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Lithuania Business News: Archive 2003-2006

WEEK 38.2006

Saturday, 23rd of September

Warning
The European Commission warned the new EU countries, Lithuania including, to assimilate funds allocated by EU faster otherwise they might lose unassimilated funds from the year 2007 budget.
If the funds allocated from Structural Funds are not used in two years, the funding will be automatically ceased. Relying on EU data, the new EU members have assimilated 19.3- 34.1 percent of the money received from the European Union.
Respublika

Electricity bridge project
Representatives of Lithuania and Poland met in Warsaw, Poland, on September 22 to discuss the electricity bridge project.
Last week it was declared that Lithuania and Poland will most likely sign a political agreement on the launch of a project to connect the two countries' energy grids in Warsaw on September 29. However, these plans can be ruined by the political havoc in Poland: the governing coalition of the neighbouring country ruined on Friday.
Respublika

Growth of industrial output
Lithuanian industrial output and sales grew by 11.7 percent in the first eight months of 2006 compared with the year-earlier figure, the country's Statistics Department reported.
Respublika

Friday, 22nd of September

Sanitas incurs losses
Sanitas, which owns pharmaceutical plants in Lithuania, Poland and Slovakia, posted approximately LTL 4.1 million in losses for the first eight months of 2006.
In August alone, the losses came in at LTL 361,530, the Kaunas-based company reported to the Vilnius Stock Exchange (VSE).
Sanitas group reported LTL 4.669 million in profit for the first eight months of 2005, and LTL 1.575 million for August alone.
Lietuvos Zinios

Insurance market continues growing
The Insurance Supervision Commission (ISC) has stated that the insurance market is growing. In a press conference on Thursday, Lithuania's biggest non-life insurer Lietuvos Draudimas (Lithuanian Insurance) forecasted at least 20 percent growth for the country's personal non-life insurance market this year.
Based on ISC data, the non-life insurance market increased by 28.7 percent, to LTL 660.305 million in January-August 2006. The property insurance market escalated by 34.8 percent, to LTL 46 million, over the given period.
Lietuvos Zinios

Revenues of Lithuania’s companies grow
Lithuania's companies received LTL 36 billion in revenues for the second quarter of 2006, a surge of 26 percent versus the year-earlier figure, the country's Statistics Department reported.
The biggest increase in revenues was recorded among business (43 percent), construction (32 percent) and transport sectors (31 percent).
The Statistics Department reported that the pre-tax earnings of Lithuania’s companies in the second quarter of the year amounted to nearly LTL 3 billion.
Respublika, Lietuvos Rytas, Verslo Zinios

Thursday, 21st of September

Ukio Bankas sets representative office in Kazakhstan
Lithuania's fast-growing bank Ukio Bankas has opened a representative office in the Kazakh city of Alma-Ata.
It is the bank's third representative office in a foreign country, following those in the Ukrainian and Russian capitals.
"Kazakh businesspeople and industrialists have taken an active interest in financial possibilities offered by Lithuanian banks," Ukio Bankas chairwoman Edita Karpaviciene said.
Lietuvos Zinios, Respublika, Verslo Zinios, Lietuvos Rytas

Unemployment levels shrinks
The unemployment level in Lithuania fell to 5.6 percent in the second quarter of this year from 8.5 percent a year earlier, a labour force survey by the Statistics Department showed.
The number of unemployed declined by 48,000 or 35.1 percent, year-on-year, to 88,700 in April-June.
The largest number of jobless - 277,800 - was registered in the labour force survey report for the second quarter of 2001.
Kauno Diena, Respublika, Verslo Zinios, Lietuvos Rytas

Axis Industry won LTL 1.1 million order
Axis Industries, Lithuania's industry and energy project developer that is part of Rubicon Group, has won a LTL 1.1 million order to install a bio-fuel boiler at the plant of West-Siberian Industrial Company in Tiumen, Russia.
The project location is the most remote in Axis Industries' history, the company has said.
Lietuvos Rytas, Lietuvos Zinios

Wednesday, 20th of September

Vilniaus Vingis projects losses
Lithuania's struggling TV deflection yoke manufacturer Vilniaus Vingis is projecting losses of LTL 18 million for the full year 2006.
Annual sales are expected to fall to some LTL 48 million, according to the company's revised performance forecasts released on Tuesday.
Neringa Menciuniene, CEO of Vilniaus Vingis, says the revised performance forecasts are realistic and does not include the two companies that Vilniaus Vingis had sold earlier. She does not rule out a possibility that Vilniaus Vingis will sell all of its real estate and will not receive any income from rent this year.
Lietuvos Zinios, Respublika

VP Market is to open 30th trade centre in Estonia
The biggest retail trade chain in the Baltic countries VP Market is to open the 30th trade centre in Estonia on Thursday.
VP Market is going to open a 500 square metre trade centre in Tallinn.
At present, the trade chain controls 346 stores, 195 of them are located in Lithuania, 103 in Latvia, 29 in Estonia, 11 in Bulgaria and 8 in Romania.
Kauno Diena

Eesti Energia interested in RST
The Estonian state energy company Eesti Energia would participate in a tender for privatisation of a Lithuanian energy company Rytu Skirstomieji Tinklai (Eastern Distribution Network or RST) if the Government of Lithuania resolved to sell them.
Harri Mikkas, head of the Law Department at Eesti Energia, expresses hope that this time the tender and its conditions will be transparent.
Lithuania’s minister of economy Vytas Navickas has announced that the study of RST privatisation possibilities will be prepared. Its results will precondition Government’s decision on sale of the energy company.
Lietuvos Rytas

Lukoil Baltija boosts turnover
The 6-month turnover of the gas station operator UAB Lukoil Baltija amounted to LTL 772.3 million, a 15.6 percent rise year-on-year. The company paid LTL 101.43 million taxes to the state budget over the given period. Ivanas Paleicikas, CEO of Lukoil Baltija, says investments in service quality have brought dividends very soon.
In the first half-year of 2006 the company’s investments increased by 80 percent, to LTL 21.1 million, compared to the relevant period last year.
On June 1, Lukoil Baltija and the retail trade chain operator UAB VP Market, joined their discount card systems.
Verslo Zinios, Respublika

Tuesday, 19th of September

PZU will not withdraw from Lithuania
Poland's insurance giant PZU does not intend to divest its Lithuanian insurance operations. Last week in PZU SA Board meeting in Poland it was decided to raise the authorised capital of UAB DK PZU Lietuva to LTL 30 million by the end of 2006.
PZU Lietuva plans profit no earlier than in 2007.
In the first quarter of 2006 PZU Lietuva suffered LTL 12 million loss. The deputy director of PZU Lietuva Gintautas Mazeika attributed losses to historical mistakes of the company, when LTL 6.9 million of insurance payments had to be written off because of inappropriate IT system chosen for the insurance payment administration.
PZU Lietuva CEO Zenon Olbrys declared that it would be unprofessional to sell the insurance company that controls a 15 percent market share. He did not deny the rumours about his possible resignation.
Respublika, Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Akmenes Cementas posts profit
Akmenes Cementas, Lithuania's only cement manufacturer, posted LTL 109.353 million in sales for the first eight months of 2006, a surge of 43.5 percent from the year-earlier figure of LTL 76.226 million.
In August alone, the sales soared by 73.8 percent, to LTL 21.578 million, from LTL12.417 million in August 2005.
Lietuvos Zinios, Lietuvos Rytas

Leap in Stumbras’ sales
Lithuania's largest alcoholic beverage producer Stumbras reported sales of LTL 68.63 million for the first eight months of this year, a rise of 14.4 percent from the year earlier figure of LTL 59.976 million.
Exports soared by 67 percent, to LTL 3.951 million in the reporting period.
Ceslovas Matulevicius, Stumbras' CEO, says growth of Stumbras’ turnover has been preconditioned by popularity of new beverages launched in the market in summer.
Lietuvos Rytas

Fitch changed Snoras’ ratings
Snoras bank controlled by the Russian Konversbank has acquired a British bank Pointon York (currently Conversbank UK) this year. In fact, the British bank has been purchased by Vladimiras Antonovas, owner of the control block of shares in Snoras.
The international rating agency Fitch Ratings reported that the indices of Pointon York and Snoras are not consolidated therefore Snoras does not assume any risk and does not receive any income related to the British bank. According to the agency, usage of Snoras for implantation of Konversbank’s development strategy causes strategic risk and raises doubt about business management.
Fitch Ratings has changed the ratings outlook for Snoras bank to Negative from Stable, reflecting the declining capital adequacy of the bank.
Lietuvos Rytas, Verslo Zinios

Monday, 18th of September

New trade centre association
The biggest trade centres of Lithuania have united in a new association established by AB Baltic Shopping Centers, UAB SSPC and Baltic Red. The main goal of the new association is to solve real estate, trade centre development and other problems.
Respublika

Street railways in Vilnius
On September 14 Vilnius municipal company Susisiekimo Paslaugos (Communication Services) established a branch Vilniaus Tramvajus (Vilnius Tram). Its goal is to carry out a detailed study and find investors for the street-railway construction. It is planned to begin the construction of street-railways next year already. Transport specialists do not approve of this decision and claim that there are cheaper alternatives, e.g. streetcar shuttles.
Lietuvos Zinios

Sanitex does not renounce plans to sell food products online
The wholesaler UAB Sanitex planned to launch trade in food products in its e-store this year but has postponed the plans for one year because of intensive preparations for Christmas trade.
Simona Balciuviene, director of the Electronic Commerce Department at Sanitex, says the company has been providing business-to-business service since 2002 and has already accumulated e-trade experience. It is planned to launch trade in food products and expand trade of industrial goods online. She remarks that in e-shops Sanitex offers lower prices than in trade centres.
E-trade is one of the possible sectors of development of AG Group, the operator of Topo Centras trade centres.
Verslo Zinios

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