Observer "Lietuva"

Saturday 12th of April, 2003

Lietuvos Zemes Ukio Bankas posts a profit of LTL 8.7 million
Lithuania's Zemes Ukio Bankas, controlled by Germany's Nord/LB, earned an unaudited net profit of LTL 8.751 million in the first quarter of this year, up by 25.5 times from LTL 343,000 a year earlier.
"The first-quarter results are a good start showing the bank's financial potential to attain a stronger position on the market," Thomas Buerkle, chairman of LZUB' board, said.
In 2002, the bank posted an audited loss of 50.604 after forming provisions. Having offset last year's losses, LZUB still has an outstanding loss of LTL 22.019 million.
The bank, which will soon be renamed into Nord/LB Lietuva, is anticipating a net profit of LTL 8.3 million.
Buerkle said the bank's priority is housing loans. In January-to-March alone, the bank's housing loan portfolio increased by LTL 25 million.
As of late March, LZUB had assets of LTL 1.924 billion, a rise of 7 percent over one year. Its loan portfolio grew by 18.1 percent to LTL 1.115 billion, deposits increased by 7.1 percent to LTL 1.330. As of late 2002, LZUB had a 11.7-percent market share in terms of assets and a 11.6-percent market share in terms of deposits.
(Lietuvos Zinios, Lietuvos Rytas)

Gazprom wants cheap Lithuanian Gas
Russia's gas giant Gazprom offers only LTL 80 million for a 34-percent equity stake in the Lithuanian natural gas company Lietuvos Dujos (Lithuanian Gas) and believes that Lithuania will approve the terms. Meanwhile, the strategic investor, German consortium consisting of Ruhrgas and E.ON Energie paid LTL 116 million for their 34 percent stake in the Lithuanian company last year.
Rimandas Stonys, who represents Gazprom in the privatization process, claimed that the offer meets the major agreements with the government and that the price is reasoned economically. He expressed his believe that the privatisation marathon would finally end and the agreement would be concluded.
The Minister of Economy, Petras Cesna, said that the government would consider not only the price but also other terms. According to unofficial data, Gazprom agrees to supply 70 percent of natural gas directly to Lithuania, apart from deliveries to the local nitrogen fertilizer producer Achema and the Kaunas-based thermal power, provided that the government stops regulating prices for large-scale consumers.
(Kauno Diena, Lietuvos Zinios, Respublika)

Payment has been transferred
Lithuania's Kauno Termofikacine Elektrine (Kaunas Thermal Power Station), set up by a consortium led by Russia's Gazprom, on Friday transferred LTL 80 million as the payment for the thermal power plant in Kaunas to the municipal heating utility Kauno Energija. Under the sale/purchase agreement, another 10 million litas will go towards the recovery of Kauno Energija' debt to the natural gas company Lietuvos Dujos, with Gazprom selling LTL 10 million worth of gas to the Lithuanian company.
(Lietuvos Rytas)

Friday 11th of April, 2003

Export has been growing more rapidly
According to preliminary data of customs declaration, in January-February 2003, if compared to the same period last year, Lithuania's export and import rose by 38.8 and 7.1 percent respectively. Finance experts say that the sharp growth of export has been registered due to the poor export results at the beginning of last year.
Over the two months, Lithuania exported goods for LTL 3.708 billion while import accounted for LTL 4.154 billion.
According to the data provided by the Department of Statistics, the overall Lithuania's export surged by 40.9 percent while import grew by 8.7 percent in February this year, if compared to February 2002.
At the beginning of this year, Lithuania's largest export partners were Switzerland, accounting for 16.2 percent of the total exports, followed by Germany with 9.8 percent, Latvia with 8.7 percent, and Russia with 8.5 percent. Russia remained in top position in import rankings, accounting for 29.7 percent of Lithuania's total imports.
The export of investment goods more than tripled over the year, while the import of gasoline surged by 63 percent.
In January-February, Lithuania's structure of export goods remained steady; export of minerals (24.9 percent) and textile (14.4 percent) made the largest share.
(Respublika, Verslo ?inios, Lietuvos Rytas)

Lithuania is expected to show a rapid growth
The International Monetary Fund (IMF) forecasts that Lithuania's economic growth rate will be one of the highest among the EU candidate countries in 2003 and 2004, second only to Latvia's. In its latest World Economic Outlook report, the IMF predicts that Lithuania's gross domestic product (GDP) will grow by 5.3 percent this year and reach a 5.7 percent growth rate in 2004. The respective growth forecasts for Latvia are 5.5 percent in 2003 and 6.0 percent in 2004.
Lithuania's GDP grew by 6.7 percent last year, as against 6.1 percent in Latvian and 5.8 percent in Estonia. The Finance Ministry forecasts that Lithuania's economic growth rate will reach 4.9 percent this year and 5.4 percent in 2004, but the figures are likely to be revised upwards in the near term.
The IMF estimates that Lithuania's annual inflation should rise from 0.3 percent to 2.1 percent by the end of this year and advance further to 2.5 percent in 2004. Current account deficit is expected to increase from 5.4 percent to 5.8 percent this year, yet it is likely to decline down to 5.4 percent in 2004 again.
(Verslo Zinios, Lietuvos Rytas, Respublika)

Car dealers present latest models in the ALT 2003 car show
On Thursday, Vilnius exhibition centre Litexpo opened the 10th international automobile exhibition ALT 2003, the biggest automobile and transport exhibition in Lithuania ever. 190 companies will be presenting the latest models in the area of 25 thousand square metres.
The official importer of Peugeot automobiles, Zibintas, will present the powerful Peugeot 206 RC equipped with a 2-litre 177 HP engine while Toyota importers will introduce Toyota Avensis II.
Visitors of the car show will have an opportunity to see the wonderful BMW Z4, Nissan 350Z, Maserati Spyder, Citroen Pluriel, Ford StreetKa, Opel Vectra GTC, Subaru Impreza WRX and the luxurious Hyundai Centennial.
However, UAB Moller Auto that imports Volkswagen automobiles and UAB Keturi Ziedai selling Audi, refused participating in ALT 2003 claiming that it does not answer expectations.
"Since majority of new car dealers sell automobiles with only 5-8-percent mark-up; one can understand that more than 1,000 Mercedes Benz automobiles have to be sold in order to retrieve the money invested into the exhibition. However, only 187 of them were sold in Lithuania last year", they say.
(Kauno Diena, Verslo Zinios)

Thursday 10th of April, 2003

Lithuanian banks earned LTL 146.8 million last year
Lithuanian commercial banks posted a total audited profit of LTL 146.8 million for 2002, which is the best result after Lithuania's independence. The banks incurred a loss of LTL 24.1 million in 2001.
The Bank of Lithuania announced on Wednesday that eight banks and three departments of foreign banks worked profitably and earned LTL 205.1 million last year; Vilniaus Bankas earned LTL 126.5 million, Hansa-LTB – LTL 50.1 million, Snoras bank – LTL 10.5 million, Ukio bank – LTL 6.2 million, Siauliu bank – LTL 3.4 million, Parex bank – LTL 2.8 million, Medicinos bank – LTL 1.2 million and VB B?sto Kredit? ir Obligacij? bank – LTL 0.1 million. Meanwhile, Lietuvos Zemes Ukio Bankas, Sampo bank and the department of Nordea Bank Finland posted losses of LTL 50.6 million, LTL 4.9 million and LTL 2.8 million for 2002 respectively.
(Respublika, Lietuvos Rytas, Verslo Zinios)

Ice-cream producers' profit will depend on the sun and export volumes
In 2002, majority of Lithuania's ice-cream producers were working profitably; this year, the companies are planning to make profit not only by selling their production in trade centres but also by increasing export volumes. Ice-cream producers admit that hot summer helped them to earn profits last year and delayed consolidation of the market for some 3-4 years.
Kauno Pieno Centras has slightly changed the assortment and design and is planning to export some 15 percent of its ice-cream production this year.
UAB Ingman Vega has bought a new ice-cream packing line; last year, the company doubled its export and boosted its sales by 28 percent in the Lithuanian market.
UAB Kraitene is planning to raise its ice-cream sales by 25 percent this year, consolidate the position of Aurum and Tirpukas trademarks, expand its sales network in Lithuania and increase export volume. Last year, UAB Kraitene sold ice-cream for LTL 24.4 million.
AB Panevezio Pienas is planning to increase its production volume by 11 percent up to 2,300 tons this year; the company says that ice-cream is one of the most profitable products. Panevezio Pienas has allotted LTL 4.1 million for investments for 2003.
(Verslo Zinios)

Stumbras has earned over LTL 16 million
The largest Lithuanian alcohol beverage producer, Stumbras, posted an audited net profit of LTL 16.011 million and is planning to pay 7-percent dividends of the authorised capital. The company had posted unaudited profit of LTL 16.067 million.
In 2002, turnover of the company accounted for LTL 101.509 million.
Last year, Stumbras earned a net profit of LTL 15.649 million and also paid 7-percent dividends (LTL 6.229 million).
(Lietuvos Rytas)

Wednesday 9th of April, 2003

Profitability of Lithuania's economy made 3.8 percent
Over 2002, profitability of Lithuania's economy considerably increased: if compared to 2001, it rose by 3.1 percent points up to 3.8 percent.
According to preliminary data, the highest profitability rate was achieved in the sector of services; it accounted for 8 percent and was 4 times higher than in 2001.
Construction business has reached slightly lower profitability rate (3.7 percent) and was followed by industry (3.3 percent) and wholesale and retail sale (1.5 percent).
According to Algirdas Semeta, the CEO of the Department of Statistics, 58 percent of Lithuanian companies were working profitably in 2002; working proficiency rate increased from 6.1 to 9.7 percent over the year.
(Respublika, Kauno Diena, Verslo ?inios)

The best exporters
In the group of large companies (employing more than 250 people), the following Lithuanian companies were acknowledged the best exporters for 2002: the fridge manufacturer Snaige, the leading electronics company Vilniaus Vingis, the largest linen producer in the Baltic states Linas, the fertiliser producer Achema, one of the largest Lithuanian furniture manufacturers, Klaipedos Baldai and other companies.
Meanwhile, the producer of plastic bottles preform, Putoksnis, the largest upholstery fabrics' producer in the Baltics, Audejas, also Skalmantas, Atrama, Fermentas, Paroc and other companies were acknowledged the best exporters among middle-size companies (50 to 250 people) last year.
(Kauno Diena, Lietuvos Rytas)

Hansa-LTB posted a profit of LTL 18.7 million
Hansa-LTB, Lithuania's second-biggest commercial bank owned by Estonia's Hansapank, posted a net profit of LTL 18.7 million for the first quarter of 2003, compared to a net profit of LTL 8.462 million over the same period in 2002.
Hansa-LTB is projecting a net profit of LTL 37.1 million for the full year 2003, down from the 2002 net profit of LTL 50.129 million.
According to the data provided by the Bank of Lithuania, Hansa-LTB had assets of LTL 4.149 billion as of late February 2003, which represented 26.8 percent of the total assets of the Lithuanian banking system.
As of March 1, Hansa-LTB had a 22.3 percent share of the Lithuanian loan market with LTL 1.634 billion worth of loans and a 32.5 percent share in the deposit market with LTL 3.585 billion in deposits.
(Lietuvos Zinios, Lietuvos Rytas)

0.3-percent inflation was registered in March
Consumer price index in Lithuania rose by 0.3 percent in March. According to the data provided by the Statistics Department, prices of consumer goods rose by 0.3 percent while those of services increased by 0.1 percent.
The department had forecast zero percent inflation for March. However, proves decreased over the year period, that is, the annual deflation in March 2003 (if compared to March 2002) accounted for 1.1 percent.
The drop of foodstuff and soft drinks prices was extremely noticeable; prices of clothes and footwear have considerably declined, too.
Algirdas Semeta, the CEO of the Department of Statistics, has reported that a 0.4 percent rise in prices of foodstuffs and non-alcoholic beverages, a 0.9 percent rise in transport costs, including a 4.5 percent rise in diesel fuel and a 1.2 percent increase in gasoline prices, as well as a 0.7 percent rise in clothing and footwear prices had the biggest impact on consumer prices in March.
In the services sector, the steepest drop was recorded in dry cleaning costs. Household maintenance and repair costs rose by 0.5 percent.
(Respublika, Verslo Zinios)

Tuesday 8th of April, 2003

Linas has renounced observers' board
Lithuanian linen producer AB Linas decided in the shareholders' meeting to renounce the observers' board and oblige a board of 3 people to control the company. In the meeting, the results of 2002 were confirmed. After the unsuccessful year 2001 when the company incurred a loss of LTL 5.1 million, Panevezys-based company AB Linas posted a net profit of LTL 2.9 million for 2002. Last year, the company provided services and sold production for LTL 69.88 million, an increase of 2.5 percent from 2001. The profit will be used to cover previous losses; no dividends will be paid.
Zibute Gaiveniene, CEO of Linas, says that the successful activities were predetermined only by the company's capability to find new markets and expand them. "The government has not improved export conditions or business environment as yet", she said.
Last year, Linas managed to raise considerably its sales in Sweden up to 34.5 percent; the new markets in Great Britain and Belgium were also successfully developed. According to Gaiveniene, AB Linas seeks to reach turnover of LTL 72.3 million and earn a pre-tax profit of LTL 3.5 million this year.
Last year, the company invested LTL 4.1 million while this year it is planning to allot LTL 2.3 million.
(Verslo Zinios)

VP Market's turnover grew by 18 percent over the first quarter
Lithuania's VP Market, the operator of the largest retail chain in the Baltic countries, reported total sales of LTL 791.12 million (EUR 229.12 million) for the first quarter of 2003, an increase of 18.2 percent if compared to the first quarter in 2002 when the figure accounted for EUR 193.8 million.
Turnover of the company is growing following the anticipations expressed at the beginning of the year. VP Market is planning to reach turnover of EUR 1 billion in all three Baltic countries in 2003.
Last week, the group opened two new stores – a Minima store in Vilnius and a T-Market store in Latvia. VP Market now operates a chain of 219 stores in the three countries, including 167 stores in Lithuania, 51 in Latvia, and one in Estonia.
VP Market posted total sales of around EUR 880 million for the year 2002.
(Respublika, Lietuvos Zinios)

Gambling has filled the state budget
Over the first quarter of this year, Lithuania's budget received an income of LTL 1.5 million from gambling business. In 2002, the state budget received LTL 2.6 million. It is forecasted that this year, gambling business will bring some LTL 8 million to the state budget even though LTL 15 million were anticipated.
Lithuania's residents left some LTL 12 million in gambling rooms last year.
Presently, 5 casinos, 13 gambling machine rooms and 15 betting points are operating in Lithuania.
Gambling law came to force in Lithuania on July 1, 2001 while the first gambling room was opened in February last year.
(Lietuvos Zinios, Respublika, Lietuvos Rytas, Verslo Zinios)

Banks' provisions will decline in autumn
This autumn, the bank of Lithuania is going to reduce the required provisions by 1.5-2 percent, which would allow credit institutions to dispose additional LTL 270 million.
"As yet, the required provision rate is higher in Lithuania than in the European Union, therefore, we will be reducing it", the board chairman of the Bank of Lithuania, Reinoldijus Sarkinas, says. Over the two coming years, the obligatory provision rate will be reduced from the present 6 percent down to 2 percent.
Jonas Irzikevicius, the head of Vilniaus Bankas Treasury Department, says that this will positively affect the Lithuanian banking market; the money will be used for crediting or other projects. Sarkinas forecasts that this year, expansion of the banking sector in Lithuania will be similar to that of last year.
Last year, assets of the Lithuanian banks rose by 12.2 percent up to LTL 17.2 billion while the overall loan volume increased by 22 percent up to LTL 7.9 billion.
(Verslo Zinios)

Monday 7th of April, 2003

Alna is entering Scandinavian market
Lithuanian IT company Alna seeks to consolidate its position in the Scandinavian market and increase number of programmers by at least 1.5-2 times over the coming two years. In the first quarter of this year, Alna exported services for LTL 1.2 million, a rise of 15 percent if compared to the respective period in 2002.
"Over the two years of active development we expect to become a serious player in the market of Northern countries", Steve Grossman, the sales and marketing manager at Alna, says.
Presently, Alna employs 80 programmers; another 250 programmers from Lithuania, Ukraine and Byelorussia can be invited for particular projects.
Robertas Zapolskas, Finasta's finance analyst, says that it would be difficult for the company to take a strong position in the Northern countries without having a solid partner as a lot of strong software producers work in Scandinavia. Alna's services are acknowledged in Lithuania, yet it is not clear whether the company is ready to work at the level of Northern countries, the analyst says.
(Verslo Zinios)

A ship for Norwegians has been built in Lithuania
Lithuanian shipbuilding company, Vakaru Laivu Gamykla (VLG), which belongs to the Estonian BLRT Grupp AS group, has completed one of the largest shipbuilding projects in Lithuania. Body of the ship that was built under the order of the Norvegian company Sira offshore AS, was launched from the new VLG's floating dock last Friday.
It took eight months for specialists of Vakaru Laivu Gamykla to construct the body of the oil platform supply ship. The company has implemented 15 shipbuilding projects so far. Preliminary weight of the new ship body is 1,370 tons.
According to Arnoldas Sileika, the CEO of Vakaru Laivu Gamykla, shipbuilding is a strategic sector in the company's activities and an exceptional attention is paid to that.

Ignalina Nuclear Power Plant produced more electricity
Ignalina Nuclear Power Plant produced a total of 4.982 billion kilowatt-hours (kWh) of electricity during the first quarter of 2003, a 28 percent increase from 3.888 billion kWh in the same period of 2002.
In March, the plant boosted its electricity output by 23.3 percent, year-on-year, to 1.537 billion kWh, Ina Didziulyte, an INPP spokeswoman, has reported.
Currently, Ignalina's Unit 1 operates at a capacity of 1,325 megawatts. With one of its two turbo-generators closed for maintenance, Unit 2 operates at a capacity of 750 megawatts.
The second generator is scheduled to be stopped on April 5. Unit 2 is to be put back into operation on July 3. The plant's annual output is projected to reach 14.4 billion kWh of electricity this year.
(Lietuvos Zinios)

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