Saturday 23rd of August, 2003
Collaboration with the World Bank in the sector of regional policy
Lithuania is going to sign an agreement with the World Bank for the collaboration in the sector of regional policy.
"The European Union sees Lithuania as a solid region, a small state, while we see a big difference in terms of occupation or development of infrastructure in different regions of the country. The collaboration will have a new aspect in our relationships with the World Bank", Lithuania's Prime Minister Algirdas Brazauskas said after the meeting with World Bank Executive Director Shengman Zhang. According to Brazauskas, it is planned to use experience of the World Bank in the future. Lithuania is not going to borrow money from the World Bank as yet.
Shengman Zhang complimented Lithuania for its growth of economy and said they hope for successful collaboration with Lithuania in the future.
Since 1991, the Word Bank gave Lithuania loans of USD 439.7 million; LTL 49.2 million have been repaid already. As of the end of June, Lithuania's debt to the World Bank amounted to LTL 809.6 million.
(Respublika, Lietuvos Zinios)
Hansabank's group boosts its profit
Lithuania's companies that are controlled by the biggest Baltic financial group Hansabank posted a net profit of LTL 32.8 million (EUR 9.5 million) in the first half of this year, lifting the net result by 42 percent from January-June 2002.
The second-largest Lithuania's commercial bank Hansabankas reported net earnings of LTL 41.125 million for the first half of 2003, a rise of 74.4 percent versus the first six months of 2002 when the bank posted a profit of LTL 23.579 million.
Antanas Poska, the head of the Finance Department at Hansabankas, reported that the profit of Hansabank group in Lithuania is smaller than that of Hansabankas, as the Estonian bank is still reckoning in the depreciation of the bank's prestige after the acquisition of Lietuvos Taupomasis Bankas (Lithuanian Savings Bank), which made some LTL 8.3 million for the first half of this year.
Flow of news. TV sets
The Lithuanian manufacturer of TV sets, Siauliu Tauro Televizoriai, keeps winning more and more market back from the Turkish manufacturers of TV sets and anticipates a record growth.
This year, the Siauliai-based company is planning to manufacture 600 thousand TV sets, 1.8 times more than last year.
Friday 22nd of August, 2003
Insurance market reached LTL 494 million
Lithuania's insurance companies collected LTL 494 million in direct insurance premiums in the first seven months of this year, raising the total sum of premiums by 10 percent if compared to the respective period of 2002. Non-life insurers signed LTL 376.4 million in direct insurance premiums, some 76.2 percent of the overall premiums, during seven months, a 1.2 percent decline, in year-on-year terms. Life insurance premiums soared by 72.7 percent to LTL 117.7 million, representing some 23.8 percent of the total volume. In July, total direct insurance premiums reached LTL 55.4 million, a 10.3 percent drop from June.
The Lietuvos Draudimas Group had a 37.1 percent share of the domestic non-life market (down 41.9 percent) in the first seven months of 2003 with total non-life premiums of LTL 139.606 million signed. The Ergo Group signed LTL 55.238 million in non-life premiums during the seven months (down by 21.4 percent year-on-year), which gave it a 14.7-percent market share. Lindra had a 9.1 percent market share (up by 40.6 percent) with LTL 34.359 million in premiums collected.
Lietuvos Draudimas remained the leading player in the life insurance segment as well. With signed premiums of LTL 59.069 million, the group had a 50.2 percent market share in the first seven months of 2003, down from a 64.2 percent market share in the same period last year.
(Kauno Diena, Verslo Zinios)
Lithuanian companies will be offering snail products
Three Lithuanian snail-processing companies that have permission to export their production to the European Union have been exporting only processed material as yet. However, after Lithuania's accession to the EU, Lithuanian companies expect to launch export of snail products.
Vilnius-based snail company Kamargo processed some 280-290 tons of snails over the 50-day season this year. Last year, the company's turnover made LTL 2.5 million.
Gudukas, another Lithuanian snail company, processed some 400 tons of snails this year. In 2002, the company posted turnover of LTL 2 million.
Moletai-based company Arcia that purchases and processes forest goodies has already processed 220 tons of snails this year. 120 tons of the snails were imported from Moldova, Russia and Belarus.
(Kauno Diena, Lietuvos Rytas)
Lithuanian banks have noticed a good bite
The Polish bank Kredyt Bank is going to cancel its activities in Lithuania. Kredyt Bank that has been operating in Lithuania for seven years decided to focus on the Polish market, therefore, the bank is to sell its branch in Vilnius and a bank in Ukraine. Since 2002, by the Belgian finance group KBC Bank&Insurance has been holding the control package at Kredyt Bank.
Kredyt Bank's Vilnius branch closed the first half of 2003 with losses of LTL 1 million. In 2002, net earnings came in at LTL 1.8 million. This year, the branch boosted its income from base activities by 6.8 percent and reduced expenditures by 7.3 percent.
Lietuvos Rytas daily claims that several Lithuanian banks including Nordea, Sampo, Nord/LB Lietuva and Hansabankas are interested in Kredyt Bank's branch in Vilnius. All banks, except Nord/LB Lietuva, do not give comments on the issue.
Vygintas Bubnys, a board member at Nord/LB Lietuva, says that the bank is considering a possibility to acquire the branch. "It is always good to boost our loan portfolio, yet we have to ascertain terms and risk of the loans at first. We also need to negotiate for concrete purchasing conditions", he says.
Thursday 21st of August, 2003
Grigiskes posts fourfold rise in its profit
Grigiskes, the largest manufacturer of hardboard and toilet paper in Lithuania, boosted its turnover by 24.5 percent up to LTL 43.2 million for the seven months of this year. In January-July last year, turnover of the company made LTL 34.7 million. Grigiskes posted net profit of LTL 3.6 million for the first seven months of this year, a fourfold rise versus the same period of 2002.
In July, sales of the company increased by 37.8 percent if compared to July 2002. The company sold goods and provided services for LTL 6.2 million versus LTL 4.5 in July last year. The company posted a profit of LTL 231,000 for July this year, a rise of 11.6 percent from July 2002.
Grigiskes exports most of its production abroad; some 70 percent of hardboards are exported o the EU countries.
More international freights have been transported
AB Lietuvos Gelezinkeliai (Lithuanian Railway) posted turnover of LTL 413.5 million for the first half-year, an increase if 17.5 percent versus the respective period last year. The company's activities results were better because of the growing flow of freight: the company handled a total of 19.7 million tons of freight during the January-to-June period, a rise of 14.6 percent.
In year-on-year terms, international freight volumes grew by 27.9 percent, while domestic traffic slumped by 37.4 percent, Lietuvos Gelezinkeliai has reported. The slump was related to the changes in the oil and oil transportation market.
Part of the trade is still in the shadow
More than 10 percent of products are sold illegally in the retail trade market. Results of the research carried out by the Statistics Department have showed that unaccountable part in the retail trade market got slightly smaller, yet it has quite a strong position, still.
Although the final data about the unaccountable part of economy has not been reported as yet, it is forecasted that it might make some 15-17 percent.
Former researches have revealed that in 1995, shadow economy controlled 23.4 percent of the market while in 1998 it shrank down to 17.9 percent.
Experts say that the largest part of unaccountable economy is registered in small retail trade companies.
(Lietuvos Zinios, Kauno Diena, Lietuvos Rytas)
Wednesday 20th of August, 2003
New car market is changeable
According to the market research company Autotyrimai, 5,630 new cars were sold over the seven months of this year in Lithuania, a decline of 13.5 percent if compared to the respective period in 2002. Last year, the rise in new car sales volume was predetermined by the amendments in the VAT law, which cancelled a possibility for juridical entities to retrieve VAT for new cars.
In July alone, 1,037 new cars were sold in Lithuania, 92 percent more if compared to July 2002.
Analysts say that although the trends in the car market are changeable this year, successful sales in July allow to believe that more new automobiles will be sold during the second half of this year, therefore, the overall sales results of 2002 and 2003 will be similar.
Presently, Mazda6 is the most popular automobile in Lithuania; in January-July 290 Mazda6 automobiles were sold. Peugeot appeared to be the second with 244 Peugeot 307 automobiles and was followed by Opel with 174 Opel Vectras.
(Lietuvos Zinios, Verslo Zinios)
The most expensive land in Vilnius and the seaside
After the government confirmed the new official value of land, an are of household land in Vilnius got 7.14 times more expensive and reached LTL 9.023 thousand. In Klaipeda and Palanga, price of the land grew 6.76 times up to LTL 10.16 thousand and LTL 7.139 thousand respectively.
Price of land in Vilnius region increased 15.98 times up to LTL 1.47 thousand while that of the land in Klaipeda region rose 7.23 times up to LTL 1.104 thousand.
Household land got cheaper in Visaginas (2.31 times down to LTL 66/are), Akmene region (2.1 times down to LTL 66/are), Joniskis region (1.9 times to LTL 93/are) and Pakruojis region (LTL 1.58 to LTL 80).
Prices of farming land rose 7.51 times in Vilnius up to LTL 56.206 thousand/ha while in Kaunas it increased 2.8 times and reached LTL 17.054 thousand/ha.
(Lietuvos Zinios, Verslo Zinios)
EU membership will raise import prices
After Lithuania's accession to the EU, prices of some 30 percent of imported goods are expected to grow by some 5.6 percent. Prices of bicycles imported from China are likely to grow by 42 percent, those of TV sets by 35 percent and footwear by 7 percent. Chinese goods will get more expensive due to the anti-dumping customs fees that are applied in the EU.
Meanwhile, poultry with bones imported from the USA is likely to get 2.1 times more expensive while prices of poultry without bones should increase 5.8 times; those of pork 4.7 times.
After Lithuania's accession to the EU, a customs fee of 0.7 percent will be applied on imported gas, which would thin wallets of Lithuania's residents by LTL 5.2 million.
Prices of cars imported directly from Japan are expected to grow by 10 percent. However, Japanese car manufacturers have several factories in Europe; therefore, it is likely that Japanese automobiles will be imported to Lithuania from some European country, not Japan.
(Verslo Zinios, Lietuvos Zinios)
Tuesday 19th of August, 2003
Retail sales grew by 10.2 percent in Lithuania in the half of this year if compared to the same period in 2002. Excluding car sales, the growth rate was 7.6 percent in the reporting period. In June retail sales increased by 9.1 percent versus June of 2002. Excluding car sales, the growth reached 9.5 percent.
According to the data provided by the Statistics Department, the overall turnover of retail trade enterprises, as well as sales of motor vehicles and motorcycles, maintenance and repairs thereof, and retail sale of automotive fuel made LTL 8.144 billion in the first six months of 2003.
(Lietuvos Zinios, Lietuvos Rytas)
Lithuanian industry sales grew by 9.6 percent in the first seven months of this year if compared to the respective period in 2002. Excluding oil products, the growth made 15.4 percent. The Department of Statistics reported that in July this year sales of the Lithuanian industry were by 20 percent higher than in July last year (15.1 percent higher excluding oil products). If compared to June, the growth made 12.4 percent (or 3.9 percent excluding oil products).
Insurers keep counting their profit
The State Insurance Supervisory Authority (SISA) has reported that Lithuanian insurance companies closed the first half of 2003 with aggregate unaudited earnings of LTL 12.3 million.
In the first half of 2002 Lithuania's insurers suffered combined losses of LTL 3.3 million. The head of SISA, Edvinas Vasilis-Vasiliauskas, says that the negative 2002 result was predetermined by the attempts of new life insurance companies to consolidate their position in the market.
Unaudited earnings of non-life insurance companies reached LTL 7.8 million in the first half of 2003, while life insurers reported aggregate net earnings of LTL 4.5 million. 15 out of 21 non-life insurance companies with operations in Lithuania closed the first half of the year with profit. Among life insurers the first six months of 2003 were profitable for 5 out of 9 companies.
In the January-to-June period domestic insurance companies signed direct insurance premiums for the overall amount of LTL 438.6 million, a 9.3 percent increase versus the same period of 2002. Premiums collected by non-life insurance companies shrank by 1.8 percent, year-on-year, to LTL 337.3 million, while life insurance companies raised revenues on premiums by 74.6 percent to LTL 101.3 million.
(Lietuvos Zinios, Respublika, Verslo Zinios, Lietuvos Rytas)
Revival in the construction market is accompanied by the concern about profit
In the second quarter of this year, Lithuanian constructors accomplished works for LTL 992 million, a rise of 28 percent if compared to April-June last year.
The Department of Statistics has reported that in the second quarter of this year, LTL 2.074 billion were invested into constructions in Lithuania, 3.8-percent increase versus the same period in 2002.
LTL 1.301 billion (63 percent of investments) were allotted for constructions and reconstructions of buildings and engineering structures while LTL 178 million (9 percent) were invested into construction of living houses.
Although the growth of 12.5 percent has been anticipated for this year, it is likely that the growth would actually make 20 percent. However, profitability of construction companies made only 3.7 percent last year; 47 percent of the companies worked detrimentally.
In the first half of this year, 69 percent of construction works were accomplished in Vilnius, Kaunas and Klaip?da regions; Vilnius alone took at least 40 percent of the investments.
Monday 18th of August, 2003
Damava lacks reeds for roofs
Over the seven months of this year, the producer of reed roofs, Gargzdai-based UAB Damava, produced some 15 thousand square metres of the roofs, the same amount it produced over the overall year 2002. The company receives more and more orders from the Netherlands and England; however, lack of the raw materials hinders the company from its expansion.
If compared to the first half of 2002, the company's turnover jumped by 120 percent after it found new clients abroad. However, Dainius Satkus, the head of Damava, says he would reveal the exact figures only after Lithuania's accession to the EU. According to Satkus, the company grew by 45 percent over the first half of this year.
"Reed roofs are fashionable, ecological and traditional building materials. Since they are getting more and more popular, our clients have to wait, as we cannot implement their orders with our capabilities", Satkus says.
Lack of reeds is the major factor that impedes Damava's expansion: the company imports 60 percent of reeds. Recently, Damava has established a company in Kaliningrad that would cut reeds and import them into Gargzdai.
July was successful for Ekranas
AB Ekranas reached turnover of LTL 217 million for the first 7 months of this year, a drop of 17.2 percent if compared to the respective period last year due to the decline in the world electronics market. However, in July, the company's turnover rose by 13.1 percent and erached LTL 31 million.
"Operation was particularly successful in July; we sold nearly 300,000 picture tubes. Moreover, the same tendencies seem to prevail in August - we expect to boost sales from July," Angelija Zokaitiene, head of Ekranas Investor and Public Relations Department, says.
Ekranas is planning to end this year with profit. The company reported losses of LTL 1.46 million for the first half of 2003, however, the second quarter operations brought in net earnings of LTL 4.46 million.
Russian oil concern has aimed at a bank
A Russian bank that is related to the Russian oil concern Jukos presented an offer of acquisition to the shareholders of Kaunas-based bank Ukio Bankas.
Vladimiras Romanovas, one of the owners at Ukio Bankas, confirmed that the bank received an offer to sell its shares. However, he assured that they would not sell all shares in the bank; they might offer part of the shares by placing a 20-25-percent equity issue.
Ukio Bankas is actively participating in oil business; it credits different oil companies and receives money from customers of processed oil, which also are given bank guarantees.
Finance analysts say that the wish of Russian bank to take over Ukio Bankas is related to the problems in Jukos. Romanovas' talks about disinclination to sell Ukio Bankas might be related to the intention to raise the bank's value.
Ukio Bankas is the fifth largest Lithuanian bank in terms of assets. Over the first half of this year, the bank posted an unaudited net profit of LTL 1.249 million. This year, the bank is planning to post a profit of LTL 4.806 million.
Baltic Weekly MonitorA