Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 12.2007

Saturday, 24th of March

Lithuania not to privatize RST
The Lithuanian government will not privatize the power distribution grid operator Rytu Skirstomieji Tinklai (RST) now that it has decided to merge three state and privately owned energy companies into a single company that will implement three key energy projects. The government has drafted a law on a new nuclear power plant, which provides for merging the state-controlled RST and the privately owned power distribution company VST with the state-run power transmission company Lietuvos Energija. VST is currently controlled by NDX Energija, a company owned by shareholders of Maxima, the largest retailer in the Baltics.
The government will have at least 51 percent of shares in the merged company, which will carry out projects for the construction of a new nuclear power plant in Lithuania and power grid connection projects with Poland and Sweden.
The decision to merge the three companies into one was "unique" and the three energy projects would require around LTL 8.5 billion in investments from Lithuania alone.
Lithuania seeks at least 34 percent of shares in the future nuclear power plant, which will be located on its territory. Its partners in the project, Latvia, Estonia and Poland, would each hold 22 percent of shares. Lithuania's national energy strategy calls for building a new nuclear power facility by 2015 and connecting the country's power grid to those of Poland and Sweden by 2013.
Lietuvos Zinios, Respublika

ATMs did not operate
ATMs of one of the biggest Lithuania’s banks Hansabankas did not operate due to technical problems yesterday. Zydrone Luksyte, spokeswoman of Hansabankas, confirmed that the operations of Hansabankas ATMs were disrupted due to the failure of internal communication. ATMs were down due to the troubled internet connection of Teo LT from 12 a.m. to 1 p.m. Teo LT internet connection broke down on Thursday in entire Lithuania.
Lietuvos Rytas, Respublika, Lietuvos Zinios

British learned to pronounce Svyturys
Lithuanian businesspeople received attention in one of the biggest UK’s international food and drink trade event IFE 2007. Svyturys-Utenos Alus, Vesiga and Mantinga introduced their production in the exhibition. The sales of Svyturys-Utenos Alus grew 2.5 times in Great Britain and nearly 5 times in Ireland over 2006. British are fond of Svyturys Ekstra beer. Mantinga has been selling bread and pie production in the Middle England for 4-5 years.
Lietuvos Rytas

Friday, 23rd of March

SEB Vilniaus Bankas to issue up to LTL 1 billion in bonds
SEB Vilniaus Bankas has dra Color wn up a LTL 1 billion worth bond program, the basic prospectus of which was approved by the Securities Commission on Thursday, March 22. In accordance with the program the bank might offer various types of debt securities, with the timing and size of issues to be decided by the bank itself.
According to the par value of outstanding bonds registered with the Central Securities Depository of Lithuania, SEB Vilniaus Bankas held 54 percent of respective market.
Lietuvos Zinios

Brokerages earn LTL 30.7 million
Lithuania's brokerages reported LTL 30.7 million in aggregate unaudited net earnings for full 2006, a surge of 1.6 times from the audited year-earlier figure of LTL 19.4 million. The combined net earnings of assets management companies, meanwhile, soared by 4.5 times, to LTL 16.2 million, from LTL 3.6 million in 2006.
Finasta and Finbaltus, the A category brokerages, raised their combined net earnings by 1.6 times, year-on-year, to LTL 30 million, while the B category broker houses posted LTL 1.3 million in aggregate losses, and the C category brokerages reported LTL 2 million in combined net profit for the full year.
The revenues of broker houses on mediation on the securities market and customer services stood at LTL 17.6 million last year, while the costs on those activities ran at LTL 7.4 million.
Verslo Zinios

Lithuanian vessels catch 18 percent more fish in 2006
Lithuanian companies caught 15,400 tons of fish of different species in the Baltic Sea last year, a rise of 18 percent from 13,100 tons the previous year. Last year's catch mostly consisted of cod (3,200 tons), Baltic sprat (10,800 tons), Baltic herring (1,100 tons) and plaice (340 tons).
Some 102 companies fishing in coastal waters landed 389.5 tons of fish into ports in 2006, down 5.6 percent from 412.4 tons in 2005. Cod (137 tons), smelt (134.7 tons), Baltic herring (56.3 tons), plaice (34.5 tons) and turbot (8.7 tons) made up most of the catch.
The total catch from the Curonian Lagoon declined by 5.3 percent to 1,100 tons last year, from 1,200 tons the previous year. Seven Lithuanian vessels caught 65,100 tons of fish, mostly horse mackerel, anchovy and mackerel, in the Mauritanian exclusive economic zone, down 15.3 percent year-on-year.
Verslo Zinios

Thursday, 22nd of March

Hansabankas to invest over LTL 100 million in new headquarters
Hansabankas, one of the largest banks in Lithuania, plans to invest over LTL 100 million in a new central office building to be constructed in the centre of Vilnius. Hansabankas Chairman Giedrius Dusevicius said Wednesday that the final estimated cost of the project would be known in a month or two. The bank is currently in the process of selecting a general contractor. The new building will be located on a 13,400-square-meter plot of land in the city's most rapidly developing area on the right bank of the Neris River. Construction on the building is scheduled to begin in early summer and be completed in 2009. Contestus has been chosen as the project management company.
Kauno Diena

Rokiskio Suris proposes LTL 2.36 dividend
Rokiskio Suris, one of the largest dairy groups in Lithuania, intends to pay a dividend of LTL 2.36 per share to shareholders for 2006. The proposed dividend is unchanged from the LTL 2.36 per share dividend paid for 2005. The company distributed a total of LTL 10.3 million in dividends last year. The dairy group earlier reported a 38 percent drop to LTL 13.082 million in consolidated net profits for 2006. Revenues went up by 9.4 percent to LTL 517.67 million.
Verslo Zinios

Lithuania setting up first compressed natural gas filling station network
Lithuania will open five filling stations offering compressed natural gas, the alternative motor fuel that has not been used in Lithuania until now, by the end of 2007. The filling stations to be based in Lithuania's cities will be built by the local company Autoideja, which aims to set up a chain of 25 alternative fuel stations by 2010. Car trader Autobrava aims to offer the first Fiat cars running on both compressed natural gas and gasoline in Lithuania in April. Until now the majority of Lithuania's filling stations have only traded in liquefied petroleum gas (LPG).
Lietuvos Zinios, Verslo Zinios

Wednesday, 21st of March

Svyturys-Utenos raises sales by almost one-fifth
Svyturys-Utenos Alus posted LTL 421 million in revenues for 2006, a rise of 19.1 percent versus the year-earlier figure of LTL 353.5 million. In 2007 the sales of the company should grow by approximately 18 percent, mostly on the back of stronger sales of bottled water, cider and alcopops, Rolandas Virsilas, Svyturys-Utenos Alus CEO projected.
The company sold 176.5 million litres of drinks last year, a rise of 11.4 percent versus the year-earlier figure. Sales on domestic market increased by 13.5 percent, year-on-year, to 168.5 million litres. Beer sales expanded by 7.5 percent, to 133 million litres, while beer sales on local market grew by 7.4 percent, year-on-year, to 129.3 million litres.
The sales of bottled water soared by 36 percent, to 21.2 million litres, from 15.6 million litres in 2005, and surpassed the growth of the overall bottled water market, which expanded by 20 percent over 2006.
Respublika, Lietuvos Rytas, Kauno Diena, Verslo Zinios

Lithuania's parliament rules in favour of natural gas prices regulation
Lithuania's parliament has ruled to regulate the prices of natural gas for large industrial users thus slightly curbing the superprofits of Dujotekana, the natural gas imports company controlled by Russia's gas giant Gazprom. The relevant bill on natural gas has been passed by 68 votes with three abstentions.
Until now the authorities have only restricted the price of natural gas for regulated consumers, while the prices for the so-called large industrial users have not been fixed. Large industrial users acquired natural gas both from Dujotekana and Lietuvos Dujos, the natural gas utility. Although both companies purchase natural gas from Gazprom, the prices charged by Dujotekana on end consumers is way higher compared with Lietuvos Dujos.
In 2006 natural gas supplied by Dujotekana covered 17 percent of national demand, while the markup levied by the company totalled 17 percent. Dujotekana, which only supplies natural gas to large industrial users, earlier announced that its imports of natural gas rose by 2.9 percent, year-on-year, to 532 million cubic meters, last year.
Lietuvos Rytas, Lietuvos Zinios, Kauno Diena, Verslo Zinios

Mazeikiu Nafta, Neo Group seen as potential investors in new N-plant
Lithuanian power distribution grid operators, Rytu Skirstomieji Tinklai (RST) and VST, and large industrial energy consumers, including the oil refinery Mazeikiu Nafta, could invest in a new nuclear power facility that is planned to be built in the country.
"Lietuvos Energija will not be the only investor. RST and VST (may invest) as well. The potential of distribution networks has to be tapped. Mazeikiu Nafta may also contribute to investments - it needs electricity," Anicetas Ignotas, undersecretary of the Economy Ministry, said.
Lithuanian PET resin manufacturer Neo Group could also invest in the future plant. "This company is a large consumer. It needs a capacity of around 20-megawatts, slightly lower than (the fertilizer plant) Achema needs," he said.
Ignotas said Lietuvos Energija, the state-run power transmission company, was in a position to invest a billion euros in the new nuclear power facility.
The official said Lithuania alone could invest around EUR 2 billion in the project.
"Other investors - Estonian, Latvian and Polish - would contribute the remaining funds, about EUR 1.7 billion each," he added.
Based on the latest preliminary estimates, a 3,300-megawatt nuclear power plant would cost approximately EUR 7.1 billion.
Lietuvos Zinios

Tuesday, 20th of March

Cosmetics and toiletries market grows 14 percent
Lithuania's cosmetics and toiletries market grew by 14 percent, year-on-year, to LTL 635.6 million in 2006, Euromonitor International has reported, projecting that the market would expand by further 30 percent in the upcoming five-year period, to reach LTL 838.2 million in 2011. Last year the growth of the market was largely encouraged by innovations, retail expansion, growing household income and a cut of families tax.
Toiletries and hair care products held some 40 percent of the market, i.e. the largest market share last year. The market of hair care products alone totalled LTL 138.5 million in 2006, a surge of 20 percent versus the year-earlier figure. The average annual expenses on cosmetics and toiletries made up LTL 187.6 per capita in Lithuania in 2006.
The top three leaders of Lithuania's cosmetics and toiletries market included Procter&Gamble with an 11.4 percent market share, L'Oreal Groupe with a 11.2 percent share and Avon Products with 8.9 percent of the market. Lithuania's cosmetics producer Biok ranked the 10th with a 1.7 percent share of the market.
Verslo Zinios, Lietuvos Zinios

Profits of companies slightly increased
Aggregate pretax profits of Lithuanian companies soared by 27.8 percent in 2006 from a year earlier, to LTL 9.2 billion as revenues increased by 20.3 percent to LTL 147 billion. The average profit margin, measured as the pretax profit to revenues ratio, edged up to 6.2 percent last year, from 6 percent a year earlier.
The profit margin in the business services, post and telecommunications sectors exceeded 19 percent, while the respective rate in the hotel and restaurant business and the construction sector totalled 9 percent. The profit margin in the transport and energy sector was 7 percent, manufacturing and trade - 4 percent.
The pretax earnings of energy companies soared by 1.7 times over 2006, while the pretax profit of business services providers and construction companies surged by 1.5 times, trade and transport - by 1.4 times.
Lietuvos Zinios, Lietuvos Rytas

Growth of housing prices abated in Lithuania over 2006
The growth of housing prices abated in Lithuania somewhat over 2006 as the annual increase was 39 percent, 13 percentage points below the growth rate in 2005. According to the Centre of Registers, the prices of private houses soared by 46 percent over 2006, while a year earlier the rise was 50 percent. The growth of apartment prices slowed down as well, to 42 percent, from 48 percent in 2005.
The current prices of housing were becoming increasingly unaffordable for the majority of consumers. Those who can afford to buy a home at present prices mostly prefer private houses to apartments in blocks of flats.
Compared with 2005, the demand for apartments plunged by 16 percent in Lithuania last year, while the demand of private houses shrank up to 3 percent in the reporting period. The demand in apartments and private houses in Vilnius plunged by 17 percent and 11 percent, respectively, over 2006. However, the trends prevailing on the private houses market of the capital were adjusted somewhat by several large-scale private house sales transactions implemented in the fourth quarter of last year.
Lietuvos Zinios, Lietuvos Rytas

Monday, 19th of March

RST power grid eager to enter blue chip list of Vilnius bourse
Rytu Skirstomieji Tinklai (RST), the state-run power grid operator, has applied to the Vilnius Stock Exchange (VSE) for its inclusion into the Official trading list. The application was filed on March 16. The securities of RST has been quoted on the Current List of VSE since February 2002. The company traded for LTL 3.67 on Thursday.
Approximately 8.37 percent of RST shares are currently floated on the market. The state owns 71.35 percent of the power grid company, while Germany's E.On Ruhrgas holds a 20.28 percent stake.
Verslo Zinios, Respublika

Linas Agro sells veterinary centre
Linas Agro has sold its company Linas Agro Veterinarijos Centras. Company Magnum Medical purchased the centre for undisclosed sum. A part of the funds received for the sale of Linas Agro Veterinarijos Centras might be used for the construction of biodiesel plant. Linas Agro presently controls company Mestilla, which is implementing an investment project worth LTL 140 million – construction of biodiesel factory in Klaipeda FEZ.
Verslo Zinios

More specialists studied in 2006
55 percent of Lithuanians were studied in education institutions, participated in various courses and seminars or studied individually last year. 28 percent of people studied in 2003. 58 percent of women and 52 percent of men studied in 2006. Specialists, junior specialists and junior officials studied most of all (67 percent). The number of studying workers was the lowest – 19 percent.
Verslo Zinios

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