Observer "Lietuva"

Saturday 19th of April, 2003

Retail trade turnover has grown by 10 percent
According to preliminary data provided by the Department of Statistics, turnover of retail trade companies accounted for LTL 2.41 billion in January-February this year, an increase of 9.4 percent if compared to the respective period in 2002.
The executive general of the Department of Statistics Algirdas Semeta has reported that turnover of companies selling food rose by 9.1 percent while that of selling non-food increased by 4.2 percent.
Turnover of restaurants and bars constituted LTL 70.6 million in January-February this year, a rise of 9.7 percent from 2002; turnover of the largest restaurants grew the most (34.8 percent).
In February, if compared to January, turnover of retail trade (excluding motor vehicles) dropped by 4 percent.

LAL posted a profit of LTL 39.9 million for 2002
The national air carrier Lietuvos Avialinijos (Lithuanian Airlines or LAL) reported an audited net profit of LTL 39.924 million for 2002, based on Lithuanian accounting principles, on revenues of LTL 266.3 million.
LAL posted an audited loss of LTL 33.396 million and revenues of LTL 232.5 million in 2001. The company's revenues from the core business amounted to LTL 10.272 million. According to the data provided by the State Audit Office, some LTL 23.4 million, representing more than 50 percent of the 2002 earnings, was received from the sale of Heathrow take-off and landing slots to British Airways.
(Lietuvos Zinios)

Lithuanian Gas controlled 27 percent of the market
Lithuania's natural gas distribution and transportation company Lietuvos Dujos (Lithuanian Gas), undergoing privatization, sold 271.5 million cubic meters of gas in the first quarter of this year, up by 46.4 percent compared to the respective period last year. Lietuvos Dujos transported 755 million cubic meters of gas to consumers that buy gas from other suppliers in the three months, up by 12.3 percent year-on-year. Rising gas consumption in the first quarter of 2003 was attributed to a growing number of consumers and the fact that Lithuania had the coldest weather in January-March over the past five years.
In March, Lietuvos Dujos sold 88.8 million cubic metres of gas directly to users (a rise of 52.1 percent) and transported 219.7 million cubic metres of gas (0.7 percent).
This year, Lietuvos Dujos controlled 27.1 percent of the natural gas market in Lithuania.

Friday 18th of April, 2003

Turnover of Sonex Grupe rose by 18 percent
One of the largest Lithuanian IT companies, Sonex Grupe, posted turnover of LTL 27 million for the first quarter of this year, a rise of 17.9 percent if compared to the respective period last year when the figure accounted for LTL 22.9 million.
This year, the company is planning to receive an income of more than LTL 200 million.
In 2002, Sonex Grupe boosted its turnover by 42.2 percent up to LTL 145 million and posted a pre-tax profit of LTL 5.2 million.
(Lietuvos Zinios)

Lithuania's non-life insurer LZUBD boosted its income threefold
According to audited data, the non-life insurance company, Lietuvos Zemes Ukio Banko Draudimas, received an income of LTL 34.9 million and earned a net profit of LTL 1.17 million last year. In 2001, the company also posted a profit of almost LTL 1.2 million, yet its income was 3 times lower.
In 2002, LZUBD sold insurance services for LTL 28.4 million and signed more than 164 thousand new agreements, an increase of 4.5 times if compared to 2001.
This year, the insurance company is going to sell insurance services for LTL 41 million and increase its share in the non-life insurance market from 4.3 percent to 6 percent.
LZUBD forecasts that this year, Lithuanian non-life insurance market will grow by 10-11 percent.
(Verslo Zinios, Lietuvos Rytas)

Vilniaus Bankas offers investments administration via Internet
Yesterday, Vilniaus Bankas presented a new system of securities trade via Internet.
Marijus Kalesinskas, the head of Vilniaus Bankas' Stock Exchange Department, says that the system enables to exchange three products – shares of Lithuanian companies in the bourse, saving notes and SEB investment fund – in one place.
VB Makleris website will also provide the major information about all the companies, shares of which are quoted on the Lithuanian Stock Exchange. VB Makleris system will apply extremely low commission – only 0.3 percent of the sum of a deal. Usually, 1.25-percent commission is applied.
Presently, some 28,000 clients are using the services of VB finance manager.
Vilniaus Bankas has invested LTL 300 thousand into the new system.
(Kauno Diena, Verslo Zinios)

Mobile telephone sales are going down
This year, the mobile communications penetration rate in Lithuania will not grow at such a rapid pace as it did last year. The mobile telephone market has been filled: last year, the sales of mobile telephones doubled year-on-year. No further market growth is expected this year.
The amount of Omnitel's mobile telephone sale reduced twofold over the first quarter of this year if compared to the relevant period last year. Omnitel hopes that this year, the mobile telephone sale volume will remain at the last year's level.
Claus Larsen, the director of UAB Bit? GSM Trade and Distribution Department, also claims that the company sold less mobile telephones in the first quarter of 2003 if compared to the relevant period last year.
Relying on Omnitel's data, low-end apparatuses accounted for 88-90 percent of telephone sales in the first quarter of this year, mid range and high-end telephones accounted for 4-5 percent and 5-7 percent of sales respectively.
(Verslo Zinios)

Thursday 17th of April, 2003

Snoras is estimating profit and getting ready for expansion
Snoras bank posted an unaudited Q1 profit of LTL 2.4 million, exceeding the plan by 60 percent, yet the profit was by 20 percent lower if compared to that of the first quarter last year.
Raimondas Baranauskas, the board chairman at Snoras bank explained that the additional provisions for bad loans (LTL 1.7 million) have reduced the profit. Besides, the bank is planning to invest into development of the bank: this year, 30 new mini banks will be opened.
In 2002, the bank posted an audited net profit of LTL 10.55 million. This year, the bank is planning to earn LTL 7 million. Over the first quarter of this year, Snoras' assets rose by LTL 43.2 million, which made LTL 1.143 billion at the end of the period. The sum of deposits and letters of credit increased by 9.3 percent and reached LTL 814.9 million. As of the end of March, bank's loan portfolio accounted for LTL 682.8 million.
(Verslo Zinios, Respublika, Lietuvos Rytas, Lietuvos Zinios)

Parex posts a profit of LTL 2.9 million
Parex, the Lithuanian commercial bank owned by Latvia's Parex, reported an unaudited net profit of LTL 2.878 million for the first quarter of this year.
Igoris Ryklys, director of Parex's Business Development Department, noted that the quarterly result was close to the bank's net profit of LTL 2.816 million recorded for the full year 2002.
Parex posted a loss of LTL 0.1 million for the first quarter of 2002. Following two years of loss-bringing operations, the bank started to make a profit in April 2002. The bank recorded a loss of LTL 7.1 million for 2001, compared to a loss of LTL 4.6 million for 2000.
Parex is projecting a profit of LTL 3.6 million for the full year 2003.
Over the year from late March 2002 to late March 2003, the bank's loan portfolio surged by 47 percent to LTL 146 million, deposits grew by 11 percent to LTL 176 million, and assets rose by 11 percent to LTL 308 million.
(Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas)

A Turkish textile factory in Lithuania
Ibrahim Demir, the president of UAB Ibrahim, is planning to open a textile factory in Lithuania. The initial investments will make EUR 7-8 million; some 60 new working places will be established. Pattern finish operations will be conducted in Istanbul; most of the production will be exported.
Demiras has already visited several textile factories in Lithuania; he said that most of them are established in large buildings, employ too many people and work with old equipment. "It is difficult to produce high quality textile under such conditions", Demiras claims.
According to Demiras, AB Alytaus Tekstile that had been sold for LTL 12.8 million to Tolaram Group is extremely inefficient. Demir himself is going to establish a small textile factory with modern Italian and German equipment and latest technologies. "It will be the most modern mobile factory not only in the Baltic region but also in Europe", the businessman says. The new factory is expected to produce some 200,000 metres of textile per month.
(Verslo Zinios)

Wednesday 16th of April, 2003

Akmenes Cementas works detrimentally
Although the competition in the cement market is fiercer this year, the Lithuanian cement producer Akmenes Cementas reached turnover of LTL 10.6 million for the first quarter of this year, the same as in 2002, and incurred an unaudited loss of LTL 867 thousand.
In January-March 2002, the company was using expensive oil for cement production and incurred a loss of LTL 4.3 million.
Arturas Zaremba, the CEO of Akmenes Cementas, says that Akmenes Cementas replaced the oil with cheaper coal, yet the increased cement import predetermined the loss. "Our competitors from Belarus and Russia came back to the Lithuanian market after the anti-dumping duty taxes were cancelled", Zaremba explained.
(Verslo Zinios, Lietuvos Rytas)

More loans were issued last year
Lithuanian commercial banks issued 70,073 loans as of early 2003, a rise of 37.3 percent over the same time last year.
According to the data provided by the Bank of Lithuania, the total value of loans amounted to LTL 7.933 billion in early 2003, up by 22 percent over one year.
Some 7,000 loans worth LTL 6.174 billion were issued to corporate entities as of early 2003, of which 271 loans was worth over LTL 5 million, a rise of 24.8 percent. The number of loans issued to corporate entities increased by 27.2 percent and their value rose by 21.4 percent on a yearly basis.
The total value of loans over LTL 5 million reached LTL 3.948 billion, an increase of 18.3 percent year-on-year.
Some 611 loans ranged from LTL 1 million to LTL 5 million, with their total value amounting to LTL 1.347 billion. The number of such loans grew by 32.3 percent over one year and their value increased by 31.2 percent.
Loans exceeding LTL 5 million accounted for 63.9 percent of the total amount, and loans of between LTL 1 million and LTL 5 million constituted 21.8 percent.
(Respublika, Lietuvos Zinios)

Oil extraction is awaiting for changes
Declining oil extraction industry made Lithuania's politicians remember the gloomy specialists' prognosis. However, they believe that after the revision of laws that regulate oil extraction industry, the sector will revive.
In 2002, 520 thousand cubic metres of oil were extracted in Lithuania, a decline of 7.8 percent if compared to 2001. Last year, Geonafta was the only company among the four Lithuanian oil extractors that managed to increase its oil extraction volume; the company drew out 103.6 thousand cubic metres of oil, a rise of 21 percent from 85.8 thousand cubic metres in 2001.
This year, the government has confirmed the strategy of oil extraction and search presented by the Geology Department as well as the terms of tenders for oil companies. Therefore, the Lithuanian oil market is expected to undergo some changes.
Over the 13 years of Lithuania's independence, only a single new oilfield has been found in Girkaliai.

Tuesday 15th of April, 2003

Lithuanian banks have deposits of 76 millionaires
The number of Lithuanian residents who have more than a million litas in bank deposits has increased over the year, but the total value of such deposits has declined. The Bank of Lithuania has released data showing that there were 76 private deposits worth more than a million litas at the country's commercial banks as of early 2003, a 40.7 percent increase year-on-year. The total value of these bank deposits came to LTL 163.105 million, a 12.6 percent drop year-on-year.
Private individuals' deposits at Lithuanian banks constituted LTL 6.878 billion, an 8.2 percent increase over the same period a year ago. Deposits from LTL 10 to 30 thousand accounted for LTL 1.913 billion or 27.8 percent of the individual deposits (an increase of 2.8 percent) while deposits of LTL 5 to 10 thousand made LTL 1.376 billion or 20 percent of the overall sum of deposits (a rise of 13.2 percent).
(Lietuvos Zinios, Kauno Diena, Lietuvos Rytas)

A bank has suffered from dishonest employees
Lietuvos Zems Ukio Bankas (LZUB) has noticed that a group of bank employees had been swindling for two years. "The employees had been accomplishing operations under the name of the bank and pocketed the money", Thomas Buerkle, the board chairman of LZUB, reported yesterday.
It has been ascertained that some employees in LZUB Vilnius department were pocketing the mark-up when exchanging currencies.
Vygintas Bubnys, the board member of the bank, says that data of the operations has not been recorded in the internal bank's accounting system. The swindle has been ascertained after using the strict internal control system that is being installed by the German Nord/LB bank.
LZUB managers say that clients have not incurred any losses; the bank was the one that did not receive part of its income. According to preliminary estimations the bank might have suffered a loss of some LTL 1 million.
Seven bank's employees that are suspected in having swindling were removed from their posts yesterday; there is a possibility that they will be fired.
"The bank has addressed the Investigation Service of Financial Crimes and the criminal proceedings will be started against the employees if there is ground for that", Bubnys says. According to him, some 'interesting documents' were found during the inspection, too.
(Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas, Respublika, Kauno Diena)

Money chose Lithuania last year
In 2002, Lithuania has attracted more investments that Latvia and Estonia did together.
The Institute for Economies in Transition at the Bank of Finland BOFIT has reported that Lithuanian companies attracted direct foreign investment (DFI) of EUR 800 million last year, an increase of 60 percent if compared to 2001. Meanwhile, the DFI flow to Estonia dropped by nearly 50 percent.
In the DFI structure, the largest investments came from Sweden, Denmark and Estonia. Last year, the largest sums were invested into the trade and communications sectors, oil refining, food, drinks and tobacco industry.
The flow of investments has grown in Latvia the most among the Baltic states; it doubled in 2002 and accounted for EUR 410 million.
(Verslo Zinios)

They are focusing on trade centres
Although the prognosis for hardware sales are not as attractive as they were last year, computer assemblers and dealers are ready to expand their specialised trade areas in Lithuania this year.
According to the data provided by Infobalt association, 120 thousand computers were sold in Lithuania in 2002, a rise of 45 thousand if compared to 2001. It is expected to sell 145,000 computers in Lithuania this year.
The computer assembler and trader, BMS, will allot LTL 7 million for its expansion; the company is planning to double its trade areas this year from 2,000 to 4,200 square metres.
Other Lithuanian hardware dealers have plans to expand their trade areas this year, too.
(Verslo Zinios)

Monday 14th of April, 2003

Lithuania fails to use its transit possibilities
Lithuanian seaport town, Klaipeda, fails to use its non-freezing harbour; last year, cargo turnover of 9 harbours in the eastern coast of the Baltic Sea accounted for LTL 178 million tons; 11 percent of the cargo were loaded in Klaip?da.
Over the first quarter of this year, 5.5 million tons of cargo were loaded in Klaipeda seaport; the figure accounted for 4.7 million over the same period last year.
AB Lietuvos Gelezinkeliai (Lithuanian Railways) transported 10.2 million tons of cargo over Q1 2003, an increase of 20 percent of compared to last year.
Aloyzas Kuzmarskis, president of the Lithuanian Association of Stevedoring Companies, says that terminals in Klaip?da's harbour are specialised, which does not allow companies to improvise much. "If a terminal is constructed to load grain, it will not be loading coal", he explained. Besides, according to Kuzmarskis, there is a lack of logistics specialists in Lithuania.
The Riga seaport was frozen last winter, yet it managed to increase its loading volume.
(Lietuvos Zinios)

Informacines Technologijos has bought Latvian business
Lithuanian IT company UAB Informacines Technologijos that creates and installs systems of business management, data storage and analysis has accelerated its expansion in the Latvian market; the company bought business from the Latvian company SIA Informacijas Technologijas.
"In order to consolidate our position in the Latvian market we decided to acquire property, not shares, in a Latvian company, as this is not so risky", Kestutis Uzpalis, the CEO of UAB Informacines Technologijos, says.
According to Uzpalis, the company is planning to allot some LTL 2 million for the business development in Latvia.
AB Informacines Technologijos will be focusing on finance, energetic and state sectors in Latvia.
(Verslo Zinios)

Vilniaus Bankas to extend a loan to Hanner
Vilniaus Bankas, Lithuania's largest commercial bank controlled by Sweden's SEB, will extend a loan of LTL 92 million to the real estate development company Hanner.
This will be one of the biggest loans granted to real estate development in Lithuania. It will go towards the construction of an office and shopping centre, Europa, in Konstitucijos Avenue in Vilnius. The total value of the project reaches LTL 130 million, Arvydas Avulis, board chairman of Hanner, has reported.
The Europa complex will comprise a 33-storey office building occupying a space of 15,000-square meters and a 20,000-square meter shopping centre housing over 90 different shops and cafes. The construction should be completed in March 2004.
The new complex will be located next to the centre of Vilnius municipality buildings, the construction of which started in August of 2002 and which is valued at LTL 70 million. Total investments into the would-be new city centre will reach over LTL 200 million.
(Lietuvos Zinios, Verslo Zinios)

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