Saturday 26th of July, 2003
Lithuanian vodka to flow in Western Europe
The State Property Fund initialized a sales and purchase agreement between Vilniaus Degtine and Belvedere Dystrybucija owned by the French concern Belvedere. The agreement will be submitted to the privatization committee. Belvedere Dystrybucija has offered more than LTL 20 million for 82.27 percent shares of Vilniaus Degtin?. The initial price of the company's shares was LTL 5 million.
Belvedere Dystribuvija has plans to develop the distribution network and invest LTL 4-5 million in Vilniaus Degtine.
(Lietuvos Rytas, Lietuvos Zinios, Respublika)
Commercial Union Lietuva grows fast
Commercial Union Lietuva Gyvybes Draudimas strains to be the market leader. The company operates a year and a half in Lithuania. Commercial Union Lietuva Gyvybes Draudimas is owned by the largest European insurance and pensions saving funds company Aviva. The company signed 3.34 million premiums in the first half of 2003. Commercial Union Lietuva Gyvybes Draudimas takes the second place in the Lithuanian insurance market. Insurance products of the company are distributed by 400 insurance agents.
(Kauno Diena, Respublika)
Snoro Garantas consolidates its position
This year Snoro Garantas celebrates the fifth anniversary. The company expanded its activity despite the decline tendencies dominating in the market. The number of Snoro Garantas' customers increased fivefold and the number of signed premiums soared three and a half times in the first half of 2003 if compared with the respective period last year.
The number of compulsory third part motor liability insurance policies issued by Snoro Garantas increased by six times if compared with the respective period in 2002.
Snoro Garantas is owned by one of the strongest Lithuanian banks, Snoras. The bank invested LTL 1 million in its subsidiary Snoro Garantas. Profit of Snoro Garantas amounted to LTL 400.000 in 2002.
Statistics show decreasing foreign tourist numbers
In the first half of this year, 1.7 million foreigners visited Lithuania, which is 6.7 percent less than during the same period last year, the Statistics Department reported on Friday.
If compared to January- June period of 2002, this year there have been 21.5 percent less visitors from Belarus, 12.1 percent less from Latvia and 9.8 percent less from Russia.
The number of visitors from the UK has increased by 64.7 percent, from Spain by 41.1 percent, from the Netherlands by 31.8 percent, from Poland by 18.8 percent, from Germany by 14.6 percent, from Estonia by 8 percent.
Majority of foreign visitors came from the neighbouring countries: Russia - 29 percent, Latvia - 28 percent, Belarus - 14 percent, Poland - 9 percent.
During the first half of 2003, 1.7 percent of Lithuanians went abroad, which is 0.6 percent less than during the corresponding period of 2002.
Majority of foreign visitors came to Lithuania by road transport (81 percent). Others used railway service (12 percent), ships (2 percent), and planes (5 percent).
Friday 25th of July, 2003
Bank of Lithuania tells Snoras to minimize exposure to risky loans
The central Bank of Lithuania has instructed Snoras, the country's fourth-biggest commercial bank by assets, to make additional specific provisions for doubtful loans and to reduce the amount of loans extended to private individuals and companies registered in offshore areas.
Last November, Fitch affirmed the ratings of Snoras, but downgraded the outlook from positive to stable.
Snoras reported a pre audited net profit of LTL 4.1 million for the first half of this year, a 41.3 percent decline over the same period last year.
Russia's Konversbank, which is four times smaller than Snoras, controls 49.9 percent of shares in the Lithuanian bank through the Luxembourg-registered Incorion Investment Holding Company. Konversbank has also subscribed for Snoras' new LTL 25 million equity issue and has applied for the Bank of Lithuania's approval of the deal.
(Lietuvos Zinios, Verslo Zinios, Kauno Diena, Lietuvos Rytas)
Lithuania gave up to pressure of Gazprom
Lithuania's National Control Commission for Prices and Energy eliminated caps on prices of natural gas for large industrial users on Thursday.
The decision to reduce the ceilings of prices of natural gas supply for large industrial users was called off upon enforcement of the governmental resolution on elimination of caps of natural gas prices for large users, Vidmantas Jankauskas, the commission chairman, said.
Pursuant to the resolution of the National Control Commission for Prices and Energy, the price of natural gas supplied to large industrial users by Lietuvos Dujos should have been cut from LTL 304 to 274 per 1,000 cubic meters starting with Jul.1. The price of gas supplied to large users by Dujotekana should have been reduced from LTL 304 to 289.
(Respublika, Lietuvos Zinios, Kauno Diena)
Turnover of Eurovaistine LTL 75 million
The biggest Lithuania's network of pharmacies Eurovaistines, owned by the top pan-Baltic retailer VP Market, widened sales in Lithuania and Latvia by 66.4 percent to LTL 74.9 million in the first six months of 2003.
The turnover of the chain in Lithuania soared by 59.8 percent to LT L 70 million, while sales in Latvia rocketed up by 4.1 times to LTL 4.9 million, Renatas Vaitkevicius, director of the chain operator Eurofarmacijos Vaistines, said.
In the first half of 2002 turnover of Eurovaistines in Lithuania reached LTL 43.8 million, in Latvia LTL 1.2 million.
(Verslo Zinios, Lietuvos Zinios)
Thursday 24th of July, 2003
New challenges for market of mobile communications
Bite GSM signed an agreement with Rcom, a subsidiary of Rubikon Apskaitos Sistemos, on Wednesday. This company plans to compete by offering favourable prices. Rcom is to launch mobile communications services by the end of the year and projects LTL 20 million turnover by the end of the coming year. It is the third company providing mobile communications services via Bit?'s network Arturas Rockus, manager general of Rcom, reported that the company planned to invest several million litas in the telecommunications business. Antanas Zabulis, president of Omnitel, said that none of the virtual operators have presented some new services.
(Lietuvos Zinios, Verslo Zinios, Kauno Diena)
Turnover of Mineraliniai Vandenys grew by 61.31 percent
Mineraliniai Vandenys (MV), the Lithuanian alcoholic beverage and tobacco distributor, reported sales of LTL 177.3 million for the first half of 2003, a 61.31 percent rise in year-on-year terms.
The sharp increase in sales is attributed to a significant rise in the number of customers and the widening of the company's product range.
Dainius Kalina, marketing director of Mineraliniai Vandenys, claims that trade in domestic chemicals and light alcohol beverages increased in the first half of the year.
(Verslo Zinios, Lietuvos Rytas)
Company Stumbras between the horns of dilemma
Lithuanian company Mineraliniai Vandenys and Latvian company Latvijas Balzams are the main competitors in the tender for privatisation of a Lithuanian alcohol company Stumbras. The author of the article states that Latvijas Balzams is a similar alcohol producer as Stumbras. Both companies produce following products: vodka, whiskey, brandy, cocktails, etc. Both companies compete in the market of Baltic countries. It is said that Latvijas Balzamas wants to buy a direct competitor.
Mineraliniai Vandenys is modern company that has experience in management, logistics, distribution and advertising sectors. The journalist claims that Mineraliniai Vandenys and Stumbras complement each other and merger of these companies would be beneficial in terms of business development.
Wednesday 23th of July, 2003
Reproaches to Prime Minister concerning Pagiriu Siltnamiai
On Tuesday, parliamentarians Andrius Kubilius, Jurgis Razma and Arturas Vabzdys asked PM Algirdas Brazauskas to explain why the state has backed up the bank's loan issued to Pagiriu Siltnamiai (Pagiriai Greenhouse). MPs asked whether the Prime Minister was ready to assume personal and political liability in case the state suffers losses. Last week the Government approved of a state guaranty for 70 percent of the loan that Pagiriu Siltnamiai is to take from Nord/LB Lietuva.
Pagiriu Siltnamiai plans to take a loan of LTL 7 million to replenish the circulating assets. The company has not returned the loan of EUR 1.55 million that has been taken for investments and a loan of LTL 4.35 million for replenishment of the circulating assets yet.
MPs raise a question if the Government makes decisions responsibly.
Planned meeting with European Bank for Reconstruction and Development for investments in Mazeikiu Nafta
On August, a triangular meeting of representatives of the European Bank for Reconstruction and Development (ERDB), the Lithuanian Government and the Russian company Yukos is scheduled. Representatives of the three parties are to decide about the investments in Yukos-owned Mazeikiu Nafta.
At the end of June, the vice president of the EBRD Moryn Doil stated that the bank would like to acquire a 10-15 percent stake in Mazeikiu Nafta. At present, the Lithuanian Government owns 40.66 percent shares of Mazeikiu Nafta.
Minister rejected charges of European Commission
On Tuesday Lithuanian minister of finance Dalia Grybauskaite stated that Lithuania has renounced nearly all tax concessions and some concessions will be negotiated on with the European Commission (EC). She told that the income tax will not be decreased.
Grybauskaite mentioned that concessions granted to the oil refinery Mazeikiu Nafta continue till 2009. Tax concessions granted to the strategic investor of Vilniaus Bankas will end on 2003 therefore the state will have to negotiate with EC mostly on Mazeikiu Nafta.
The minister claims that there are no taxes in Lithuania contradicting the EU law.
(Verslo Zinios, Lietuvos Zinios, Lietuvos Rytas, Respublika)
Tuesday 22nd of July, 2003
Influential experts evaluated economy of Lithuania
The influential economical magazine The Economist claims that the economy of Lithuania has been the fastest growing economy in Europe in the recent years. According to Dalia Grybauskait?, it is evaluation of the three previous governments.
"The major reason of our success is that, in spite of governments' change, all of them had the same purpose: growth of the national economy and improvement of the living standard in Lithuania," Grybauskait? said.
According to the article, Lithuania has been named the "Baltic tiger". The Baltic country has achieved the best economic results among the post-socialist societies. Its gross domestic product increased from 4 percent in 1999 to 6.7 percent in 2002. In Q1 Lithuania's GNP increased by 9.4 percent if compared with the respective period last year.
(Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios)
Bit? will be Vodafone's partner
Bit? GSM signed a partnership agreement with Vodafone Group on Monday.
The agreement will benefit Bit?'s clients: they will enjoy lower tariffs of roaming calls.
Other companies of the country have also signed international partnership agreements with various foreign operators.
Lithuanian Omnitel, Latvian LMT and Estonian EMT have founded the Baltic Sea Alliance.
Subscribers of the three companies do not pay a fee for the incoming calls when staying in one of the three countries.
(Lietuvos Rytas, Verslo Zinios, Respublika, Lietuvos Zinios)
Buyers of Skirstomieji Tinklai are guessed
Lithuania's government has invited potential investors to place bids in public tenders on privatisation of two Lithuanian power distribution companies Rytu Skirstomieji Tinklai and Vakaru Skirstomieji Tinklai on Monday. The state expected to rake in over LTL 780 million in revenues on the sell-off of power grids.
The initial price for the stake in Rytu Skirstomieji Tinklai has been pegged at LTL 421.579 million, or LTL 1.2 per share, meanwhile, the price of the holding in Vakaru Skirstomieji Tinklai has been put at LTL 358.857 million, or LTL 1.15 per share.
(Lietuvos Rytas, Respublika, Verslo Zinios)
Claimants to Stumbras threaten with court
Latvia's biggest alcohol producer Latvijas Balzams, participant in the privatisation tender of Lithuanian Stumbras, starts pressuring officials of privatisation and makes court threats.
On Monday, Latvijas Balzams' officials issued a statement saying the company would apply to court if the Lithuanian distillery sell-off tender conditions and terms were violated.
One of the requirements for a potential buyer deals with the export volumes, which should not be lower than 0.5 million decalitres a year. Latvijas Balsams says it could use Russian S.P.I.-controlled markets to sell the output of Stumbras.
The price offered by Latvian and Lithuanian bidders differs by LTL 6 million. Latvijas Balzams wants to buy Stumbras for LTL 158 million and MG Baltic-controlled Mineraliniai Vandenys has offered LTL 152 million. However, the price would not be the only criteria when choosing the winner.
(Kauno Diena, Verslo Zinios, Lietuvos Rytas)
Monday 21th of July, 2003
Power station owned by state was profitable this year
State-owned power station Lietuvos Elektrine (Lithuanian Power Plant) netted LTL 18.801 million pre-audit profit in the first half of the year, or 1.93 times more if compared with the respective period last year. Lietuvos Elektrine posted LTL 9.76 million profit last year. H1 income of the power station was LTL 85.6 million, no significant changes since the respective period last year. Over the whole year 2002, Lietuvos Elektrine received LTL 171.847 million income. The Government owns 96.62 percent of shares of the power station. The rest of shares belong to small investors.
Grain growers are dissatisfied with order of grain buying
The Government and the Ministry of Agriculture have approved the procedure of grain buying for this year. According to the approved procedure, the Agricultural and Food Products Market Regulation Agency will buy only 130,000 tons of food grains. Farmers are dissatisfied with this decision. The agency bought 247,000 tons of grains last year. It is thought that small prices are projected. Grain buyers will regulate grain buying-up prices. It is forecasted that the price of the 1st class grains will be LTL 350-360 per ton, while price of the 2nd class will be LTL 320-330 per ton.
H1 profit of Lithuanian banks is LTL 125 million
Commercial banks operating in Lithuania posted LTL1 25 million pre-audit net profit for the first half of 2003, a 49 percent increase over the same period in 2002. The Vilnius department of Kredyt Bank reported a loss of LTL 1 million for the first six months, while the Lithuanian branch of Nordea Bank Finland posted a loss of LTL 1.1 million for this period.
Vilniaus Bankas, Hansabankas, and AB Nord/LB Lietuva were profitable this year but amount of the asset decreased from 74 to 72.8 percent.
As of July 1, the aggregate assets of the domestic commercial banks and foreign bank branches reached LTL 18 billion an increased by LTL 998 million
Baltic Weekly MonitorA