Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 11.2008

Saturday, 8th of March

Vilkyskiu Dairy agrees to boost its authorized capital
The shareholders of Vilkyskiu Pienine (Vilkyskiai Dairy), one of the most technologically advanced cheese producers in Lithuania, have agreed to boost the authorized capital by LTL 2.59 million and expand the company's board to six members.
The capital will be raised to LTL 11.943 million via the sale of 2.59 million new shares at a price of at least LTL 5.4 per share, the company has said in a statement. The dairy expects the receipts on the issue to reach at least LTL 14million, which will be channelled for the acquisition of Kelmes Pienine (Kelme Dairy).

Estonians will not support Lithuania
The opinion expressed by an official of the Estonian Economy Ministry that his country would not support the Lithuanian aim of extending the lifespan of the Ignalina Nuclear Power Plant does not reflect the official position of Estonia, says the country's Ambassador to Lithuania Andres Tropp. Violeta Gaizauskaite, director of the Lithuanian Foreign Ministry's Information and Public Relations Department, said Tropp had also stressed on Friday that Estonia understood well the difficulties that Lithuania would go through after closing Ignalina in 2009. Tropp restated Estonia's firm support to the construction of a new nuclear plant in Lithuania. Estonia, which is one of Lithuania's closest allies and future partner in constructing the new power plant, has recently made statements that the country will not support Lithuania's quest to negotiate extension of Ignalina N-plant's operation, which the latter grounds on the imminent economic burden.
Lietuvos Zinios, Lietuvos Rytas

Ambitions of flyLAL
Tadas Puksta, CEO of flyLAL-Lithuanian Airlines, notes that flyLAL was acknowledged as the most punctual airline in a couple of airports. For example, it was acknowledged as the most punctual European airline in Amsterdam in 2005. Puksta adds that such evaluations encourage the company to maintain its name. He also says that it is difficult to reach such result, as it requires powerful technical basis. Puksta claims that large technical capacities in Lithuania allow maintaining not only Lithuanian but planes from neighbouring countries too.

Friday, 7th of March

BTA Draudimas reports net profit
Latvian-equity Lithuanian general insurance company BTA Draudimas (BTA Insurance) reported LTL 3.271 million in unaudited net profit for full 2007, a surge of 38 percent versus the year-earlier figure of LTL 2.377 million. The amount of direct insurance premiums written by the company soared by 66 percent, year-on-year, to LTL 146.716 million last year, BTA Draudimas said in a statement. "Solid performance figures were the result of active expansion focused on bringing the services closer to our customers. Moreover, the growth of Lithuania's insurance market and the overall economy also contributed to the results," Arnis Zekunde, BTA Draudimas CEO, said. The amount of property insurance premiums alone soared twofold last year, the company said. The sales of travel insurance to private customers increased by 78 percent, to legal entities - soared threefold versus 2006. Last year the company paid out LTL 56.347 million in direct insurance claims, doubling the year-earlier amount of LTL 28.336 million.
Verslo Zinios, Respublika

Akmenes Cement might postpone the launch of construction of a plant
Akmenes Cementas (Akmene Cement), the sole Lithuania's cement producer, may postpone the launch of construction of some LTL 300 million worth plant. The launch of construction might be postponed due to longer than expected designing of installations, Sigitas Leminskas, Akmenes Cementas deputy CEO for the construction of new technological line, said. "We need to know the parameters, the weight and other data of new installations before we sign a contract with the contractors due to design the buildings and premises. The suppliers of equipment have asked for three or four months to work out the projects of all mechanisms. Then the designers will do their share of work. Afterwards we will choose the builders and sign a respective contract," he added. Initially the company planned to launch the construction in summer, yet now it expects the actual construction works to start only in fall.
Verslo Zinios, Lietuvos Rytas

FlyLAL invited to join SkyTeam alliance
Lithuania's flagship carrier FlyLAL-Lithuanian Airlines has been invited to join the SkyTeam airline alliance as an associated member. Following almost two years of negotiations the executive committee of the alliance has confirmed that the Lithuanian carrier complies with the requirements set for the membership in the alliance, FlyLAL-Lithuanian Airlines has said in a statement. The final criteria of joining the alliance and the date of accession will be confirmed in the nearest time. SkyTeam is a global airline alliance partnering Aeroflot, Aeromexico, Air France, KLM, Alitalia, Continental Airlines, Czech Airlines, Delta Air Lines, Korean Air, and Northwest. Lietuvos Rytas, Verslo Zinios

Thursday, 6th of March

Vilnius Furniture reports numbers
Vilniaus Baldai (Vilnius Furniture), one of Lithuania's leading furniture manufacturers, reported LTL 20.816 million in sales for the first two months of 2008, down 1.4 percent versus the year-earlier figure of LTL 21.1million. In February alone, the sales declined by 2.5 percent, to LTL 10.35 million, from LTL 10.613 million in February 2007, the company said in a statement. For 2008 the company is projecting the sales of LTL 199.5 million and the net profit of LTL 5.8 million.

Unemployment rate rises
Lithuania's unemployment rate rose to 4.7 percent of the workforce in February from 4.6 percent a month earlier, the Labor Exchange reported on Wednesday.
Year-on-year, the jobless rate shrank by 0.3 percentage points last month. A total of 99,895 people were registered unemployed at the end of February, of which 57.4 percent were women and 42.6 percent were men, the exchange said. As of Mar. 1, the number of jobseekers was the largest in the municipalities of Akmene and Druskininkai (9.4 percent each), Jurbarkas (9.1 percent), Ignalina and Rokiskis (8.6 percent each), and the smallest in the municipalities of Neringa (1.6 percent), Elektrenai (1.8 percent), Trakai and Kazlu Ruda (2.2 percent each) and Kretinga (2.3 percent).
Verslo Zinios, Respublika

Mazeikiai Oil will losse discounts at the port of Klaipeda
Mazeikiu Nafta (Mazeikiai Oil), the sole Lithuania's oil refiner controlled by Poland's PKN Orlen, will lose any discounts at the port of Klaipeda from mid-2008, based on the latest fees of port services approved by the government on Wednesday. With those fees levied, Mazeikiu Nafta's expenses on port services should increase by less than 10 percent. In line with the draft considered by the government, port fees for tankers were to be raised by 10 percent, yet the Cabinet approved a compromise offered by Transport Minister Algirdas Butkevicius, which has not been made public as yet Meanwhile, Sigitas Dobilinskas, head of Klaipeda Port Authority, said that the port fees for tankers would be lower than those in the ports of Riga or Tallinn even after the increase, and Klaipeda could not compete with the port of Ventspils, which handled some 20 million tons of petroleum products. "Mazeikiu Nafta has admitted that the infrastructure and the quality of service at the port of Klaipeda have improved considerably compared with other ports," Dobilinskas noted.
Verslo Zinios

Wednesday, 5th of March

Lithuanian Railways post figures
Lithuania's national railway company Lietuvos Gelezinkeliai (Lithuanian Railways) said on Tuesday that it posted a significant increase in net profit and revenue for 2007, but added that rising costs and investments are likely to slow its growth this year. The railway operator, which is 100 percent owned by the state, made a net profit of LTL 130 million last year, up 25 percent from LTL 112 million in 2006, according to preliminary figures. Annual revenue increased by 16.5 percent to LTL 1.407 billion. The railway operator, which earns around 90 percent of its revenue from freight transportation, handled 53.5 million tons of freight last year, a rise of 6.6 percent year-on-year. Passenger traffic declined by 16 percent to 5.2 million passengers.
Verslo Zinios

Travel and Tourism situation in Lithuania
Lithuania moved up four places to rank 47th among 130 nations in the Travel and Tourism Competitiveness Report 2008 published by the World Economic Forum (WEF) on Tuesday. In this year's rankings, Estonia remained well ahead of Lithuania in 26th place, up from 28th position last year. Latvia ranked two places higher at number 45, up from 56th position. Poland rose to 56th position from last year's 63rd spot. Countries were scored based on three broad categories: travel and tourism regulatory framework, business environment and infrastructure, and human, cultural and natural resources. Lithuania is ranked 31st, 45th and 74th in these categories, respectively. The WEF's experts identified insufficient accessibility by air transport and inefficient marketing as key shortcomings hampering the improvement of Lithuania's tourism competitiveness.
Lietuvos Rytas, Kauno Diena

Reso Europa announces profit
Lithuanian non-life insurer Reso Europa turned about LTL 2.8 million in unaudited profit for full 2007, almost trebling the year-earlier profit figure of slightly more than LTL 1 million. Last year Reso Europa concluded 222,700 insurance contracts and wrote more than LTL 54 million in insurance premiums. Compared with 2006, the amount of direct insurance premiums written by the company increased by 13 percent. The company ranked the sixth among Lithuania's non-life insurers in terms of premiums written in 2007.
Lietuvos Rytas

Tuesday, 4th of March

Coopernic takes over control of IKI
The European alliance of independent retailers Coopernic has taken over control of Lithuania's second-biggest grocery chain Iki from the Ortiz brothers from Belgium and the US financial group Citigroup. Coopernic last Friday closed the deal on the acquisition of an 80 percent stake in Palink, the chain's operator, Iki said in a press release on Monday. Baltisches Haus, a company associated with the former owners, retains a 20 percent interest in Palink. "The Iki Group is proud to have been chosen for this landmark transaction and expects considerable benefits from the partnership," said Aidas Mackevicius, the CEO of Iki. The shareholders of Coopernic and Palink signed the deal on November 26 last year. The European Commission gave the green light for the acquisition on Feb. 11 this year.
Verslo Zinios, Lietuvos Rytas

Klaipeda Oil posts revenues
Klaipedos Nafta (Klaipeda Oil), Lithuania's state-run oil product terminal operator, posted LTL 20.3 million in revenues for the first two months of 2008, a surge of 37.2 percent from the year-earlier figure of LTL 14.8 million. Handling volumes rose by 36.9 percent, year-on-year, to 1.416 million tons of petroleum products, from 1.034 million tons in January-February 2007, Klaipedos Nafta said in a statement. The representatives of Klaipedos Nafta attributed the rise in handling and revenues to effective operations of the terminal, contracts with long-term customers, stable cargo flows, successful cooperation with the railway operator Lietuvos Gelezinkeliai (Lithuanian Railways) and favourable weather conditions.
Verslo Zinios

Time to fill declarations
Starting Monday, Lithuanian taxpayers can file their income tax declarations and receive their tax refunds online, the State Tax Inspectorate (STI) said. Tax declarations can be filled in and submitted via the STI's electronic declaration system at Officials at the tax authority said that users of the electronic system would receive their tax refunds within ten days. Those who will file paper declarations will see the funds in their bank accounts no later than July 31. May 6 is a deadline for filing income tax declarations.
Kauno Diena, Lietuvos Rytas, Respublika, Lietuvos Zinios

Monday, 3rd of March

Mazeikiai Oil reported numbers
Lithuania's oil refinery Mazeikiu Nafta (Mazeikiai Oil), which is controlled by Poland's PKN Orlen, reported on Friday a consolidated net profit of LTL 99.4 million for 2007, down from LTL 180.1 million in 2006. It said annual revenue fell to LTL 8.8 billion last year from LTL 11.865 billion in 2006. Mazeikiu Nafta launched a renovated vacuum distillation unit at its bitumen and sulfur production complex in February of last year to partially replace a larger unit that was destroyed by a major fire in October 2006 and to increase its light oil production. The company said the partial rebuilding of lost capacity helped it to end the year in the black. Some LTL 253 million in insurance payments for the fire also had an impact on the 2007 financial result, it said. The refinery processed 5.816 million tons of crude oil and other feedstock last year, down from 8.34 million tons in 2006.
Kauno Diena

Vilniaus Degtine presents figures
Lithuania's alcoholic beverage producer Vilniaus Degtine, which is controlled by the French group Belvedere, said on Friday that its annual net profit halved last year to LTL 1.682 million. Full-year sales rose by 10.5 percent to LTL 67.795 million, the Vilnius-based company said. Belvedere's Polish subsidiary, Sobieski, holds a 68.29 percent stake in Vilniaus Degtine.
Kauno Diena

Central government’s debt narrows
The Lithuanian central government's debt narrowed by LTL 456.9 million in January from December to LTL 15.344 billion, accounting for 14.3 percent of this year's projected GDP, the Finance Ministry reported on Friday. The central government's foreign debt decreased by LTL 98.1 million over the month to LTL 11.102 billion, representing 72.4 percent of the total debt. Its domestic debt fell by LTL 358.8 million to LTL 4.242 billion, or 27.6 percent. The central government sector was LTL 10.78 billion in debt to foreign banks and other financial institutions, and LTL 322.2 million to international organizations.
Verslo Zinios

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