Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 2.2008

Saturday, 12th of January

Vilnius bourse was passive
The Vilnius Stock Exchange (VSE) moved lower on Friday, with the investors mostly focused on Teo LT, the dominant telecommunications operator, which raked in more than LTL 2 million in shares turnover. The OMX Vilnius index slid 0.59 percent, to 513.73 points, while the OMX Baltic Benchmark eased 0.2 percent, to 678.66 points, and the OMX Baltic 10 index of ten most liquid Baltic stocks shed 0.52 percent, to close at 302.3 points. "The market was overly passive on Friday. Yet the corporate results due to be published in the nearest time might revive the market at least a bit," the analysts of Finasta brokerage said in session comments.
Lietuvos Zinios

New program by Ukio bank
Ukio Bank presented a program with special offers for elderly people, it is said that the new program will help decreasing their expenses. The bank will offer the participants of the program to save money, as they will not have to pay the commission fee while paying for such communal services as water, gas and electricity. Such tax concessions will be applied for all elderly people who will transfer their pensions to Ukio bank account or payment card until March 21. The participants of the new program will also be able to cash their money in Ukio, Sampo and Nordea banks' ATMs and offices free of charge.

No rush about the national investor
Lithuania's Conservative, Liberal Democratic, Labor and Liberal MPs urge no rush in adopting the amendments to the legislation on the establishment of the national investor company that would implement key energy project, including the construction of new nuclear power plant and power bridges to Poland and Sweden. Four parliamentary groups have proposed to call a special parliamentary session, which would decide on the nuclear power legislation and related agreements, on February 11-23. The parliament has accepted the proposal and agreed to make a break in the law making procedures concerning the amendments to the nuclear power plant legislation. According to the proposal, the final draft agreements between the government and NDX Energija, which would be updated with regard to the recommendations of the parliament, would be submitted by February 10. The amendments to the nuclear power plant legislation would provide for the setting up of the national investor company via the establishment of new parent company.
Kauno Diena, Respublika, Lietuvos Zinios, Lietuvos Rytas

Friday, 11th of January

Pension funds in Lithuania
Lithuania's pension funds investing into stocks achieved the highest return in 2007.
However, the fortunes of equity investing pension funds turned for the worse in the second half of the year, while the bonds investing and balanced funds improved the return indexes. In the group of reasonable risk funds (investments into equities at 70-100 percent of resources), the highest yield - 9.95 percent - was achieved by SEB Pensija 3 fund controlled by SEB VB Banko Investiciju Valdymas (SEB VB Bank Investment Management), the investment management arm of SEB Vilniaus Bankas. The average annual return of that fund since establishment made up 10.1 percent, the National Association of Financial Analysts (FAA) said in an overview of 2007 investment returns of Lithuania's second pillar pension funds. Sampo Pensija 100, a fund controlled by Sampo Pensiju Fondu Valdymas (Sampo Pension Fund Management), the pension funds management arm of Sampo bank, ranked the second with the return of 8.48 percent, while the Reasonable Risk Pension Fund of Finasta Investiciju Valdymas (Finasta Investment Management), was the third with the 2007 return of 6.12 percent.
Kauno Diena, Lietuvos Rytas

Rimi Lietuva reports figures
Rimi Lietuva, the operator of the fourth largest Lithuania's retail chain, reported LTL 856.3 million in sales for full 2007, a surge of 28 percent versus the year-earlier figure. In December alone, the sales rose by 19 percent, year-on-year, to LTL 95.6 million, Rimi Lietuva said in a statement. The chain failed to cross the LTL 1 billion annual sales threshold last year, although the rise in its sales was the fastest across the Baltic countries. Full-year sales of Rimi Baltic group increased by 19 percent, to LTL 3.993 billion; while in December alone the Baltic sales grew by 15 percent, to LTL 434 million.
Lietuvos Rytas

Sanitas reports numbers
Sanitas, the owner of pharmaceutical plants in Lithuania, Poland and Slovakia, reported LTL 342.902 million a twofold surge versus the year-earlier figure, although 2 percent or LTL 7 million below the full-year forecasts. In December alone, the sales of the group grew by 22 percent, year-on-year, to LTL 32.108 million, Sanitas said in a statement. The group earlier projected the net profit of LTL 34.3 million and EBITDA of LTL 105.8 million for full 2007. The sales were seen growing to LTL 350 million, although the executives of the group admitted late in 2007 that the actual sales might miss the forecasts. For 2008 the generics group has revised the net profit projections up by 14.3 percent, to LTL 62.2 million. Full-year sales are seen growing to LTL 393.7 million, EBITDA - to LTL 120.7 million.
Respublika, Verslo Zinios

Thursday, 10th of January

Inflation will rise even more
Fast growing labor costs and regulated prices as well as soaring fuel prices will affect the consumer prices on Lithuania's market further this year, and the inflation might hit double-digit level in spring, the analysts warn. "The prices of numerous services, including transport, taxi, heating, other utilities, including waste removal, etc., will grow this year. Higher excise duties, which will grow further in future, will also contribute to the rise in inflation," Yekaterina Rojaka, senior analyst with DnB Nord bank, said in a statement. In spring the inflation might hit the double-digit level, which would undermine the purchasing power of Lithuania's consumers and reduce the savings return, she projected. Moreover, a large chunk of increase in income would be spent on food, the prices of which had been galloping of lately, Rojaka added. "The inflation being "imported" in Lithuania should not see any positive changes in the nearest time. The prices of coffee, sugar, cacao and chocolate continue to grow on the global markets amid short supply. The prices of those commodities are seen soaring by one-fifth this year. The analysts are projecting a strong rise in the prices of metals and energy resources. A decline of US dollar is boosting the demand in alternative investment products and supports the growth of their prices," the analyst said. The government sees the consumer prices growing until mid-2008, and the inflation should decline in the second half of the year.
Lietuvos Zinios, Respublika, Lietuvos Rytas, Verslo Zinios

FlyLAL carries more pasengers
Lithuania's flagship carrier FlyLAL-Lithuanian Airlines said on Wednesday that it carried 526,000 passengers last year, an increase of 14 percent on the previous year.
The airline's passenger load factor rose by 3.3 percent last year, it said. The air carrier intends to add around ten new destinations to its flights schedule for the next summer season starting March 30. FlyLAL plans to operate more than 600 regular flights and carry over 60,000 passengers monthly during the summer season. The airline expects to expand its fleet to ten Boeing planes and four Saab 200 aircraft by April and add another three to five Boeings next year.

Situation of Leo LT is unknown yet
Lithuania's government has proposed to give the status of companies of special strategic significance for national security to Leo LT, the national investor company, and future nuclear power plant. The Cabinet has approved the amendments to the legislation on companies of strategic significance for national security, which provide for the inclusion of Leo LT and future nuclear power plant into a new list of facilities of special strategic significance. If the parliament approves the amendments, the capital of Leo LT may include private national capital as well as foreign capital compliant with the European and transatlantic integration criteria, and the state will retain the decisive role. Moreover, the government has proposed to confirm the provisions stipulating that the state will hold more than a half of authorized capital of Lietuvos Energija (Lithuanian Energy), the power utility, the state-run shares in which will be transferred to Leo LT. The parliament will be asked to consider the said amendments, as well as the amendments to the law on nuclear power plant and the results of talks with NDX Energija, on Friday as a matter of urgency.
Lietuvos Rytas

Wednesday, 9th of January

Producer prices soared by 19,4 percent
Producer prices or the prices for manufactured goods at the factory gate soared by 19.4 percent in Lithuania in December year-on-year, the country's Statistics Department reported. The monthly rise mostly resulted on a 6.9 percent increase in the prices of chemicals, 1.5 percent increase in the prices of electricity, gas, steam and hot water, and 1 percent rise in the prices of foodstuffs and drinks. The overall increase was partly offset by a 9.1 percent decline in the prices of clothes and 1.4 percent drop in the prices of petroleum products, the department said.
Lietuvos Zinios

Lithuanian Free Market Institute is among the best Central and Eastern European public policy centres
Foreign Policy Research Institute (FPRI), a US think-tank, has named the Lithuanian Free Market Institute (LLRI) among the best Central and Eastern European (CEE) and global public policy centers. The list of best centers includes 228 organizations, each of which may be considered "the most important centers worldwide", the authors of FPRI study report said. The general list of organizations studied by FPRI included 10 Lithuania's public policy centers although LLRI was the only one to get the title. The list of best public policy centers worldwide does not include any organizations from Latvia or Estonia.
Kauno Diena, Respublika

Maxima Group changes management
Maxima Grupe (Maxima Group), a recently established company, from now on will manage the operations of Maxima, the largest retail chain in the Baltics, as a parent company. Maxima Grupe has formed its management board and appointed Gintaras Marcinkevicius as its chief executive officer, the company said on Tuesday. Marcinkevicius, formerly CEO of Maxima LT, said that the establishment of the new parent company was due to the chain's rapid expansion. "We aim to centralize functions by separating strategic decision-making from decision execution," he said. Maxima Grupe will manage the retail business in the Baltic countries and Bulgaria via Maxima LT in Lithuania, Maxima Latvia, Maxima Eesti in Estonia and Maxima Bulgaria, and via Ermitazas.
Respublika, Lietuvos Rytas

Tuesday, 8th of January

Aggregate assets of 11 Lithuanian commercial banks and foreign bank branches are presented
The aggregate assets of 11 Lithuanian commercial banks and foreign bank branches grew by LTL 17.995 billion or 30.5 percent during the first eleven months of 2007, to reach LTL 76.905 billion as of late November. SEB Vilniaus Bankas retained the lead on the market with the assets of LTL 23.823 billion at the end of November, the Lithuanian Banks' Association reported. Hansabankas was the second with the assets of LTL 18.008 billion, and was followed by DnB Nord.
Kauno Diena, Lietuvos Rytas

Fuel price cross EUR 1 per liter
Fuel prices at the pumps in Lithuania have crossed the EUR 1 per liter mark to reach new all-time highs following a recent hike in the excise duty. The last time the price of 95 gasoline, the most popular grade in Lithuania, touched 1 euro per liter was in July 2006, while the price of diesel fuel had never gone past that level before. The hike in the excise duty on fuel took effect on January 1, but retailers did not increase prices until the start of the weekend. Prices at the pumps jumped by around LTL 0.19 per liter on Friday compared with early Wednesday, the first working day of this year. The increase was almost twice as high as expected. At Lukoil's filling stations in Vilnius on Monday, the price of 95 gasoline was around LTL 3.51 per liter and the price of diesel fuel was as high as LTL 3.60 per liter. Mazeikiu Nafta's Orlen Lietuva stations in the capital city were selling fuel at the same prices as Lukoil.
Respublika, Lietuvos Zinios, Kauno Diena, Verslo Zinios, Lietuvos Rytas

Cargo traffic through the Lithuanian port of Klaipeda increases
Cargo traffic through the Lithuanian port of Klaipeda increased by 15.8 percent last year to an all-time high of 27.35 million tons, up from 23.611 million tons handled in 2006, the port authority has reported. In December, cargo-handling volumes grew by 15.5 percent year-on-year. The report showed an increase in all types of cargo the port handles, including general cargo, bulk and dry bulk cargo, and liquid cargo. The highest growth was recorded in the handling of timber (50.4 percent), containers, as measured by tonnage, (43.9 percent), agricultural products (39.7 percent), bulk fertilizers (34.7 percent) and liquid fertilizers (33.8 percent).
Verslo Zinios

Monday, 7th of January

Mazeikiu Oil the largest company in Lithuania in 2007
Mazeikiu Nafta (Mazeikiai Oil), the sole oil refinery in the Baltics, was the largest company in Lithuania in the first nine months of last year with sales of LTL 6.831 billion. Maxima LT, the operator of the biggest retail chain in the Baltic countries, ranked second with sales of LTL 4.95 billion, and Achemos Grupe (Achema Group), a conglomerate of more than 50 companies, was in third place with sales of LTL 2.651 billion. Lukoil Baltija, the operator of the largest chain of filling stations in Lithuania, came in fourth with sales of LTL 1.477 billion and the Palink Group, the operator of the Iki grocery chain, was fifth with sales of LTL 1.357 billion. The top five were unchanged from the same period a year earlier. Senuku Prekybos Centras, the country's largest chain of building supplies and do-it-yourself goods, moved to sixth position with sales of LTL 1.138 billion, pushing the state railway company Lietuvos Gelezinkeliai (Lithuanian Railways) down to seventh position, with sales of LTL 1.043 billion. Achema, the country's biggest manufacturer of nitrogen fertilizers and other industrial chemical products, jumped from 15th place in the nine months of 2006 to eighth place last year, with sales of LTL 1.021 billion.
Lietuvos Zinios

Lithuania issues twice as many work permits to foreigners in 2007
Amid falling unemployment and rising demand for labor in Lithuania, the country issued twice as many work permits to foreigners in the first nine months of last year as in the same period a year ago, an Economy Ministry report showed on Thursday.
The Lithuanian Labor Exchange granted 4,253 work permits to foreign nationals in January-September 2007, up from 2,050 permits a year earlier, according to the ministry's latest Economic Overview report. Some 44 percent of all foreign workers are employed in the transport sector, 31 percent in the manufacturing sector, 20 percent in the construction sector and five percent in the services sector. Foreign workers came to Lithuania from 23 countries, mostly from Ukraine (42 percent) and Belarus (38 percent). The number of workers from Ukraine declined by 10 percent over the reporting period, but the number of workers from Belarus increased by 18 percent. The number of Moldovan nationals who came to work in Lithuania rose to account for nine percent of all foreign workers.
Lietuvos Zinios

Invalda sells its two hotels in Vilnius
Lithuanian investment company Invalda has sold its two hotels in Vilnius, the Holiday Inn Vilnius and the Ecotel Vilnius, to an unnamed buyer. Invalda said that it signed a deal to sell 100 percent of shares in the hotel operator. Valmeda on Friday, but did not name either the buyer or the price of the transaction. The company expects to close the deal by the end of this month. "Hotel management is a truly successful business area for the Invalda Group. But we are always on the lookout for possibilities for the optimum use of funds. Pulling out of certain businesses allows freeing up some funds and using them even more efficiently," Invalda President Darius Sulnis said in a statement. He declined to give further details until the deal has been finalized. The four-star Holiday Inn Vilnius was built and opened for business in 2002, and the economy-class Ecotel Vilnius was acquired by Invalda in 2004. Both hotels are in attractive locations in the capital city and have occupancy rates of around 65 percent.
Respublika, Kauno Diena, Verslo Zinios

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