Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 28.2008

Saturday, 12th of July

Lithuania budget
The Lithuanian central government collected LTL 9.287 billion in budget revenues in the first half of this year, LTL 69 million above its revenue target of LTL 9.218 billion, the Finance Ministry reported on Friday. Total six-month revenues, including assistance funds from the EU and other foreign countries, amounted to LTL 11.784 billion. In June alone, the revenues exceeded the target of LTL 1.829 billion by LTL 7.7 million, to reach LTL 1.837 billion. Revenues, including the support funds, made up LTL 2.206 billion last month. The 2008 central government budget projects annual revenues of LTL 25.572 billion, including LTL 5.113 billion in support funds from the EU and other foreign countries.
Respublika

Impressive salaries
Gross monthly salary of Rymantas Juozaitis, CEO and chairman of Lithuania's national investor company Leo LT, totals LTL 50,000, which includes a LTL 32,000 gross salary assigned to him as the company's chairman and LTL 18,000 paid for his CEO duties. The gross salaries of other board members have been put at LTL 45,000 per each, chairmen of Lietuvos Energija and RST - at LTL 40,000 per each, the members of boards of the two companies - at LTL 30,000 per each, VST chairman - at LTL 35,000, and VST board members - at LTL 25,000 per each, Leo LT has said in a statement. The new boards of Lietuvos Energija, RST and VST were approved on July 8, effectively wrapping up the formation of executive management of Leo LT and three its subsidiaries.
Kauno Diena, Respublika, Lietuvos Rytas

Fuel prices in Lithuania
Statoil Lietuva, the operator of the second largest Lithuania's gas chain, attempted to raise the LPG prices at pump to the new record of close to LTL 2 per liter on Friday in response to strong growth in wholesale LPG prices. However, the competitors of Norway-equity chain ignored the new LPG price at Statoil stations, i.e. LTL 1.99 per liter, and left their LPG prices at pump unchanged. "The wholesale prices of LPG have risen sharply, thus we tried to boost the price on the retail market. However, competition is competition. Other chains left the prices unchanged and we were forced to reinstate the previous price," Skirmantas Maciukas, director of sales and supply department at Lietuva Statoil, noted. Meanwhile, Suskystintos Dujos, which runs a chain of 40 gas stations, raised the LPG prices at pump by 3-5 cents per liter earlier this week due to a surge in wholesale prices, the company's CEO Zigmantas Mackevicius said.
Respublika

Friday, 11th of July

EC is interested in Leo LT
If ruled a monopoly by the European Commission (EC), Lithuania's national investor company Leo LT will have to split the activities of its subsidiaries further in future.
Commenting on the statement by the European Union (EU) Energy Commissioner Andris Piebalgs that Lithuania would have to unbundle electricity transmission and distribution grids, Lithuania's Prime Minister Gediminas Kirkilas assured that the measure would be implemented if a respective EU Directive was adopted. "We will have to unbundle. There are various options. One of them - yes [to establish subsidiaries and split Leo LT]. We are the members of the European Union, we live in accordance with its legislation and follow its provisions," Kirkilas said. In a reply to the letters of MEP Ona Jukneviciene Piebalgs claimed that the national investor company Leo LT should observe the requirements of the EU Electricity Directive, i.e. to unbundle transmission and distribution grids both legally and practically. The grids might be owned by larger integrated companies although should be operated by separate independent subsidiaries.
Kauno Diena, Verslo Zinios, Respublika

Lifosa will provide a loan
Lithuania's phosphate fertilizer manufacturer Lifosa said on Thursday that it would provide a loan of 140 million US dollars to its majority shareholder, Russia's mineral and chemical group Eurochem. This accounts for almost 79 percent of Lifosa's undistributed profit of LTL 389.86 million as of late April. "The market's reaction to this decision is likely to be a negative one. For small shareholders, it would be better if the company paid out the excess money in dividends rather than lending it cheaply to the majority shareholder. Basically, that has nothing to do with Lifosa's core business," Andrius Adomkus, a broker with Jusu Tarpininkas, said.
Lietuvos Rytas, Verslo Zinios

Decision about Ignalina Nuclear Power Plant will be made by next January
The director of Lithuania's Ignalina Nuclear Power Plant (INPP) has said that a decision on whether or not to extend the plant's operation beyond its scheduled closure date in late 2009 has to be made by next January at the latest. "Today the most frequently asked question is, "What will the price of electricity be?" But in fact, a much more important -- if not the most important -- question is what is to be done to ensure that Lithuania has sufficient electrical energy, because there is a huge danger that will run short of it," the Order and Justice party quoted Viktor Shevaldin, the INPP director, as saying during a meeting with the party's leaders on Thursday. Shevaldin said that the plant must place orders for fuel supplies in 2010 at the end of this year or early next year at the latest. "We have ordered fuel for 2009, but we must make orders for 2010 at the start of next year at the latest, possibly in February if the supplier agrees. This is an indicative date. The fact is that time is running out," he said.
Lietuvos Rytas

Thursday, 10th of July

Leo LT plans launching a subsidiary
Lithuania's national electricity company Leo LT plans to establish a subsidiary to implement a project to build an energy link with Sweden and possible interconnection projects with other EU countries. Lithuanian Prime Minister Gediminas Kirkilas on Wednesday was informed about the Leo LT management board's decision to set up a subsidiary company called Tarptautiniu Jungciu Kompanija (International Link Company), the government's press office said. Lithuania is looking to connect its electrical grid with those of Poland and Sweden. LitPol Link, a Lithuanian-Polish joint venture established in May, is in charge of the former project. Lietuvos Energija (Lithuanian Energy), which is controlled by Leo LT, holds a 50 percent stake in the joint venture.
Lietuvos Rytas

Invalda agrees to the buyout of company’s capital
The shareholders of Lithuania's investment company Invalda have given a nod to the buyout of up to 10 percent of the issued company's capital at LTL 14-30 per share. Moreover, the shareholders' agreed the policies of staff's participation in the company's capital and payments to shareholders. Invalda intends to pay LTL 127.7 million to its shareholders in coming three years, i.e. LTL 3 per share based on the current number of shares issued. Payments to dividends will include dividends, buyout and other payments. Invalda is the first Lithuania's listed company to confirm an official policy of payments to shareholders, which will cover the period of 2008-2010.
Lietuvos Rytas, Verslo Zinios

New director in TV channel 5
Journalist and producer Edmundas Jakilaitis took over director's duties at the regional TV channel 5 Kanalas on Tuesday, July 8. "The main our task is to transform the channel into the national one. Starting from the fall season, the channel will change both the status and the name," the news portal alfa.lt quoted Jakilaitis as saying. The channel should be renamed NTK - Naujasis Televizijos Kanalas (New TV Channel). The producer company Media Team, which is led by Jakilaitis, pulled out of cooperation with the public broadcaster Lietuvos Televizija (Lithuanian Television) earlier this year. Lietuvos Rytas, the publisher of Lietuvos Rytas, the largest Lithuania's daily, owns 100 percent of TV channel.
Verslo Zinios, Lietuvos Rytas

Wednesday, 9th of July

Rokiskis Cheese reports numbers
Rokiskio Suris (Rokiskis Cheese), one of the biggest dairy groups in Lithuania, on Tuesday reported LTL 317.892 million in first-half consolidated sales, up 1.52 percent from LTL 313.113 million a year earlier. Rokiskio Suris said in early June that it expected to post a loss of LTL 17 million for the first half due to lower prices for export products and a significant increase in the average price for raw milk. The group is projecting consolidated sales of around LTL 700 million l for the full year 2008, up 5.7 percent from LTL 662.3 million l last year.
Respublika, Verslo Zinios

New appointments
Lithuania's power distribution company Rytu Skirstomieji Tinklai (RST), which is controlled by Leo LT, on Tuesday appointed Gintautas Mazeika, formerly the head of the insurance company PZU Lietuva, as chief executive officer. Mazeika, 41, replaced the electricity company's long-time CEO, 51-year-old Rimantas Milisauskas. RST's shareholders approved a new supervisory board, which appointed a new management board and Mazeika as its chairman. Andrius Simkus, the chief lawyer at Leo LT, was appointed chairman of the five-strong supervisory board. Mario Nullmeier, the head of the Baltic office of Germany's E.ON Ruhrgas International, is among the members of the supervisory board.
Kauno Diena, Verslo Zinios, Lietuvos Zinios, Respublika, Lietuvos Rytas

Lithuania absorbed 80 percent of EU’s structural aid
Lithuania has to date absorbed 80 percent of the EU's structural aid made available to it under 2004-2006 programs, the Finance Ministry reported on Tuesday. Out of nearly LTL 3.091 billion allocated to Lithuania from the Structural Funds for the three-year period, 2.46 billion euros has been paid out to project implementers and contractors, it said. Some 2,414 projects have been completed and the remaining projects are nearing completion. In total, more than 3,500 projects are eligible for funding in the 2004-2006 programming period. December 31, 2008 is a deadline for implementing projects under the 2004-2006 programs.
Verslo Zinios, Lietuvos Zinios

Tuesday, 8th of July

Achema launches new shop
Achema, Lithuania's nitrogen fertilizer and chemicals producer controlled by Achema Group, has ploughed LTL 133.5 million into new methanol shop. "New methanol shop has larger capacities. Moreover, it is more cost effective since it requires less energy resources and reduces the effects on environment to the minimum. The process of methanol production has been fully automated," Jonas Sirvydis, Achema CEO, said in a statement. The design capacities of new shop reach up to 130,000 tons per year. Achema is now implementing its second investment program, which is worth some LTL 500 million and should be completed by 2009.
Verslo Zinios

Vilnius Furniture presents figures
Vilniaus Baldai (Vilnius Furniture), one of Lithuania's leading furniture manufacturers, said on Friday that its first-half sales fell by 14.5 percent from a year earlier to LTL 63.59 million. Monthly sales for June slumped down to LTL 9.995 million, from LTL 14.14 million a year ago, the company said. The furniture manufacturer projecting a net profit of LTL 5.8 million for the full year 2008, on sales of LTL 199.5 million. Lithuania's investment company Invalda holds a 69.85 percent stake in Vilniaus Baldai, which is listed on the Main List of the Vilnius Stock Exchange.
Verslo Zinios

Agrowill Group buys 96.6 percent stake in Polva Agro
Agrowill Group, Lithuania's largest agricultural investment company, has bought a 96.6 percent stake in Polva Agro, one of the biggest and most efficient milk producers in Estonia, in a deal worth LTL 48.4 million. The Lithuanian company said on Friday that it had closed the Polva Agro acquisition deal the day before. "We believe in the growth potential of agriculture in Estonia and will use the company we have bought as the basis for further expansion. We are now considering several other acquisitions," Agrowill Group CEO Valentas Sulskis said in a press release. Agrowill Group said it had used its own resources and loans from Estonian banks to finance the acquisition of Polva Agro. The investment bank GILD was the company's financial advisor in the deal.
Verslo Zinios

Monday, 7th of July

State Holliday.

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