Observer "Lietuva"

WEEK 10.2006

Friday, 10th of March

Lietuvos Draudimas nets LTL 16.8 million
Lietuvos Draudimas, the largest Lithuania's non-life insurer, reported LTL 16.8 million in unaudited net earnings for 2005, a plunge of 22.2 percent versus the year-earlier figure of LTL 21.6 million.
"Last year was the year of success. Our growth rate outstripped the expansion of overall non-life insurance market, which enabled us to boost our market share by approximately 4 percentage points," Kestutis Serpytis, Lietuvos Draudimas CEO, said.
Last year results were affected by changes in real estate accounting principles, which weighed the profit figure lower by LTL 10.3 million as a result of real estate reappraisal, said Darius Masionis, the company's CFO.
"Excluding the effects of changes in property accounting, our net result would be LTL 27.1 million, a rise by one-fourth versus 2004," Masionis noted.
He projected that the net earnings of 2006 would be similar to or exceed the last year figure slightly.
The amount of premiums signed by the insurer surged by 26 percent, year-on-year, to LTL 262.9 million, while the market share of the company expanded to 34.8 percent, from 30.6 percent a year earlier. The total amount of payouts rose by 14 percent, to LTL 102.3 million.
Lietuvos Rytas, Respublika, Verslo Zinios

Bird flu may cause damage of EUR 30 million to Lithuania
Lithuania may suffer a damage of approximately LTL 100 million from bird flu, according to preliminary calculations published by the Agriculture Ministry. The ministry pledged to compensate up to 100 percent of damages incurred by poultry keepers from the avian influenza. Some 174,260 poultry keepers are registered in Lithuania. They keep 9.088 million birds including 6.95 million birds kept at poultry companies and 2.1 million at farms. No bird flu cases have been recorded in Lithuania so far, however, the deadly virus is expected to reach Lithuania in about ten days after swans infected with bird flu were determined in Poland earlier this month.
Lietuvos Zinios

Tobacco
Preliminary data shows that the value of imported tobacco products amounted to LTL 173 million in Lithuania last year, a rise of 75 percent since 2004 when the imports came in at LTL 99 million. Tobacco exports grew by 162 percent to LTL 347 million in 2005, compared to LTL 133 million in 2004. House of Prince Lietuva, JT International , Philip Morris Lietuva, British American Tobacco, Gallaher Group and other companies import tobacco products to Lithuanian presently.
Respublika, Lietuvos Rytas, Lietuvos Zinios

Thursday, 9th of March

Government to approach Yukos with specific proposals over Mazeikiu Nafta
Lithuania's government will submit specific proposals over the purchase of controlling stake in Mazeikiu Nafta from the embattled Russian oil company Yukos this Friday, Prime Minister Algirdas Brazauskas has announced. He refused to make any detailed comments stating that the aspects of purchase of the controlling stake in the sole Baltic oil refining and transportation complex were considered at a closed-door meeting.
"The government has expressed its position over this issue and will submit an offer to purchase the shares," Saulius Specius, PM adviser and a member of task group for talks with Yukos, said.
He refused to disclose whether the government had received Yukos' offer to acquire the 53.7 percent stake in Mazeikiu Nafta via the exercise of its pre-emptive rights and when the authorities expected to get a response from the Russian company.
Brazauskas first spoke about Lithuania's intentions to acquire the controlling stake in Mazeikiu Nafta from Yukos on Monday.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Consumer prices unchanged in Lithuania in February
Consumer prices remained unchanged in Lithuania in February versus January. If compared with February 2005, the consumer prices rose by 3.3 percent. The average annual inflation for the last 12-month period made up 2.8 percent. The Statistics Department projected 0.1 percent deflation for February.
Last month, the consumer price index (CPI) was mostly influenced by a 0.5 percent rise in the prices of foodstuffs and soft drinks, a 0.7 percent increase in the prices of housing and utilities, and a 1.5 percent rise in the prices of various goods and services.
The prices of consumer goods edged down by 0.1 percent, while the prices of services rose by 0.7 percent over February.
Kauno Diena, Respublika, Lietuvos Rytas, Verslo Zinios

Government authorizes Finance Minister to apply for early assessment of Lithuania's euro readiness
Lithuania's government and the Bank of Lithuania are likely to apply to the European Commission (EC) and the European Central Bank (ECB) for the assessment of Lithuania's readiness to adopt euro in 2007 on Friday, March 10. The respective request could be submitted coming Friday, Ricardas Slapsys, an adviser to the Minister of Finance, said.
Reinoldijus Sarkinas, the Bank of Lithuania governor, did not discount such a possibility as well. He noted, however, that he needed respective authorities from the board of the central bank, which could be extended in the nearest time.
Lietuvos Zinios

Wednesday, 8th of March

Carriers post LTL 3 billion in revenues
Members of Lithuania's National Road Carriers Association Linava reported about LTL 3.385 billion in combined revenues on transportation business for full 2005, including some LTL 3 billion generated through cargo conveyance and LTL 385 million from passenger transport services. The revenues of cargo carriers surged by some 25 percent versus 2004, while the revenues of passenger transport companies expanded by some 20 percent.
"The growth in revenues of cargo carriers resulted on the expansion of vehicle parks and greater efficiency. However, the rise in costs exceeded the increase in revenues by the average of some 6 percent in each company," Jonas Grybauskas, Linava vice-president and chairman of cargo transport council, said.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

Lithuania's beer market grows 6.3 percent
The Lithuanian beer market made up 30.94 million litres in the first two months of 2006, a rise of 6.3 percent from the year-earlier figure, the Lithuanian Brewers' Association reported citing the results from its members. In February alone, the sales of association members surged by 11.7 percent, year-on-year, to reach 16.53 million litres. Svyturys-Utenos Alus, controlled by the Nordic group Baltic Beverages Holding, remained the number one beer producer with a 47.71 percent market share, as its beer sales for the two-month period went up by 6.6 percent year-on-year to 14.76 million litres. Kalnapilio-Tauro Grupe, which is majority owned by Denmark's Royal Unibrew, was second with a 23.5 percent market share, 0.06 points up versus the first two months of 2005. The company's beer sales rose by 6.6 percent year-on-year to 7.27 million litres in the reporting period.
Lietuvos Zinios

Lukoil Baltija raises sales 18 percent over 2005
Lukoil Baltija, the operator of the largest Lithuania's chain of filling stations, reported LTL 1.453 billion in unaudited sales for full 2005, a rise of 17.8 percent from the year-earlier figure of LTL 1.233 billion. Ivan Paleichik, the company's CEO, attributed the growth to continuous investments into new services and customer service quality.
Lukoil Baltija channelled LTL 14.8 million for investments last year, a surge of 54 percent versus the 2004 investments of LTL 9.6 million.
The company's Lithuania's chain currently covers 115 filling stations.
Respublika

Tuesday, 7th of March

Baltic energy operators to launch arrangements for building of new nuke reactor
Three Baltic energy operators, Lietuvos Energija, Eesti Energia and Latvenergo, are to sign a memorandum of agreement over the arrangements for the construction of a new nuclear reactor on Wednesday. As stipulated by the memorandum, the parties will take part in the project on equal terms. The management and supervision will be performed by an executive committee to comprise the executives of all three energy companies. The parties will also share the project costs as related with the common interests equally, Lietuvos Energija has announced.
Lietuvos Zinios, Lietuvos Rytas, Kauno Diena, Respublika, Verslo Zinios

Rokiskio Suris mulls split of fresh dairy products business
Rokiskio Suris, the largest Lithuania's cheese producer, aims to split its fresh dairy products business into a new subsidiary.
"The board of Rokiskio Suris has decided to split the fresh dairy products business, which is focused on the domestic market, from the export-oriented cheese business and boost its effectiveness," Dalius Trumpa, Rokiskio Suris production director, said.
The reorganization should be completed by the end of the year with the consent of shareholders. The new company would operate the dairy plants in Utena and Ukmerge.
Rokiskio Suris reported LTL 23.5 million in consolidated net earnings for full 2005, a decline of 15.3 percent from the year-earlier figure of LTL 27.73 million. Consolidated revenues rose by 2.9 percent, to LTL 464.3 million, from LTL 451.393 million in 2004.
Lietuvos Rytas

Tourists
The incoming tourist flow to Lithuania surged by 11.1 percent last year, to 2 million tourists, from 1.8 million a year earlier. In 2006 the incoming tourist flow is seen growing by twice as slower pace, at some 6 percent. As reported by the Statistics Department, Lithuania's hotels, motels, guesthouses, rest houses and sanatoriums serviced 1.3 million guests last year, a surge of 18.5 percent year-on-year. The number of foreign guests, alone, at 681,500, rose by 15.5 percent versus 2004.
Lietuvos Rytas, Lietuvos Zinios

Monday, 6th of March

Vilniaus Baldai lifts its sales
Vilniaus Baldai, one of Lithuania's leading furniture manufacturers, said its sales for the first two months of this year rose by 22.9 percent year-on-year to LTL 19.205 million. Sales for February increased by 18.3 percent year-on-year to LTL 9.132 million. In January, Vilniaus Baldai's pretax profit more than doubled from a year earlier to reach LTL 250,000, as sales jumped by 27.5 percent to LTL 7.901 million. The Vilnius-based furniture manufacturer has invested LTL 65 million in production expansion and modernization over the past two years.
Respublika

EU to provide EUR 50 million to Lithuania for personnel training
Lithuanian companies and organizations stand to receive LTL 172 million from the EU's structural funds for personnel training programs this year, the Social Security and Labour Ministry said. The financial support from the European Social Fund (ESF) will help more than 120,000 employees of both the private and public sectors to improve their professional qualifications. The Social Security and Labor Ministry, the European Social Fund Agency and representatives of almost 200 local companies and organizations will sign agreements on ESF funding on Monday.
Verslo Zinios

Estravel Vilnius expands
UAB Estravel Vilnius, using franchise of business trips company American Express, is planning to open its offices in the biggest Lithuania’s cities. This year the company will open an office in Klaipeda. Sales of business trips of Estravel Vilnius grew 20 percent last year compared to 2004. Belonging to American Express chain boosts the company’s development, too.
Verslo Zinios

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