Observer "Lietuva"

WEEK 11.2006

Saturday, 18th of March

Snoras projecting one-tenth rise in earnings for 2006
Snoras, Lithuania's commercial bank controlled by Russia's Konversbank, is projecting its full year net earnings to rise by one-tenth over 2006, to LTL 45 million, from 40.669 LTL million in 2005. The current forecasts were cautious and based on the projected expansion of the banking network, the growth of customers numbers and the whole Lithuania's banking market.
Raimondas Baranauskas, Snoras' chairman, said that the bank was holding intense negotiations over the purchase of 53-55 percent of Cypriot Universal Bank. Moreover, Snoras was holding talks with an unnamed Estonia's bank concerning its purchase or alliance. He confirmed Snoras' aspirations to acquire several Russia's banks. He noted, however, that the applications for the purchase of those banks had not yet been submitted to the central bank either in Lithuania or in Russia.
Respublika, Lietuvos Zinios

Ekranas turns off glass melting furnace
Lithuania's struggling TV tube manufacturer Ekranas on Thursday stopped the production of glass panels due to a technical failure of its glass melting furnace.
Ekranas said that, according to preliminary estimates, it would take about two months to repair the furnace. The company added that it had sufficient spare glass components to continue assembling TV tubes. Ekranas was insured against breakdowns and business disorders in If Draudimas.
Lietuvos Zinios, Lietuvos Rytas

Turnover by customers of finance intermediaries surges 78 percent
The securities turnover of customers of Lithuania-based brokerage houses and securities units of commercial banks totalled LTL 10.334 billion on domestic and foreign markets in 2005, a surge of 77.6 percent or LTL 4.5 billion versus the year earlier figure, the Securities Commission reported. The growth on domestic market mostly resulted on the increase in trade in corporate debt securities and shares. Lietuvos Zinios

Friday, 17th of March

Lithuanian insurers incur LTL 40 million losses from compulsory auto insurance
Lithuanian insurance companies incurred losses of at least LTL 40 million from compulsory motor third-party liability insurance last year, according to preliminary data.
The situation in the compulsory auto insurance market had not improved compared with 2004, when insurers' losses from this activity stood at around LTL 45 million. The rising number of claims, particularly those for accidents abroad, remains the primary reason for the losses.
Lietuvos Draudimas, the country's biggest non-life insurer, predicts that the domestic compulsory auto insurance market will grow by about ten percent to approximately LTL 263 million this year, with the average price for this type of insurance expected to rise by around 14 percent to LTL 240.
Market growth will be driven this year by increased insurance premiums for certain customer segments and a rise in the number of cars in the country.
Lietuvos Zinios, Verslo Zinios

Norfa retailer launches expansion in Latvia and Russia
Norfos Mazmena, the owner of the third-biggest grocery chain in Lithuania, is launching its expansion in Latvia and Russia, and mulls possible entry into the markets of Estonia and Ukraine in future. The owners of Norfa chain have acquired a 15,000-m2 land lot in Daugpilis, Latvia. The design works of the first Nofra's retail centre in Latvia have already been launched. The outlet might be opened in summer.
Earlier this year, the owners of Norfa acquired land lots in Yegoryevsk and Kolomna, the Moscow region. The company is currently negotiating the purchase of land in Ryazan.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

CBA Aibe, Palink, Invalda, Hanner win awards for Latvian operations
The Lithuanian Embassy and the Lithuanian Chamber of Commerce in Latvia will present Merkurijus 2005 awards to 23 Lithuanian companies for their successful operations in the neighbouring country. CBA Aibe and Palink have won the awards as the most successful companies in the retail industry. In the real estate and construction industry, the awards will go to Hanner Properties, Constructus, Viadukts, Girteka and Invalda. The Merkurijus 2005 awards will be also presented to Acme and HNIT-Baltic in the IT industry; SBA Mebeles and Lonas Latvija in the furniture industry; and the Druskininkai Information Centre and Europa Group in the tourism industry.
Special prizes will be awarded to the VP Market retailer, the Alfa Centrs advertising agency, and the Bite Latvia mobile phone operator.
Lietuvos Rytas, Respublika, Verslo Zinios

Thursday, 16th of March

DHL Lietuva lifts revenue to LTL 47.4 million
Lithuanian express delivery and logistics company DHL Lietuva posted revenue of LTL 47.4 million for 2005, a rise of 47.7 percent from LTL 32.1 million in 2004. The company said in a statement that it handled over 220,000 shipments in 2005.
"We managed to capitalize on Lithuania's growing economy and offered perhaps the widest range of logistics services to the market. Last year growth was particularly strong in cargo transportation by land and sea," DHL Lietuva CEO Mindaugas Utkevicius said.
Lietuvos Rytas

Hermis Capital to invest LTL 300 in Ukraine
Hermis Capital, one of Lithuania's biggest investment companies, is considering investing around LTL 300 million in various projects in Ukraine, where it opened a representative office last summer.
"We are interested in those sectors where we have some experience, but we may modify our plans in view of the Ukrainian market potential and the unique specialization of certain business areas," Hermis Capital director Darius Janulevicius said.
In 2005, Hermis Capital invested LTL 30 million in Lithuania and LTL 124.7 million abroad. Total revenues of Hermis Capital-controlled companies reached LTL 1.12 billion last year.
Verslo Zinios, Lietuvos Zinios

Reval Hotels chain owner buys Takioji Neris hotel
Norway's real estate company Linstow, the owner of Baltic Reval Hotels chain, intend to buy the Kaunas hotel Takioji Neris, which will be closed down for reconstruction in October. Takioji Neris, which will be renamed Reval Hotel Neris, will undergo major reconstruction until May 2007. Financial details of the transaction have not been disclosed.
"A major hotel stands almost no chances to survive without being a member of a chain, that is why it has been decided to sell the hotel," Sigitas Godelis, Takioji Neris CEO, board member and co-owner, said.
The transaction had not been closed as yet, he added.
With the reconstruction complete, Reval Hotel Neris will offer 190 rooms, a new restaurant and bar, as well as a modern conference centre.
In Lithuania, Reval Hotels owns a four-star Vilnius hotel Reval Hotel Lietuva.
Lietuvos Rytas, Kauno Diena

Wednesday, 15th of March

Assets of 23 Lithuanian pension funds reach LTL 344.9 million
Lithuanian second-pillar pension funds held total assets worth LTL 344.9 million as of late January, LTL 7.5 million or 2.2 percent higher than a month earlier. The total number of people taking part in the second-pillar pension schemes reached 539,600 by the end of January, a rise of two percent month-on-month.
The Social Security Fund Board (Sodra) transferred a total of LTL 314.1 million to the second- pillar pension funds by the end of January. As of late January, 19 percent, or LTL 67.3 million, of the second-pillar pension fund assets were invested in Lithuania.
Verslo Zinios, Lietuvos Rytas

Fima to install security system for spent fuel repository at nuclear plant
Fima, Lithuania's private equity engineering solutions developer, has teamed up with Germany's RWE Nukem, the builder of repository for spent nuclear fuel at the Ignalina Nuclear Power Plant (INPP), to install a security system for the territory and facilities at a cost of EUR 3.5 million. Alongside regular systems, Fima will also arrange special-purpose control tools, including special fences, barriers and radiation level meters.
"We will adapt a modern vehicle barrier system, which has not yet been used in Lithuania, for the power plant. The system will be capable of preventing the unauthorized entry of any vehicles and rail transport," Arturas Suliauskas, project department director of Fima, said.
Lietuvos Rytas

Lietuvos Energija will pay dividends
Lithuania's state-run power transmission company Lietuvos Energija intends to pay a dividend of LTL 1.17 per share for 2005 and has earmarked LTL 8.1 million for this purpose. The company reported a net profit of LTL 10.1 million for the year. The total distributable profit will be higher than LTL 10.1 million, but the exact amount has not been disclosed yet.
The power transmission grid operator posted a net profit of LTL 111.3 million for 2004 and paid a dividend of LTL 1.75 per share, or LTL 12.088 million in total. The company allocated LTL 65.003 million of the 2004 profit for investment, primarily into the Estlink underwater cable project, in which it is a partner.
Verslo Zinios

Tuesday, 14th of March

Exports grow 19.9 percent, imports up 31.2 percent
Lithuanian exports grew by 19.9 percent to LTL 2.705 billion in January from a year earlier figure, while imports rose by 31.2 percent to reach LTL 3.382 billion, the Statistics Department reported citing preliminary data based on customs declarations and Intrastat reports. The foreign trade deficit widened by 2.1 times year-on-year to LTL 676.1 million in the reporting period. In January, France covered 10.4 percent of total Lithuania's exports and outpaced Russia, the largest Lithuania's export partner in 2005. Apart France, the list of key Lithuania's export partners showed Russia with 9.4 percent of total exports in January, followed by Latvia with 9.1 percent and Germany with 8 percent. Russia, meanwhile, topped the import rankings, accounting for 30.2 percent of total imports. Also on the list of major import partners was Germany with 13.1 percent, Poland with 8.3 percent, and Latvia with 4.1 percent. The EU accounted for 67.6 percent of Lithuania's total exports and 55.7 percent of total imports. The CIS accounted for 25 percent of exports and 32.9 percent of imports.
Lietuvos Zinios, Respublika, Verslo Zinios

Sugar production quota declines in Lithuania
Lithuania's quota of sugar output is expected to shrink by 6.7 percent, year-on-year, to 94,161 tons in 2006. The sugar output quota for Lithuania will be reduced within the framework of the European Union (EU) sugar report, the European Commission (EC) Representation in Lithuania has reported. In October 2005, the Commission cut Lithuania's quota for the output of sugar in 2005 by 2.6 percent, to 100,290 tons.
Sugar sales on domestic market came in at 6,700 tons in the first two months of 2006, a rise of 1.5 percent from the year-earlier figure. Exports plunged by 2.5 times, year-on-year, to 10,700 tons. Last year total sales on domestic market expanded by 31.4 percent versus 2004, to reach 60,200 tons. Exports rose by 8.1 percent, to 120,000 tons. Lithuania's sugar mills produced 124,700 tons of sugar from the sugar beet harvest of 2005, a decline of 6.1 percent from the year-earlier.
Verslo Zinios

Lithuania's Alio publisher enters Latvia's market with classifieds magazine Autorinka
Lithuania's Alio, the publisher of classified ads newspapers and an ads magazine, has entered Latvia's market with the periodical Autorinka, specialized ads magazine targeting car buyers.
"We have already seen proofs that we have made a right decision and our expansion justified itself. Until now, the supply of cars from Lithuania has been scarce in Latvia," Vaidas Arvasevicius, Alio CEO, said.
The prices of second-hand cars in the neighbouring country exceeded respective prices in Lithuania, which prompted the Latvians to search for a car across the border in numerous cases, he noted adding that the new magazine was a useful tool to alleviate the search.
Verslo Zinios

Monday, 13th of March

Government approaches Yukos over sale of controlling interest in Mazeikiu Nafta
Lithuania's government has approached Russia's oil company Yukos over the purchase of controlling interest in Mazeikiu Nafta and the rights set out in the agreements of 2002, Prime Minister Algirdas Brazauskas has confirmed. He refused to specify the method to be applied for the purchase and subsequent sale of shares. He noted, however, that all processes would be "transparent and clean".
Government leader told the Parliament that the new investor into Mazeikiu Nafta would acquire 75 percent stake, which will include some shares currently controlled by the government. The price offered by the government for the 53.7 percent stake and the investor it would sell the shares are not disclosed.
However, Brazauskas admitted that the LTL 3 billion borrowing ceiling imposed by the Parliament for the purpose might result in a shortage of funds for the transaction. Brazauskas refused to name the prospective buyer, which the government had opened talks with. He said, however, that Russia's oil giant Lukoil was not on the list.
The government expects to rake in up to LTL 1 billion from the sale of approximately 21 percent of Mazeikiu Nafta.
Lietuvos Rytas, Lietuvos Zinios

Lithuania to apply for early evaluation of its euro readiness coming week
Lithuania will next week ask the European Commission (EC) and the European Central Bank (ECB) to make an early assessment of its readiness to adopt euro in January 2007. Reinoldijus Sarkinas, the Bank of Lithuania governor, was authorized to sign a respective application on Friday. The request would be submitted on coming week.
The board of the central bank also backed the proposal of the Government to address the Commission and ECB over the early evaluation of Lithuania's compliance with prescribed criteria and its outlook for the introduction of euro on January 1, 2007.
The evaluation is mandatory as Lithuania seeks to become a full-fledged euro zone member on January 1, 2007.
Lietuvos Zinios, Respublika

Cheese maker to receive EU funds
One of the most modern Lithuanian cheese producers Vilkyskiu Pienine expects to receive LTL 3.45 million assistance from EU structural funds. The producers plan to use the funds for modernisation of cheese production technologies and implementation of a new whey processing project.

Previous weeks:

Back to Baltic Business Monitor
Archives 2003-

 TERMS & CONDITIONS / KÄYTTÖOIKEUDET. © Oy Compiler Ab. All rights reserved.