Observer "Lietuva"

Lithuania Business News: Archive 2003-2006

WEEK30.2006

Saturday, 29th of July

Lithuania's GDP grows by annual 8.2 percent
Lithuania's gross domestic product (GDP) grew by 8.2 percent in the first half of 2006 from a year earlier to LTL 37.311 billion, the Statistics Department reported. GDP rose by 7.7 percent in the second quarter of this year from a year earlier to LTL 20.281 billion, compared with an 8.8 percent growth rate in the first quarter.
Lietuvos Rytas, Respublika

Lithuania's retail sales up 14.8 percent
Lithuanian retail sales grew by 14.8 percent in comparative prices in the first half of 2006 from a year earlier, to reach LTL 12.1 billion, ex value-added tax (VAT). Food retailers boosted their aggregate turnover for the reporting period by 6.2 percent, while non-food retailers, excluding motor sales, posted a 9.2 percent rise. The aggregate turnover of restaurants, bars and other catering establishments increased by 3.7 percent year-on-year to LTL 369.6 million, ex VAT, in the reporting period. Lietuvos Zinios, Respublika

N-plant starts shutting down for 2-month maintenance
Lithuania's Ignalina Nuclear Power Plant (INPP) started shutting down its only operating reactor for a two-month maintenance period on Friday. The maintenance shutdown of the second unit at the Ignalina plant is scheduled to begin on July 29 and be completed on September 26. The reactor is planned to reach its full capacity on October 5.
Viktor Shevaldin, the plant's managing director, said it was possible that the maintenance would be completed sooner than planned.
Lietuvos Energija, the state-run power transmission company, has said that it would import around 1.19 billion kilowatt-hours (kWh) of electricity from Russia to meet the country's needs in August-September. Another 190 million kWh will be produced by local power plants.
Lietuvos Zinios

Friday, 28th of July

Apranga boosts H1 profit
Apranga, Lithuania's leading clothing retailer with operations in all three Baltic countries, posted a preliminary pretax profit of LTL 6.2 million for the first half of this year, up from LTL 2.35 million a year earlier. The group's sales for January-June soared by 43 percent year-on-year to LTL 101.7 million. Apranga currently operates 54 stores in the three Baltic countries. 24 news stores are to be opened in the three Baltic States by the end of this year. SEB Vilniaus Bankas will issue a 2-year LTL 60 million loan for the expansion.
Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas

Aggregate profit of commercial banks surge 81 percent
Lithuania's commercial banks and foreign banks branches posted an aggregate profit of LTL 318 million for the first half of 2006, a surge of 80.8 percent from the year-earlier figure of LTL 175.9 million. All Lithuania's banks except for the Lithuanian branch of Nordea Bank Finland reported a profit for the January-to-June period.
As of July 1, the aggregate assets of commercial banks totalled LTL 51.4 billion, a surge of 53 percent year-on-year. The aggregate loan portfolio expanded by 59.71 percent, to LTL 31.574 billion, including LTL 11.402 billion in retail loans, which soared by 87.4 percent in the reporting period. The aggregate amount of deposits and letters of credit (L/C) grew by 30.3 percent, to LTL 26.971 billion, including LTL 15.077 billion in retail deposits, which expanded by 32.5 percent over the period. Lietuvos Zinios, Verslo Zinios, Respublika

Pretax earnings of Klasco plunge 44 percent
Klaipedos Juru Kroviniu Kompanija (Klasco), the largest stevedoring company in the Lithuanian port of Klaipeda, posted LTL 2.1 million in pretax earnings for the first half of 2006, a plunge of 44.4 percent versus the year-earlier figure of LTL 3.85 million. Excluding the results of container terminal activities divested in December 2005, the profit figure remained unchanged in the comparative period.
The company's sales, meanwhile, rose by 1.9 percent, to LTL 60.39 million, from LTL 59.23 million in the first half of 2005.
The interim performance figures could have been better but for changes in cargo flow, said Valentinas Greiciunas, Klasco CEO. The handling of frozen products plunged by one-third due to delays in talks between buyers and sellers, he added.
Verslo Zinios, Lietuvos Zinios

Thursday, 27th of July

Lithuanian insurance market surges by one-fourth
The Lithuanian insurance market grew by 24.9 percent in the first half of 2006 from a year earlier, to reach LTL 667.3 million. The non-life insurance market increased by 22 percent year-on-year to LTL 499.4 million, accounting for 74.8 percent of total premiums written. The life insurance market soared by 34.6 percent to LTL 167.9 million, or 25.2 percent of the total.
A total of 2.1 million insurance contracts were concluded during the six-month period, up by 10.5 percent year-on-year. The number of life insurance contracts reached 24,500, of which 17,300 were investment insurance contracts.
Kauno Diena, Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

Ukraine's Roshen buys Klaipeda pastry maker
Roshen, the largest Ukraine's confectionery company, has acquired Klaipedos Konditerija, the pastry maker based in the third largest Lithuania's city, from the investment house Invalda. The agreement to sell 100 percent of Klaipedos Konditerija was concluded in May. Financial details have not been disclosed.
"The confectionery business does not constitute a priority area for Invalda, that is why we have sold that business to suitable investors under favourable terms," Alvydas Banys, Invalda chairman, said.
The company produces up to 10 tons of confectionery products per day. About one-third of output is channelled to Latvia, Russia, Germany, Switzerland and the US.
Verslo Zinios, Respublika, Lietuvos Rytas

Sanitas doubles half-year profit to LTL 5.615 million
Sanitas, which owns pharmaceutical plants in Lithuania, Poland and Slovakia, reported preliminary consolidated net profits of LTL 5.615 million for the first half of this year, almost twice as high as a year earlier. Sales for January-June nearly trebled to reach LTL 46.164 million. Sanitas projects LTL 221 million sales and LTL 13.9 million net profit this year. The company expects that EBIDTA will amount to LTL 53.2 million for the full 2006. Sanitas plans to invest into new products and export development this year.
Verslo Zinios

Wednesday, 26th of July

Russia's decision to raise export tariffs on petroleum products might benefit Mazeikiu Nafta
Russia's decision to raise export tariffs on petroleum products to new record level may benefit Lithuania's Mazeikiu Nafta, since the supply of Russia's crude to the sole Baltic oil refining and transportation complex may increase. The decision to raise export rates on petroleum products might prompt Russia's businessmen to boost exports of crude, said Saulius Vorauskas, a government representative at Mazeikiu Nafta.
"The rise in crude exports might be expected since it would be more advantageous to leave Russia-made petroleum products in Russia," Vorauskas said.
The market should respond to those changes in two or three months, Vorauskas suggested.
"By importing 100,000 tons of crude by sea in July Mazeikiu Nafta have issued a signal to the market that it do have alternative routes of supply," he added.
Mazeikiu Nafta should receive 1.8 million tons of crude by pipelines for refining in the third quarter of 2006, i.e. 600,000 tons per month.
Lietuvos Rytas, Lietuvos Zinios, Kauno Diena

Vilniaus Vingis offloads last subsidiary
Vilniaus Vingis, the deflection yoke producer controlled by investment company Hermis Capital, has sold 100 percent of Vilniaus Vingio Gija, its last subsidiary. A month ago Vilniaus Vingis divested 100 percent of another subsidiary, Vilniaus Vingis Mechanika. The value of transactions and buyers are not disclosed.
Nerijus Dagilis, board chairman of Vilniaus Vingis, says that upon selling the companies and a building complex, the company is to optimise activities focusing on the production and sales of electronic components.
Verslo Zinios, Respublika

Budget revenues 4.4 percent above target
Lithuania's national budget revenues reached LTL 8.083 billion in the first half of 2006, LTL 342 million or 4.4 percent above the target. Revenues, including the European Union funds that made up LTL 1.324 billion, came in at LTL 9.407 billion in the reporting period. The national budget revenues are projected to reach LTL 18.933 billion this year. The figure includes LTL 3.326 billion in EU support. Lietuvos Rytas, Verslo Zinios

Tuesday, 25th of July

Japan interested in Lithuanian nuclear plant project
Lithuania is looking to attract Japanese investment in its high-technology industry, including a project to build a new nuclear power plant. Gediminas Rainys, undersecretary of the Economy Ministry, on Monday told Kouki Chuma, the Japanese state minister responsible for administrative, structural and regional reforms, that the new nuclear power plant project was one of Lithuania's priorities. Chuma, on a visit to Vilnius, said that this project was very interesting for Japan.
"Nuclear energy will be very important in the future, and that is why the Japanese are following every nuclear energy project," he was quoted as saying in the ministry's statement. Lithuania's new energy strategy aims to have a new nuclear power plant operational in 2015-2017.
Lietuvos Ryta

Norfa retailer to sell 36 stores to raise funds for investments
The owners of Norfa Group, the operator of the leading Lithuania's grocery chain, have decided to sell 36 trade centres, which until now have been managed by Rivona, a member of the group active in the logistics, international conveyance and real estate rent business. The receipts on the sale would be channelled into the expansion of the chain in Latvia, Russia and Ukraine, said Dainius Dundulis, chairman of Norfos Mazmena, the owner of the chain. Five international investment funds are vying to acquire the real estate with the overall area in excess of 75,000 m2. Rivona is advised by KOBA, an independent commercial real estate consultancy.
Currently the Lithuanian chain of Norfa covers 114 trade centres.
Respublika, Verslo Zinios

Vilniaus distillery boosts profit to LTL 3.4 million
Lithuanian alcoholic beverage producer Vilniaus Degtine, which is controlled by the French group Belvedere, said its net profit for the first half of this year soared to LTL 3.403 million, up from LTL 673,400 a year earlier. The Vilnius-based company reported on Monday that first-half sales rose to LTL 29.606 million, up from LTL 17 million in the same period a year ago. Solely in June the company sold 977,000 litres of alcoholic beverages at LTL 5.5 million, a rise of 1.5 times since June 2005.
Verslo Zinios

Monday, 24th of July

Consolidated earnings of Alita surge 47 percent
Lithuanian alcoholic beverage producer Alita posted a consolidated net profit of LTL 4.5 million for the first half of 2006, a surge of 47 percent versus the year-earlier figure. The consolidated turnover rose by 14 percent, to LTL 58.4 million. Consolidated sales rose by 21.5 percent, to LTL 136.5 million last year. The exports of Alita grew 64 percent to LTL 1.9 million in the first half of the year. The exports of cider soared most of all – by 19.6 times.
Respublika

Fitch affirms ratings of Mazeikiu Nafta
Fitch Ratings, the international rating agency, has maintained the Issue Default rating of Mazeikiu Nafta, the sole Baltic oil refining and transportation complex, at B+ on Rating Watch Positive. The short-term rating of B has been affirmed. The positive rating reflects the pending change of ownership of the oil complex, as a result of Polish oil refining and marketing company PKN Orlen (BBB'on Rating Watch Negative) agreement with Yukos International UK BV, the current operator of Mazeikiu Nafta, to acquire its 53.7 percent stake in the company for USD 2 billion, Fitch said.
In addition, PKN will purchase a 30.66 percent stake in Mazeikiu Nafta from the Lithuanian government for USD million US.
Lietuvos Zinios, Verslo Zinios

LAL sells subsidiary
Finansu Spektro Investicija has purchased Baltic Ground Services (BGS), ground handling service provider in Vilnius and Kaunas airport, from LAL Investiciju Valdymas. LAL Investiciju Valdymas sold the company seeking to concentrate on other activities. The market of ground handling services in the Vilnius International Airport is estimated at LTL 21-22 million. BGS receives 25-30 percent of the said sum. BGS posted a turnover of LTL 3.5 million over the first half of this year.
Verslo Zinios

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