Observer "Lietuva"

WEEK 4.2006

Saturday, 28th of January

Lithuanian GDP grows 7.3 percent in 2005
Lithuania's gross domestic product grew by 7.3 percent to LTL 70.763 billion last year. In the fourth quarter, the economy expanded by 8.2 percent year-on-year to LTL 19.320 billion, according to preliminary data. The department on Friday published its first GDP estimate for 2005. GDP per capita in the full-year 2005 was LTL 20,659, up 7.6 percent compared with 2004. In the last quarter, it was LTL 5,640, a rise of 8.6 percent year-on-year.
All key sectors of the economy, with the exception of mining and quarrying, contributed to the GDP growth last year.
Lietuvos Zinios, Lietuvos Rytas, Kauno Diena, Respublika

Salaries rise 12.2 percent last year
Average monthly earnings in Lithuania rose by 12.2 percent to LTL 1,289.5 last year, according preliminary data. Real wages, adjusted to inflation, increased by 7.8 percent to LTL 925.2, Algirdas Semeta, director general of the Statistics Department, said in a news conference on Friday.
"As salaries rise, labour costs go up as well. In terms of (labour cost) growth, Lithuania was second only to Latvia in the European Union in the third quarter of last year," he said.
In the third quarter, labour costs per hour worked in industry rose by 15.7 percent in Latvia and 10.7 percent in Lithuania.
"This shows that incomes of our employees are increasing. However, rising labour costs add to competitive pressure on the economy," Semeta said.
Lietuvos Zinios

RDA book publisher launches business in Lithuania
The Reader's Digest Association (RDA) is launching a book-publishing venture in Lithuania in partnership with Alma Littera, the country's leading book publishing house.
"We are delighted to announce plans to enter these markets and bring our book publishing to more corners of the world," RDA president and CEO Eric Schrier said in a statement. "Bulgaria and Lithuania expand our operations in central Europe, where our presence is already growing fast."
Lietuvos Rytas

Friday, 27th of January

Klaipeda rejects terephthalic acid plant project
The council of the Klaipeda district municipality on Thursday did not give permission to NB Europe for the construction of a new plant for terephthalic acid, a component of polyethylene terephthalic polyester, or PET. The municipality said in a statement that it refused permission because of a lack of proof that a high concentration of chemical industry installations in the area would not be dangerous, as well as a lack of analysis of the environmental, economic, social and health effects of the project. Local residents were also opposed to the project due to health and environmental concerns. NB Europe opened a new PET plant close to the city of Klaipeda in late October last year. The company bought more land next to the site and wanted to build the terephthalic acid plant there.
Respublika, Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios

Baltic energy companies to conduct study on new nuclear plant
Energy companies of Lithuania, Latvia and Estonia have agreed to undertake a joint feasibility study into the construction of a new nuclear power plant. The companies reached this agreement during an international energy conference that got underway in Vilnius on Thursday. The three Baltic countries are looking for ways of boosting energy capacities to overcome a potential energy shortage in the region after 2015. The idea of building a new nuclear plant is expected to receive political support from all three countries after the feasibility study is completed, which should happen by this autumn.
"Starting in 2015, all Baltic countries will be facing energy shortages and a new atomic plant is a way of solving this problem," Lithuanian Economy Minister Kestutis Dauksys said.
Rymantas Juozaitis, CEO of Lietuvos Energija (Lithuanian Energy), said that the study would be part of a common Baltic energy strategy.
The Lithuanian government is expected to endorse a renewed national energy strategy this year, which will also underline the need for a new nuclear power plant.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Stumbras boosts earnings
Stumbras, Lithuania's leading alcoholic beverage producer, reported LTL 21.6 million in unaudited pretax earnings for 2005, a threefold surge versus the year-earlier figure of LTL 7.31 million. The company posted sales of LTL 102.133 million for full 2005, a rise of 13.8 percent from the sales of LTL 89.778 million a year earlier. Exports surged by 2.6 times, year-on-year, to reach LTL 17.225 million last year.
Lietuvos Rytas

Thursday, 26th of January

E-banking usage in Lithuania surges 40.9 percent
Ten Lithuanian commercial banks had 1.31 million registered internet banking users at the end of 2005, a surge of 40.9 percent from the year-earlier figure of 926,843 users. Hansabankas, the leader of e-banking market, had 543,500 registered internet bank users, up by 29 percent versus 420,700 users as of January 1, 2005.
"The fast growth resulted on a significant surge in internet penetration rate and the evolving habits to use modern technologies," Ramunas Strauka, director of the Product and Electronic Channel Department at Hansabankas, said.
SEB Vilniaus Bankas, the key competitor of Hansabankas on the internet banking market, had 523,500 e-banking users as of Jan. 1, 2006, a surge of 82 percent versus the year-earlier figure of 377,290.
Nord/LB Lietuva ranked third with 119,817 online banking users early in January, 1.8 times as many as in the same period a year ago (65,819 users).
The number of Snoras e-banking customers surged 94 percent, year-on-year, to reach 49,703, while that of Sampo more than doubled to 23,900.
Kauno Diena, Lietuvos Zinios, Verslo Zinios

SEB Vilniaus Bankas to pay EUR 3 million in profit tax
SEB Vilniaus Bankas, Lithuania's biggest commercial bank by assets, has agreed to pay LTL 10 million in profit tax and late payment interest to the state, which is half of the amount claimed by tax authorities. The bank was presented with a tax claim of LTL 21.1 million last year. The State Tax Inspectorate (STI) said that it has signed an agreement with SEB Vilniaus Bankas on the amount of profit tax and interest. The bank is to pay the money into the state's coffers by the end of this week. The parties reached the settlement after they failed to solve the dispute in court. The dispute is being heard in the Stockholm International Arbitration Court and the agreement between the parties should provide a basis to terminate this proceeding, Daiva Bumblyte, head of the STI's Public Relations Office, said.
Lietuvos Zinios, Respublika, Verslo Zinios, Lietuvos Rytas

Lithuanian manufacturers soon to enter Iraqi market
Lithuania's companies may soon enter the market in Iraq as the Secretary of Lithuania's Ministry of Economy discussed possibilities to build bilateral economic and commercial relations with Walid Hamid Shiltagh, the ambassador of the Republic of Iraq to Lithuania. The envoy residing in Poland enquired about possible purchase of Lithuania-made building materials and other goods to contribute to the restoration of the war-torn country. He also spoke of a possible visit of Iraqi businessmen to Lithuania, the establishment of commercial relations and signing of cooperation agreements at the meeting with Economy Ministry Secretary Alina Maciulyte.
Verslo Zinios

Wednesday, 25th of January

Doleta to open office in Riga
Doleta, a Lithuanian manufacturer of windows and doors, aims to open a representative office in Riga as the company strives to boost the efficiency of its export operations. The new office, which is expected to launch business in February, should achieve the turnover of LTL 1 million this year. The company launched the deliveries of its windows to corporate and private customers in Latvia a couple of years ago, said Vytautas Silevicius, Doleta CEO.
The company currently has offices in Vilnius, Kaunas, Klaipeda and Siauliai, as well as in Russia, Belarus, Kazakhstan and Ukraine.
Doleta posted LTL 21.83 million in sales for 2005, a rise of 26.3 percent from the year-earlier figure of LTL 17.29 million. Revenues on exports, which is carried out through the subsidiary Doletos Langai, surged by 38.6 percent, year-on-year, to LTL 10.02 million. Export markets of Doleta include CIS countries, UK, Germany, Switzerland, US, Ireland, other Western European countries.
Verslo Zinios

EMP plans to establish companies in Finland and Norway
Lithuania's Elektroniniu Masinu Perdirbimas (Electronic Machines Processing, or EMP), the largest recycler of electronic waste in the Baltics, posted a 34.3 percent rise in sales to LTL 28.2 million for 2005, up from LTL 21 million in 2004. The company entered the Swedish market last year and plans to establish subsidiary companies in Finland and Norway, as well as in an unnamed Western European country, this year.
"The sales growth was largely due to our expansion into foreign countries. Last year, we set up companies in Poland and Estonia," EMP CEO Almontas Kybartas said.
EMP recycled around 2,000 tons of waste last year, including 1,500 tons of electronic waste. That was down from 2,000 tons of electronic waste it recycled in 2004.
EMP has electronic waste recycling units in Vilnius, Kaunas, Klaipeda, Siauliai and Marijampole. The company also has subsidiaries in Latvia and Kazakhstan.
Lietuvos Rytas, Verslo Zinios

RST projects higher profits
Rytu Skirstomieji Tinklai (RST), the state-run power distribution company, is projecting LTL 17.7 million in pretax profits and targets a further growth in revenue this year. RST reported on Tuesday that its operating revenue rose by 14.9 percent to LTL 852 million last year, according to preliminary data. This year the company has earmarked LTL 170 million for investment and aims to achieve a 2.7 percent growth in operating revenue.
The company supplies electricity to 715,000 customers in the counties of Vilnius, Panevezys, Alytus and Utena, and to some areas in the counties of Kaunas and Marijampole.
Lietuvos Rytas, Lietuvos Zinios

Tuesday, 24th of January

Lithuanian payment card market increased 8.5 percent
The Lithuanian payment card market grew by 8.5 percent last year, with the number of different cards issued by local banks reaching 3.09 million as of January 1, 2006. The aggregate turnover of cards increased by 31 percent in 2005 compared with 2004 to LTL 19.626 billion. In terms of card issuance, the market growth slowed down last year, from 17.3 percent in the previous year. The turnover growth, however, was close to the 2004 rate of 32.6 percent. The cooperation between banks and their partners will be an important factor that will help increase the popularity of payment cards.
Mantas Rimkus, director of the Payment Card Department at Hansabankas, said the number of credit cards issued by Hansabankas soared by 67 percent in 2005.
Lietuvos Zinios

LBS earns LTL 7.404 million on ferry sale
Lisco Baltic Service (LBS), the Klaipeda-based ferry operator controlled by Denmark's shipping group DFDS, posted a gain of some LTL 7.404 million on the sale of the ferry Palanga in mid-January. The gain on the sale would be included into the group's performance figures of 2006. LBS and DFDS have never disclosed the sale price of the ferry, which failed to meet the safe navigation requirements. The vessel was acquired by New Zealand's Monte Stello Limited.
Lietuvos Rytas

2005 budget revenues 11.4 percent above target
Lithuania's national budget revenues reached LTL 14.46 billion last year, which was LTL 1.474 billion or 11.4 percent more than planned. The preliminary revenue data do not include EU assistance money.
"The factors that had a positive influence on the budget revenue collection included the growing economy, increasing incomes of the population and continual improvement of tax administration," Finance Minister Zigmantas Balcytis said.
Total revenues including EU support funds reached LTL 16.48 billion, exceeding the ministry's target by LTL 817 million or 5.2 percent.
The central government collected LTL 12.132 billion in revenues last year, LTL 950 million or 8.5 percent more than planned. Total revenues including the EU money reached LTL 14.153 billion, which was LTL 293 million or 2.1 percent higher than the estimate.
Respublika, Lietuvos Zinios

Monday, 23rd of January

Earnings of SEB Vilniaus Bankas surge
The group of SEB Vilniaus Bankas, the largest Lithuania's commercial bank by assets, reported LTL 149 million in unaudited net earnings for full 2005, a surge of 25 percent from the year-earlier figure of LTL 119.1 million. The unaudited net earnings of SEB Vilniaus Bankas, the banking arm of the group, made up LTL 106.8 million, a decline of 11.4 percent versus the year-earlier figure of LTL 120.5 million, which, however, included the earnings of the bank's subsidiaries, in line with the international accounting standards then in effect.
Verslo Zinios, Respublika

Konica Minolta Baltia boosts sales
Konica Minolta Baltia, a representative of the Japanese camera and office equipment manufacturer in the Baltics, said its sales in the three countries rose by 20 percent to LTL 37 million last year. The company said sales of colour laser printers soared by 64 percent in 2005 compared with 2004. Sales of colour multifunctional copiers more than doubled and sales of digital cameras almost doubled.
Lietuvos Rytas

Norfa raises sales 39.5 percent in 2005
Norfa Group, the operator of the leading Lithuania's grocery chain, reported LTL 1.404 billion in consolidated sales for full 2005, a surge of 39.5 percent from the year-earlier figure of LTL 1.007 billion. The sales at Norfa chain alone expanded by 31.5 percent, year-on-year, to LTL 1.032 billion, from LTL 784.4 million in 2004.
Norfa's chain currently covers 109 outlets.
Verslo Zinios

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