grupe was the second with the full-year beer exports of 4.21 million litres, a surge of 2.4 times from the year-earlier figure. Gubernija's beer exports soared 3 times, to reach 3.77 million litres last year.
Lietuvos Rytas, Respublika, Verslo Zinios, Lietuvos Zinios

Jump in consumer loans expected in Lithuania
The number of consumer loans in Lithuania should rise by over 60 percent in the first half of this year and the number of bankcards with a credit limit should go up by more than one-third, a survey showed. Spinter, a public opinion and market research company, conducted the representative population survey for Parex, a Lithuanian commercial bank, in late 2005.
"A growing number of people, who were very cautious about borrowing earlier, decide to take on loans. Some people have already used loans to achieve their goals and that encourages their relatives and people they know to follow their example," Igoris Ryklys, director of Parex's Retail Banking Service, said.
Some 1.5 percent of the polled said they had taken out more than one consumer loan. Some 14.9 percent of the population use bankcards with a credit limit and 4.9 percent intend to obtain one in the next 6 months.
Verslo Zinios

Klaipedos Nafta expects to handle 0.5 million tons in January
Although Mazeikiu Nafta is working at half-strength, Klaipedos Nafta expects the Lithuanian crude refinery to export 400,000 to 450,000 tons of oil products via the Klaipeda oil product terminal this month. The total volume of oil products going through the terminal should reach around 500,000 tons in January.
"There isn't any major decline in the volume of products from Mazeikiu Nafta. Of course, it cannot be the same, with repairs on a piece of equipment underway," Klaipedos Nafta's production director, Gediminas Vitkauskas, said.
Verslo Zinios

Wednesday, 11th of January

Annual inflation grows 0.1 percent in December
Annual inflation in December 2005 amounted to 3 percent and was 0.1 percent higher than the inflation figure in 2004, the Statistics Department reports. In December 2005 consumer prices increased 0.1 percent. Over a year, the price rise amounted to 2.8 percent, meanwhile service prices increased 3.5 percent. Last year's inflation was mostly due to a rise in prices of transport goods and services and in prices of housing, water, electricity, gas and other fuel.
The average annual inflation in 2005 amounted to 2.7 percent. A threat has arisen that Lithuania’s inflation rate might surpass the Maastricht index, one of the crucial factors for permission to adopt a general EU currency in the country.
Verslo Zinios, Lietuvos Zinios, Respublika, Kauno Diena

Lithuanian army to spend LTL 19.8 million in food
In line with the agreements concluded after public procurement tenders last year, the Lithuanian army will spend LTL 19.8 million on food products this year. The army spent a similar sum on food last year, too.
Sigitas Dzekunskas, head of the Procurement Service of the Land Defence Ministry, reported that all the suppliers are from Lithuania and nearly all the products, with the exception of fish, canned fish and tropical fruit, are of Lithuanian origin.
Lietuvos Zinios

Prime Minister avoids conflicts with Gazprom
The Prime Minister of Lithuania Algirdas Brazauskas claims that the Lithuanian Government cannot get into conflicts with the single gas supplier to Lithuania – the Russian gas concern Gazprom – and reduce the gas sale mark-up applied by Lithuanian gas importers.
In Brazauskas’ opinion, the Natural Gas Law, amendments to which are to be discussed in the Seimas, cannot regulate the main price – the price of imported gas in the Lithuanian border zone – “therefore this dispute and passions are absolutely unnecessary”, he remarked on Tuesday.
Still, the Prime Minister admitted that gas tariffs should be and are regulated a bit: at present their sale mark-up amounts to 15 percent.
Kauno Diena, Verslo Zinios

Tuesday, 10th of January

Lithuania should decide on a new nuclear plant this year
Economy minister Kestutis Dauksys said that Lithuania should take a decision on a new nuclear power plant without delay and that the project would require around EUR 350 million in an initial investment from the state.
"This year, we must have a clear decision if and what we shall build, and decide who could invest in it and begin negotiations," Dauksys said at a news conference on Monday.
In his opinion, the government should have at least a 30 percent stake in the new plant, which would cost around three billion euros, and would have to make an initial contribution amounting to one-third of its share of the total cost.
Estonian and Latvian energy companies, which have expressed interest in joining the project, and other investors, could also take stakes in the project.
Lietuvos Rytas, Respublika, Kauno Diena

Polish company among candidates to purchase MN
A Polish oil company PKN Orlen, one of the candidates to purchase the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil or MN), does not really cherish hope to control the Lithuanian oil refinery. Igor Chalupec, the head of the Polish company, claims that they have not been the favourites of the tender from the start. According to him, the Lithuanian Government has named the Russian concern TNK-BP and a Kazakhstan company Kazmunaigaz as the most realistic winners of the tender.
According to Chalupec, if the Poles acquired Mazeikiu Nafta, a synergy effect would be obtained: an economic organism in the Central and Eastern Europe that would cover Lithuania, Poland and the Czech Republic, where PKN Orlen already has refineries, would be created.
Besides, PKN Orlen plans to launch oil extraction business abroad and to open a gas station chain in Lithuania.
Lietuvos Rytas

Lithuanian export figure rises
Lithuanian exports grew by 27.2 percent to LTL 29.732 billion in the first eleven months of 2005 from a year earlier figure, while imports rose by 24.5 percent to reach LTL 38.86 billion, the Statistics Department reported citing preliminary data based on customs declarations and Intrastat reports.
The foreign trade deficit widened by 16.4 percent year-on-year, to LTL 9.128 billion in the reporting period.
The country's biggest export partner was Russia with 10.4 percent of total exports in the eleven month period, followed by Latvia with 10.2 percent, Germany with 9.4 percent and France with 7.2 percent.
Respublika, Lietuvos Zinios, Kauno Diena, Verslo Zinios

Last year was successful for Snoras bank
Snoras bank retained stable growth rate last year and successfully increased its market share. Based on the preliminary non-audited data, the assets of AB Snoras amounted to LTL 3.260 billion as of January 1, 2006, up from LTL 1.934 billion a year ago. This is the biggest growth in the history of the bank.
Snoras controls 10 regional branches and a chain of 208 mini banks in Lithuania. It has agencies in Latvia, Estonia, Russia, Ukraine and Belarus.

Monday, 9th of January

New products
Vilnius Gediminas Technology University (VGTU) together with the Innovation Centre of an IT company Alna are creating a tomograph analysis application that will make it possible to automate and speed up stroke diagnosis and would facilitate doctor’s job.
The authors of the application believe that their product would be successful in the international market, as it is unique. One of the advantages of the new application is that it is compatible with common computers and does not have to be installed in tomographs.
The project conducted for the third year is partly funded by the EU program Eureka, the other part of the project is funded by Alna. German, Latvian, British and French clinics and hospitals have already joined the project.
Lietuvos Rytas

Furniture company negotiates with Wal-Mart
A furniture company AB Vilniaus Baldai (Vilnius Furniture) surpassed AB Klaipedos Baldai (Klaipeda Furniture) last year, nevertheless, both companies call the last year successful.
Vilniaus Baldai controlled by the investment company Invalda boosted sales by 10.3 percent last year, to LTL 110.849 million. Viktoras Majauskas, director general of Vilniaus Baldai, says the company has begun negotiations over furniture production with the representatives of the US retail trade chain Wal-Mart and the British Argos. Majauskas says the Americans might become the second big partner of Vilniaus Baldai; the first one is the Swedish furniture trade concern IKEA.
Klaipedos Baldai, a part of SBA furniture group, posted 13.4 percent lower turnover for 2005 year-on-year. Turnover of the whole SBA furniture group increased 14.4 percent in 2005 and stood at LTL 318.291 million.
Verslo Zinios

Number of rural tourism service users grows
215,000 people visited Lithuania‘s rural tourism farmsteads last year, a 15.5 percent rise year-on-year. In December 2005 the number of tourists amounted to 23.2 thousand, i.e. 14 percent more than in December 2004.
The Lithuanian Rural Tourism Association reported that Aukstaitija region attracted majority of tourists last year – 9,000 people, Zemaitija and Dzukija regions attracted 8.4 thousand and 3.9 thousand people respectively, while 1.4 thousand of tourists chose Suvalkija region last year.
Based on preliminary data, over LTL 64 million of European Union’s support are requested for improvement of alternative farmers’ activity in rural areas and forest domain infrastructure.
Lietuvos Zinios

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