Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 30.2008

Saturday, 26th of July

Zemaintijos Pienas in red
Zemaitijos Pienas, one of largest Lithuania's dairy groups, reported LTL 10.4 million in unaudited consolidated losses for the first half of this year, reversing the year-earlier consolidated profit of LTL 6.2 million. Consolidated interim sales rose by 15.8 percent, year-on-year, to LTL 234.9 million, the group said in a statement. In 2007 the group raised the audited sales by 21.1 percent, to LTL 464.2 million, as its net profit soared by 90 percent, to LTL 24.51 million. Zemaitijos Pienas was 40.74-percent owned by CEO Algirdas Pazemeckas as of late 2007.

Predictions of the Bank of Lithuania
The Bank of Lithuania has cut the forecast for the country's 2008 Gross Domestic Product (GDP) growth to 6 percent, from 6.6 percent projected in April. The 2009 forecast, however, was upped to 4.2 percent, from 3.9 percent. The forecast for 2008 average annual inflation was revised up to 11.8 percent, from 9.8 percent, for 2009 - to 7.8 percent, from 6.3 percent projected in April. The Bank of Lithuania sees the unemployment rate growing from 5.5 percent this year (5.2 pct - April forecast) to 6 percent in 2009 (5.4 pct - April forecast). The growth of average wages is expected to slow down to 5.7 percent in 2009 (6.2 pct - April forecast), from 18 percent this year (15.4 pct - April forecast). The current account deficit should reach 13.5 percent of GDP this year (11.9 pct - April forecast) and decline to 10.8 percent of GDP (10.6 pct - April forecast) in 2009.
Lietuvos Rytas, Respublika

Purchase prices for agricultural products shrank
The purchase prices of agricultural products shrank by 0.5 percent in Lithuania in June versus the year-earlier, the Statistics Department reported on Friday. The prices of crop sector products plunged by 11.1 percent over the year, although the decline was offset by a 21.2 percent rise in the prices of livestock and stockbreeding products, the department said. In June versus May, the purchase prices of agricultural products rose by 1 percent.
Lietuvos Rytas

Friday, 25th of July

Akropolis presents numbers
The Akropolis retail and entertainment malls in Vilnius, Kaunas and Klaipeda drew 19.3 million visitors in the first half of this year, up 23.7 percent year-on-year, while the combined revenues of the malls' tenants increased by 33 percent, to LTL 960.2 million. In 2007 the malls attracted 36.7 million visitors and the combined turnover of the mall's tenants totaled LTL 1.79 billion. Akropolis is controlled by Vilniaus Prekyba group, which also runs Maxima LT, the largest Baltic retailer, and the drugstore chain Eurovaistine.
Respublika, Lietuvos Rytas

Bite Lietuva reports figures
Lithuania's telecommunications company Bite Lietuva reported LTL 355 million in revenues for the first half of this year, up 7.1 percent year-on-year. EBITDA of the operator stood at LTL 83.6 million. The revenues of Bite were LTL 181 million during the second quarter of the year, which was by 4.7 percent bigger than last year at the same time. The increasing number of clients of the operator influenced the growth of its revenues. The interim revenues of Bite Latvija, the group's Latvian subsidiary, soared by 37.1 percent, year-on-year, to LTL 34.2 million. Bite Group is 100 percent owned by private equity company Mid Europa Partners.
Verslo Zinios, Kauno Diena, Lietuvos Rytas

Review on Lithuanian banks
The trends in performance of Lithuania's commercial banks should remain largely unchanged in the second half of this year, compared with January-June, the Bank of Lithuania governor Reinoldijus Sarkinas projects. "The trends will be similar to the first half of the year and the growth of loan portfolio may even slow down - everything will depend on the economic context," Sarkinas said. The effects of subprime crisis, which erupted in the US last year and affected major European banks, would hardly reach Lithuania, he believes. Commenting on the slowdown in the growth of loan portfolio in the first half of this year Sarkinas claimed this was a good sign. "The banks have imposed more stringent requirements, thus the loan flow declined - the total amount issued in the first half is LTL 0.7 billion smaller compared with the year-earlier. Sarkinas said.
Lietuvos Zinios, Verslo Zinios

Thursday, 24th of July

Small business is not keen in insurance
A survey ordered by Lietuvos Draudimas and carried out by RAIT revealed that 10 percent of small companies are thinking about purchasing insurance only when the losses are predictable while 18 percent of companies would consider purchasing insurance only after an accident. 40 percent of small companies in Lithuania will generate no profit this year and only 30 percent of respondents have some assets in reserve. According to statistics, more than 10 percent of small companies could not handle losses as big as 10 percent of annual turnover. Arunas Raziunas, head of business risk department at Lietuvos Draudimas, the average annual turnover of small company in Lithuania amounts to LTL 1.5 million, therefore 10 percent of the sum would be LTL 150,000.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Verslo Zinios

Teo LT reports figures
Lithuania's integrated telecommunications group Teo LT reported LTL 89 million in unaudited net profit for the first half of this year, up 16 percent from the year-earlier figure of LTL 77.028 million. The revenues of the group rose by 8.3 percent, to LTL 410.11 million, from LTL 378.786 million in January-June 2007, Teo LT said in a statement. The company's revenues on Internet and data transmission services rose by 22.4 percent, year-on-year, to LTL 122.416 million or 29.8 percent of the total revenue figure. Revenues on landline services, which accounted for 63.2 percent of the total revenue, shrank by 1.1 percent compared with the year-earlier, to LTL 259.33 million.
Lietuvos Rytas, Respublika, Verslo Zinios

Leo LT has a subsidiary
Lithuania's national investor company Leo LT has established an international links subsidiary InterLinks, which will implement the projects on the interconnection of Lithuania's electricity transmission grids and those of other energy systems. Leo LT, the sole shareholder of InterLinks, held a founding meeting on Wednesday and appointed Saulius Specius, Leo LT board member and strategic projects director, to head the new subsidiary, Leo LT said in a statement. "Newly established company will work out the strategy of projects implementation and will decide which projects should be coordinated and how," the statement quoted Rymantas Juozaitis, Leo LT chairman and CEO, as saying. InterLinks would first focus on the link with Sweden and decisions on other connections would follow, he added.
Verslo Zinios, Lietuvos Zinios, Respublika

Wednesday, 23rd of July

Aurela acquired one more plane
Lithuania's private charter carrier Aurela has acquired the second Boeing 757-200 aircraft for LTL 100 million. The new aircraft manufactured in 2000 is the newest in its class both in Lithuania and across the Baltic countries, Aurela's executives have said in a statement. The new plane would also be used on charter flights ordered by European customers, Aurela's CEO Valdas Barakauskas said. Boeing 757-200 has 217 passenger seats and may cover a distance up to 8,000 kilometers without landing. Aurela purchased its first Boeing 757-200 for LTL 100 million in February.
Lietuvos Rytas

Agrowill Group will issue new shares
Agrowill Group, Lithuania's largest agricultural investment and development company, will issue new shares, two-thirds of which will be acquired by the company's largest single shareholder, ZIA Valda, which will effectively raise its stake in the company to almost 32 percent. On Monday the shareholders of Agrowill Group approved the placement of LTL 4.635 million par value share issue, which will be subscribed at LTL 5.8 per share. Overall receipts on the issue will total LTL 26.883 million. ZIA Valda, which owns 25.97 percent of Agrowill Group, got a green light to acquire two-thirds of new share issue for LTL 17.922 million.
Verslo Zinios

Thoughts about the referendum
Vilnius should not expect the European Union (EU) to change its approach towards the closure of Ignalina Nuclear Power Plant (INPP) after the advisory referendum due to take place in Lithuania in October, Kestutis Sadauskas, the head of the European Commission (EC) Representation in Lithuania, warns. "I will participate for sure since I always go to cast my vote. This time I will choose the answer as obliged by the European legislation, i.e. the answer "no". Since such is the law. And compliance with laws is a foundation of a civilized society," Sadauskas said. INPP would have to be switched off on December 31, 2009 since there were no legal or physical possibilities to amend the EU Accession Treaty, he added. "This is Lithuania's obligation entered into the Accession Treaty. Besides, the provisions of the treaty do not allow departing from this commitment. It cannot be amended if at least one EU Member State speaks against it," the diplomat said.
Verslo Zinios

Tuesday, 22nd of July

Establishment of Leo LT subsidiary
Lithuania's national investor company Leo LT intends to establish Tarptautiniu Jungciu Kompanija (International Links Company or TJK), the international links subsidiary, later this week. The founding meeting of the new company was scheduled for Wednesday, while the by-laws of the new entity would be signed on Tuesday, Aurelija Trakseliene, communications director at Leo LT, said. Saulius Specius, Leo LT director for strategic projects, would be appointed on Wednesday as acting head of new subsidiary, which would be tasked with the building of power link with Sweden and implementation of projects involving the construction of power bridges with other European Union (EU) Member States. The new subsidiary would have the authorized capital of LTL 500,000.
Verslo Zinios, Respublika

Vilnius Furniture reported figures
Vilniaus Baldai (Vilnius Furniture), the leading Lithuania's furniture manufacturer, reported LTL 3.743 million in losses for the first half of this year, reversing year-earlier profit of LTL 674,000. The company's earnings before interest, taxes, deterioration and amortization (EBITDA) made up LTL 3.82 million in January-June. Losses attributable to Giriu Bizonas, which Vilniaus Baldai owns 25 percent interest in, exceeded LTL 2 million in the reporting period. Nerijus Pacevicius, Vilniaus Baldai CEO, admitted that the company had raised too ambitious targets and would need to revise the projections for 2008. Earlier the company projected the net profit of LTL 5.8 million, EBITDA of LTL 19.96 million and the sales of LTL 199.5 million for 2008.
Verslo Zinios, Respublika

Snaige is to increase its authorised share capital
Snaige, the sole refrigerator manufacturer in the Baltics, is to increase its authorized share capital through a new share issue with a face value of LTL 4 million. The shareholders put the issue price of the new shares at LTL 2.50 a share at Monday's meeting. The company may raise up to LTL 10 million l on the new issue and boost the authorized capital to LTL 27.827 million. Snaige is quoted on the blue-chip Main List of the Vilnius Stock Exchange. As of Dec. 31, 2007, the company's major shareholders included customers of Estonia's Hansabank with a 47.39 percent stake, Survesta, a company controlled by Hermis Capital, with 20.71 percent, and Skandinaviska Enskilda's customers with 10.65 percent.
Lietuvos Rytas, Verslo Zinios

Monday, 21st of July

Maxima Group reports figures
Maxima Group, the largest retailer in the Baltics, reported LTL 4.794 billion in sales in Lithuania, Latvia, Estonia and Bulgaria in the first half of this year, up 31.6 percent year-on-year. "Although our results are solid, we have noticed a slowdown in the growth of consumption in Lithuania, Latvia and Estonia," Gintaras Marcinkevicius, Maxima Group CEO, said in a statement. The sales of Maxima LT, the Lithuanian unit of the group, rose by 31.8 percent, year-on-year, to LTL 3.07 billion while the sales of Maxima Latvija expanded by 24.1 percent, to LTL 1.16 billion. The sales of Maxima Eesti increased by 50.5 percent, to LTL 454 million, and Maxima Bulgaria - by 33.9 percent, to LTL 103 million.

Mazeikiai Oil announced figures
Lithuania's sole oil refinery, Mazeikiu Nafta (Mazeikiai Oil), said on Friday that it processed 4.7 million tons of crude oil and other feedstock in the first half of this year, up 40 percent from LTL 3.2 million in the same period last year, when the plant operated at reduced capacity. Mazeikiu Nafta CEO Marek Mroczkowski attributed the increase in refining volumes to the restarting of the refinery's vacuum distillation unit, which had been damaged in an October 2006 fire, early this year and to the launch in 2007 of the modernization process. Mazeikiu Nafta expects to process around 10 million tons of crude oil in the full year 2008. The company receives all of its crude oil via the Butinge offshore terminal.
Respublika, Verslo Zinios

Utenos Knitwear posts sales
Lithuania's largest knitwear manufacturer, Utenos Trikotazas (Utena Knitwear), posted on Friday a 12.7 percent year-on-year decline in first-half sales to LTL 52.9 million. Utenos Trikotazas CEO Gintaras Pileicikas attributed the declined in revenue to a fall in sales experienced by most of the company's customers. "Being international market players, we are feeling the pinch of the general downturn in the European retail market," he said in a press release. Utenos Trikotazas posted LTL 7.791 million in consolidated losses for 2007, as annual sales fell by 16 percent to LTL 137.541 million.
Respublika, Verslo Zinios

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