Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 6.2008

Saturday, 9th of February

Mazeikiai Oil wins a profitable order
Mazeikiu Nafta (Mazeikiai Oil), the sole Lithuania's oil refining and transportation concern, has won a LTL 69.58 million order from Lithuania's Armed Forces. The military buys 95-grade gasoline, diesel fuel for land vehicles and jet fuel from the oil refiner. The annual contract was signed on Jan. 4, the Public Procurement Office said in a statement. The Armed Forces also concluded petroleum products purchase contracts with another four local companies. The army is to buy diesel fuel for naval vessels from Gindana for LTL 5.41 million, diesel heating fuel and 95K grade gasoline from Lietuva Statoil for LTL 2.47 million, liquefied petroleum gas for utility and everyday needs from Andopas for LTL 2.1 million and aviation gasoline from Neste Lietuva for LTL 851,850.
Kauno Diena

No plan of euro introduction in Lithuania
Lithuania has no euro adoption plan and could introduce the single currency in 2012 at the earliest, president of SEB Bankas, the largest Lithuania's commercial bank, believes. "We do not have the plan of euro introduction, we really lack it. And we fail to state openly that we want to have it. I hope that such a plan would be worked out after the elections,” Audrius Ziugzda said during a news conference on Friday. The authorities might have no such plan at the moment: "We cannot have it when we are making such ample promises and wasting money." "If the government fails to adopt a truly clear decision, which will prove that it controls the fiscal policy and the budget, the credit rating of the country might probably decline further. Based on today's signs, a big wish to spend big is hardly compatible with the 0.5 percent budget deficit target. The government should follow more stringent fiscal policy," Ziugzda said.
Kauno Diena, Lietuvos Rytas

Lithuanians Railways signed a contract
Lithuania' Color s state-run railway operator Lietuvos Gelezinkeliai (Lithuanian Railways) signed two LTL 28.2 million worth contracts with Germany's DB-International on assistance for the upgrade of several track sections. The German company will render technical assistance for the upgrade of Vilnius-Kaunas track and its adjustment to speeds up to 160 kilometers per hour, as well as two railway routes Kyviskes-Valciunai and Vaidotai-Paneriai. The upgrade of two latter lines should reduce the flow of trains passing through Vilnius by one-third.

Friday, 8th of February

Snoras reports profit
The group of Lithuanian commercial bank Snoras, which is controlled by Russia's businessman Vladimir Antonov and Lithuania's banker Raimondas Baranauskas, reported LTL 83.45 million in profit for full 2007, a rise of 27 percent versus the year-earlier figure. The profit of the bank's group, which includes Latvias Krajbanka and 11 subsidiaries, includes LTL 14.41 million income on the sale of 40 percent stake in real estate subsidiary Vilniaus Kapitalo Vystymo Projektai (Vilnius Capital Development Projects), Snoras bank said in a statement. The assets of the group rose by 37.9 percent, to LTL 9.02 billion as of late December, from LTL 6.54 billion a year earlier.
Verslo Zinios, Respublik

Mazeikiai Oil will not pay dividends
Mazeikiu Nafta (Mazeiki Color ai Oil), the sole Lithuania's oil refining and transportation concern, will not pay dividends to its shareholders - the Polish oil concern PKN Orlen and Lithuania's government - in the years immediately ahead. "Considering the scale of planned investments, the payment of dividends would be truly painful for Mazeikiu Nafta in the years to come," the Polish news agency PAP quoted PKN Orlen president Piotr Kownacki as saying. In line with generally accepted practice, companies investing heavily into expansion channel the profit for the development of activities, Kownacki said.
Respublika, Verslo Zinios

Tez Tour is fined
Lithuania's Competition Council has slapped a LTL 20,000 fine on Turkish-equity international tour operator Tez Tour for misleading advertising, which it was ordered to remove from catalogues. The watchdog has ruled that a certain advertisement of Tez Tour published in the catalogue Travelman 2006-2007 Egypt, Gran Canaria was misleading for consumers. The advertisement slammed by the panel as misleading offered more attractive holiday conditions at the Regina Style hotel in Hurghada, Egypt. As ruled by the watchdog, the misleading statements were "Regina Style hotel four stars" and "Separate menu for children". The amount of fine was based on a quite long period of advertisement's publication in the catalogue. Moreover, this was the second violation of the Law on Advertising by the company. The first fine - of LTL 10,000 - was imposed last May.
Verslo Zinios, Lietuvos Rytas

Thursday, 7th of February

Vilnius Furniture reports sales
Vilniaus Baldai (Vilnius Furniture), one of Lithuania's leading furniture manufacturers, reported LTL 10.466 million in sales for January, down 0.2 percent versus the year-earlier figure of LTL 10.489 million. By late February the company would launch the production of three new products, which were expected to account for more than a half of total sales in 2008, Nerijus Pacevicius, Vilniaus Baldai CEO, said in a statement. The furniture producer earlier said that its preliminary net earnings made up LTL 2.082 million in 2007. For 2008 the company is projecting the sales of LTL 199.5 million, the net profit of LTL 5.8 million and the EBITDA of LTL 19.96 million.

Unemployment rate rises
Lithuania's unemployment rate rose to 4.6 percent of the workforce in January from 4.3 percent in December, the Labor Exchange reported on Wednesday. Year-on-year, the jobless rate in January was down by 0.4 percentage points. A total of 97,700 people were registered unemployed at the end of January, of which 58.3 percent were women and 41.7 percent were men. The number of reported job vacancies was 20,900, the Labor Exchange said.
Kauno Diena

Liquefied natural gas import terminal possibilities will be studied
Lithuania will study the possibility of building a liquefied natural gas (LNG) import terminal, the government's press office said on Wednesday. The government's Strategic Planning Committee decided on Wednesday to conduct a feasibility study and an environmental impact assessment of such a terminal, it said. The ministries of economy and environment were charged with the task of organizing the study. The government also plans to invite the country's major natural gas consumers to contribute to the preparation of the study. Lithuania's National Energy Strategy envisages performing a feasibility study to assess the possibilities of building a LNG import terminal and attracting private capital into the project. The LNG terminal would allow supplying Lithuania and neighboring countries with natural gas from alternative sources.

Wednesday, 6th February

PKN Orlen wants Klaipeda Oil
Polish oil group PKN Orlen has made no secret of its intentions to gain control of Lithuania's state-run oil terminal Klaipedos Nafta (Klaipeda Oil), but if it fails, it will turn its attention toward Latvian ports, Mazeikiu Nafta's (Mazeikiai Oil) top executives said on Tuesday. "The map shows that Mazeikiai can be approached both from Liepaja and from Ventspils. These ports are within the area of our interest," Marek Mroczkowski, the chief executive of PKN Orlen's Mazeikiu Nafta refinery, said at a news conference. He said that PKN Orlen was looking to take as high a stake in Klaipedos Nafta as possible. Mazeikiu Nafta wants to build a product pipeline to the Klaipeda terminal for oil product exports to the West. "Our plans are to hold as many shares as possible, but looking from a perspective, that is not an obligatory condition. All would depend on a well-formulated shareholder agreement," Mazeikiu Nafta's CEO said. PKN Orlen President Piotr Kownacki said that the group would prefer to take a majority stake in Klaipedos Nafta, but added that it could settle for a smaller, blocking stake of 34 percent.
Respublika, Kauno Diena, Verslo Zinios, Lietuvos Rytas

Rokiskis Cheese reports figures
Rokiskio Suris (Rokiskis Cheese), one of the largest dairy groups in Lithuania, on Tuesday reported preliminary consolidated sales revenue of LTL 46.428 million for January, down 16.6 percent year-on-year. Rokiskio Suris attributed the decline in sales revenue to decreased exports and falling dairy product prices in global markets. The group said earlier that its annual consolidated sales revenue increased by 27.8 percent last year to LTL 662.188 million, based on preliminary data. Rokiskio Suris CEO Antanas Trumpa and Pieno Pramones Investiciju Valdymas, a company controlled by Trumpa, held 47.87 percent of Rokiskio Suris' stock as of April 2007. Small shareholders controlled the remaining stake.
Verslo Zinios

Lithuanian Energy posts profit
Lithuania's state-run power transmission grid operator Lietuvos Energija (Lithuanian Energy) and its subsidiaries posted LTL 49.5 million in preliminary unaudited consolidated net profit for full 2007, a surge of 2.6 times versus the year-earlier figure of LTL 18.7 million. Pre-tax profit soared by 2.75 times, to LTL 61.9 million, from LTL 22.5 million in 2006. The revenues of the group grew by 20 percent, to LTL 1.2 billion, from LTL 1.002 billion a year earlier, while the revenues of Lietuvos Energija alone rose by 18 percent, year-on-year, to LTL 1.133 billion, the company said in a statement. The pre-tax profit of Lietuvos Energija alone soared to LTL 60.9 million, from LTL 21.8 million in 2006, the net profit - to LTL 48.9 million, from LTL 18.4 million, and EBITDA - to LTL 211 million, from LTL 186.3 million.
Verslo Zinios

Tuesday, 5th February

Cooperation agreement for new nuclear power plant
Three Baltic countries and Poland intend to take active part in the construction of new nuclear plant in Lithuania and implement projects on the building of power links to Sweden, Poland and Finland. The communication, which the Economy Ministers of Lithuania, Latvia, Estonia and Poland signed in Vilnius on Monday, also stipulates that the energy companies of four countries shall harmonize their essential positions on the construction of new nuclear power plant by July 1 and submit thereof to their respective ministry of economy. Moreover, the Baltic countries and Poland will seek to speed up the connection of Baltic energy systems with those of Poland, Sweden and Finland.
Respublika, Lietuvos Zinios, Kauno Diena, Lietuvos Rytas

Vilnius airport posts numbers
Vilnius International Airport, the largest airport in Lithuania, posted on Monday a 30 percent increase in passenger and flight numbers for January. Year-on-year, the number of passengers last month jumped by 30.4 percent to 129,5 and the number of flights was up 27.3 percent to 2,870, Vilnius Airport spokesman Arunas Marcinkevicius said. The spokesman said that the rise in passenger numbers in January was much higher than last year's average annual increase of 18.3 percent. If this growth rate continues, the airport's annual passenger numbers may reach around 2 million this year, he added.

Inflation forecasts
Lithuania's central bank governor, Reinoldijus Sarkinas, expects inflation to start abating in early summer this year. "From May or June inflation can really begin to slow. I do not expect it to come down earlier," Sarkinas told reporters on Monday after meeting with Parliamentary Speaker Viktoras Muntianas. Lithuania's average annual inflation rate, as measured by the EU Harmonized Index of Consumer Prices (HICP), stood at 5.8 percent last December, while the Maastricht limit for euro adoption was 3.4 percent The Bank of Lithuania forecasts that the country's average annual inflation will be 7.9 percent this year and will decelerate to 4.9 percent next year.
Verslo Zinios, Lietuvos Rytas, Respublika, Kauno Diena, Lietuvos Zinios

Monday, 4th of February

Klaipeda Oil posts figures
Klaipedos Nafta (Klaipeda Oil), Lithuania's state-run oil product terminal operator, posted LTL 9.5 million in revenues in January, a surge of 25 percent from the year-earlier figure of LTL 7.6 million. Handling volumes rose by 19.9 percent, year-on-year, to 635,500 tons of petroleum products, Klaipedos Nafta said in a statement. In 2007 the handling at the terminal shrank by 1.9 percent, to 5.403 million tons, although the revenues rose by 6.6 percent, to LTL 77.9 million. The state owns 70.6 percent of Klaipedos Nafta, which is quoted on the I-List of Vilnius Stock Exchange.

Vilkyskiu Dairy signs agreement with Kelme Dairy
Vilkyskiu Pienine (Vilkyskiai Dairy), one of the most technologically advanced cheese producers in Lithuania, has signed an agreement on the purchase of Kelmes Pienine (Kelme Dairy) and its subsidiary Kelmes Pieno Centras (Kelme Milk Center) from the investment company Hermis Capital. Vilkyskiu Pienine would submit an application on the acquisition of 99.09 percent of Kelmes Pienine to the Competition Council coming week, the cheese producer said in a statement. "We have decided to acquire Kelmes Pienine since it is a strong and promising company, which will enable us to expand our range of products. Synergy effects produced by the transaction should further improve the performance figures of both companies. We seek to develop our activities in a focused way and achieve ambitious expansion targets," the statement quoted Gintaras Bertasius, Vilkyskiu Pienine's CEO, as saying.
Verslo Zinios

Baltic and Polish economy ministers meet
Baltic and Polish economy ministers are to convene for a meeting in Vilnius on Monday. The participants of the meeting called by Lithuania's Economy Minister Vytas Navickas Navickas will review the latest information concerning the progress achieved in Lithuania's nuclear power plant project, discuss the projected power links with Poland and Sweden, the necessity for the Baltic countries to join the Union for the Co-ordination of Transmission of Electricity (UCTE), other major regional energy infrastructure projects, the Economy Ministry has said in a statement. The meeting Regional Energy Policies will be attended by Latvia's and Estonia's Economy Minister Kaspar Gerhard and Juhan Parts, Polish vice-PM and Economy Minister Waldemar Pawlak.
Verslo Zinios

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