Observer "Lietuva"

Lithuania Business News: Archive 2003-

WEEK 46.2008

Saturday, 15th of November

Average milk purchase price grows
The average natural milk purchase price in Lithuania reached LTL 824.9 per ton in October, up by 0.63 percent from September but down by 20.6 percent compared with a year ago, the Agriculture Ministry reported on Friday. The total volume of natural milk purchased from farmers in October rose by an annual 1.9 percent to 124,330 tons. In January-October, milk purchase volumes increased by 2.8 percent year-on-year to 1.195 million tons, it said.
Respublika, Lietuvos Rytas

Anti crisis plan
The centre-right coalition being established in Lithuania aims to overcome economic stalemate and financial crisis with extensive cost-saving measures and a tax reform. The effects of the reform are seen generating up to LTL 2 billion in revenues, while the financial effects of the whole package should reach up to LTL 5.3 billion.
On Friday the coalition partners put the final touches in two-week-long talks on an anti-crisis plan. Contrary to earlier statements, they did not initial the document, however. Coalition leader Andrius Kubilius announced that all coalition documents would be signed on Monday. In line with the plan, additional budget revenues would total LTL 2 billion, while further LTL 2 billion would be saved via the reduction of expenditures in the public sector and elimination of exemption. Some LTL 1.3 billion would be obtained via the sale of government's shares in Mazeikiu Nafta (Mazeikiai Oil) and reduction in the percentage part of social contributions transferred to private pension funds, he confirmed.
Lietuvos Rytas, Lietuvos Zinios, Respublika

Currency in circulation grows
Currency in circulation in Lithuania reached LTL 9.7 billion in late October, up by LTL 618.9 million compared with a month ago, the central bank reported on Friday. Residents' deposits with the Bank of Lithuania rose by LTL 66.2 million over the month to LTL 5.2 billion and other deposits were up by LTL 31.5 million to LTL 3.3 billion. Central government deposits increased by LTL 30.5 million to LTL 1.9 billion. The central bank's external assets grew by LTL 754.9 billion in October from September to LTL 16.5 billion. Its external liabilities widened by LTL 85 million to LTL 154.1 million.
Respublika

Friday, 14th of November

Mazeikiai Oil reports figures
Lithuania's only oil refinery Mazeikiu Nafta (Mazeikiai Oil), which is controlled by Poland's PKN Orlen, on Thursday reported LTL 220.5 million in consolidated net profits for the first nine months of this year, up 59 percent from LTL 138.3 million a year earlier. Revenue for the nine months soared by 110 percent year-on-year to LTL 14.4 billion. Profit before interest and taxes (EBIT) was up 140 percent to LTL 340.1 million, the company said in a press release. "Efficiency improvement measures, which we have been implementing since the start of the year, are producing results: higher utilization of refining capacities, and growth in productivity and efficiency of the company's operations," Mazeikiu Nafta CEO Marek Mroczkowski said in a press release. Mazeikiu Nafta posted 32.06 million US dollars in net profits for the full year 2007, on revenue of 3.428 billion dollars. PKN Orlen holds a 90.02 percent stake in the oil refining and transportation complex, with the remaining shares owned by the Lithuanian government.
Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas, Respublika

Central government collected LTL 16,242
The Lithuanian central government collected LTL 16.242 billion in budget revenue during the first ten months of this year, missing its revenue target for the period by LTL 574.7 million, or 3.4 percent, the Finance Ministry reported on Thursday. In October alone, budget revenue came in at LTL 1.725 billion, falling LTL 531.8 million, or 23.6 percent, short of the target, it said. The ministry attributed the revenue shortfall in October to the unfavourable situation in export markets, stagnation in the country's real estate market and lower investment expenditure. Overall budget revenue for October, including LTL 26.1 million in EU assistance money, amounted to LTL 1.751 billion. Total revenue for the first ten months, including LTL 3.098 billion in EU aid, came to LTL 19.522 billion. The 2008 central government budget projects annual revenue of LTL 25.572 billion, including LTL 5.113 billion in support funds from the EU and other foreign countries.
Verslo Zinios, Lietuvos Rytas, Respublika

Topo Centras will exit from Latvia
Topo Centras, Lithuania's largest household appliance and electronics chain, will exit from Latvia's slowdown-hit retail market through bankruptcy, but will stay in the neighbouring country's wholesale trade sector, AG Group, the chain's owner, said. AG Trade, a company owned by AG Group, has applied for insolvency proceedings to be opened against Topo Centrs, the group's Latvian retail chain, which is a legal way of suspending the operations of an insolvent business and seeking its closure, AG Group said. The Lithuanian group will stay away from the Latvian retail market for some time and will focus on its wholesale operations in the neighbouring country. It is also looking to consolidate its positions in Lithuania. "The situation in Latvia gives no grounds for us to worry about our positions in Lithuania: we are feeling very strong here and definitely have no intention to slow our pace down," Topo Centras CEO Ceslovas Steigvila said.
Lietuvos Rytas

Thursday, 13th of November

Inflation rate grows
Lithuania's average annual inflation rate, as measured by the EU Harmonized Index of Consumer Prices (HICP), reached 11 percent in October, 0.2 points higher than that measured by the national CPI, the Statistics Department reported on Wednesday.
The HICP-measured average 12-month inflation rate is one of the key indicators for countries wishing to join the euro zone. The monthly inflation rate, as measured by the HICP, stood at 0.9 percent (0.1 points lower) and the annual inflation rate was 10.7 percent (0.2 points higher), the statistics office said.
Verslo Zinios, Lietuvos Zinios

Current deficit widens
Lithuania's current account deficit for the first nine months of this year reached LTL 11.56 billion, widening by LTL 921.9 million, or 8.7 percent, compared with the same period last year, the central bank reported on Wednesday. It was calculated that the current account deficit for the first three quarters of the year accounted for 13.9 percent of the gross domestic product. Based on preliminary estimates, the deficit for the third quarter stood at LTL 2.17 billion, accounting for 7.2 percent of GDP, the Bank of Lithuania said.
Verslo Zinios

If Insurance posts figures
If Draudimas (If Insurance), Lithuania's non-life insurer that is part of Scandinavia's general insurance group If P & C Insurance, posted LTL 6.2 million in net profit for the first nine months of this year, up 26.5 percent from the year-earlier figure of LTL 4.9 million. The amount of premiums written by the company increased by 20 percent, year-on-year, to LTL 110.7 million in January-September, If Draudimas said in a statement. The company currently holds some 9.8 percent of Lithuania's non-life insurance market. If P & C Insurance, which renders services to some 3.6 million customers in Scandinavia and the Baltic countries, reported LTL 1.4 billion in pre-tax profit for January-September.
Verslo Zinios

Wednesday, 12th of November

The consumer prices grow
With the prices of household maintenance, food and drinks climbing higher, the consumer prices rose by 1 percent in Lithuania in October from September, the country's Statistics Department reported. Annual inflation made up 10.5 percent in October, while the twelve-month average was 10.8 percent, it said. The department earlier projected that the monthly inflation would reach 0.7 percent in October, while the annual and the twelve-month average rates would be 10.45 percent and 10.98 percent, respectively. In October, the rise of consumer prices mostly resulted on a 5.2 percent increase in the prices of housing, water, electricity, gas and other fuel and a 0.9 percent rise in the prices of foodstuffs and soft drinks. The increase was somewhat offset by a 3.2 percent decline in the prices of transport goods and services. The prices of consumer goods rose by 1 percent over the month and by 9.9 percent versus October 2007. The prices of services increased by 1.9 percent month-on-month and 12.5 percent year-on-year.
Lietuvos Rytas, Kauno Diena, Respublika, Verslo Zinios

No information about digital television
A majority of the Lithuanian population say they do not have enough information about the planned switch from analog to digital television in 2012, with people in rural areas feeling the least informed about it, a TNS Gallup survey has shown. "Only 19 percent of the population say that they have sufficient information about digital television which is being phased in Lithuania," Nerijus Ivanauskas, the chief marketing officer of Teo LT, said while presenting the results of the survey on Tuesday. The situation is even worse in rural areas, where only 12 percent of the population feel that they have enough information about digital TV, he told reporters. Teo LT currently has a total of 50,000 digital TV customers, including 18,000 digital terrestrial television users and 32,000 fixed-line broadband television (IPTV) users, Zygintas Peciulis, a TV expert, said during the presentation.
Lietuvos Rytas, Verslo Zinios

Siauliai Bank revises its forecasts
Eyeing economic slowdown, Siauliu Bankas, the fast growing Lithuania's commercial bank, has revised its 2008 profit forecast down to LTL 19-20 million, from LTL 32 million. The bank reported LTL 17.416 million in net profit for the first nine months of this year, down 28 percent from the year-earlier figure of LTL 24.203 million. Consolidated profit of Siauliu Bankas group plunged by 28.7 percent, to LTL 16.31 million in January-September. Siauliu Bankas is quoted on the Main List of Vilnius Stock Exchange (VSE).
Respublika

Tuesday, 11th of November

The new decisions of the government
The Lithuanian government is likely to transfer its 17.7 percent stake in the natural gas import and distribution company Lietuvos Dujos (Lithuanian Gas) to Gamtiniu Duju Terminalas (Natural Gas Terminal), a company set up to operate a planned liquefied natural gas (LNG) import terminal, as the state's contribution to its capital. The Cabinet on Wednesday is expected to approve a decision to increase in the authorized share capital of Gamtiniu Duju Terminalas through the contribution of 83,030,367 shares in Lietuvos Dujos with a nominal value of one litas. The government's Strategic Planning Committee endorsed this decision in early November, Transport Minister Algirdas Butkevicius said. Gamtiniu Duju Terminalas was established last month with an authorized share capital of LTL 100,000. The state holds an 80 percent stake and the fertilizer manufacturer Achema owns the remaining 20 percent of the shares. Neringa Pazusiene, the director of the Law and Public Procurement Department at the Lithuanian Economy Ministry, said that the overall size of the share capital increase would be known after the shares had been valued.
Kauno Diena

The government plans selling 10 percent of Mazeikiai Oil
Lithuania's incoming centre-right government plans to sell almost 10 percent of Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil-refining complex, in 2009 and expect to rake in about LTL 763.6 million from the transaction. The sale has been included in the plan of anti-crisis measures being worked out by the coalition. The deal would enable the authorities to implement a provision included in the package of agreements on the purchase and sale of 30.66 percent of Mazeikiu Nafta, which the government and Poland's oil concern PKN Orlen signed back in 2006. In line with that provision, if the government sells the remaining 10 percent stake in Mazeikiu Nafta before the expiry of a three-year term (i.e. by mid-December 2009), the share price shall be USD 4.0205, i.e. the total amount shall be USD 284.450 million, or approximately LTL 763.6 million. PKN Orlen has a pre-emptive right to buy the government's shares in Mazeikiu Nafta unless the Cabinet decides to sell the shares publicly.
Lietuvos Zinios

Ukio Bank reprots figures
Ukio Bankas, the fast-growing Lithuanian commercial bank, reported LTL 92.6 million in unaudited net profit for the first ten months of this year, up 25.7 percent from the year-earlier figure of LTL 73.6 million. Last year the audited net profit of the bank soared to LTL 82.724 million, from LTL 47.383 million in 2006, while the net profit of the whole group grew to LTL 77.351 million, from LTL 43.485 million a year earlier. Ukio Bankas is projecting the net profit of LTL 91.5 million for full 2008, yet the bank's representatives claim that the annual target will be exceeded as a result of one-off gain on the sale of property in Moscow. Verslo Zinios, Lietuvos Rytas

Monday, 10th of November

Mazeikiai Oil reorganizes
PKN Orlen's Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil) is increasing the role of the supervisory board in its management and expanding the powers of the board of directors. From now on, all companies of the Orlen Group will operate under the same corporate governance model, Mazeikiu Nafta said in a press release. The company on Friday registered new Articles of Association. Its supervisory board appointed new members to the board of directors, including Mazeikiu Nafta CEO Marek Mroczkowski, deputy CEOs Waldemar Lota and Jacek Tomasz Szafranski, and the company's CFO, Vita Petrosiene. Under the new Articles of Association, the board of directors of Mazeikiu Nafta will be responsible for day-to-day operations of the company and will perform similar functions as the management boards of PKN Orlen and its Czech refinery Unipetrol, according to the press release.
Respublika

Lithuania’s exports increases
Lithuania's exports increased by 33.8 percent in the first nine months of this year from a year earlier, to LTL 43 billion, while the imports rose by 23.6 percent, to LTL 56.296 billion, the Statistics Department reported on Friday. The country's foreign trade deficit narrowed by 1 percent over the reporting period, to LTL 13.26 billion, according to preliminary data based on customs declarations and Intrastat reports. Russia remained Lithuania's biggest export partner in January-September, accounting for 15.4 percent of all exports, followed by Latvia with 11.5 percent, Germany with 7.2 percent and Poland with 5.8 percent.
Verslo Zinios

The shares of Dvarcionys Ceramics is being bought
Poland's ceramic tile manufacturer Cersanit is set to buy out the remaining shares in Lithuania's Dvarcioniu Keramika (Dvarcionys Ceramics) at LTL 3.66 a share. The Lithuanian Securities Commission on Friday approved a circular for Cersanit's mandatory tender offer, the Vilnius Stock Exchange (VST) announced. Dvarcioniu Keramika's shares traded for LTL 3.50 on Friday. If all minority shareholders agreed to sell their shares to Cersanit that would cost the Polish company a total of LTL 7.896 million. Cersanit currently holds a 78.22 percent stake in the Lithuanian ceramic tile manufacturer.
Verslo Zinios


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