Saturday 20th of September, 2003
Lietuvos Avialinijos (Lithuanian Airways or LAL) that has prepared a new strategy of operation and is actively getting ready for the market liberalisation incurred a loss of LTL 3.7 million for the first half of this year while losses from the basic activities made LTL 11.5 million.
Vidas Zvinys, the CEO of LAL, says that the company was anticipating a loss of LTL 4.5 million. The company posted a net profit of LTL 32.2 million for the same period in 2002 while a profit from its basic activities made LTL 3.2 million.
This year, LAL is planning to reach a net profit of LTL 2.2 million, yet it is impossible to foresee the effect of fuel prices and US dollar rate on the company's activities, Zvinys says.
The first quarter of the year was extremely complicated for the company due to the SARS epidemic and the war in Iraqi.
Fuel got cheaper
Lithuanian fuel retailers have cut prices of petrol by around LTL 0.02 and diesel fuel prices by LTL 0.03 after the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil) has reduced wholesale oil product prices.
The price of A95 petrol, the most popular brand in Lithuania, ranged between LTL 2.36 and LTL 2.42 per litre in Vilnius' petrol stations on Friday. The price of diesel fuel was between LTL 2.03 and LTL 2.09 per litre. Unmanned stations were selling fuel at the lowest prices.
Daiva Joksiene, head of retail operations at Lietuva Statoil, said the retail price cuts reflected a fall in global oil prices and a decline in wholesale oil product prices in the local market.
Mazeikiu Nafta Trading House, the refinery's marketing unit, has reduced the wholesale price of A95 petrol by LTL 0.08 to LTL 2.01, and the price of diesel fuel by LTL 0.07 to LTL 1.71 over the past ten days.
Resident's occupation rate
According to the data provided by the Department of Statistics, number of people with occupation made 1.479 million in the second quarter of this year, a rise of 4 percent (53 thousand) if compared to the respective period in 2002 or 6.5 percent (90 thousand) from the first quarter of this year.
Dalia Ambrozaitien?, the deputy general director of the Department of Statistics, says that more people are employed or start their own business due to the growing volume of production and services.
Number of people working in the servicing sector grew from 769 thousand up to 801 thousand and made 54 percent of the overall number of working people in the second quarter of this year.
Friday 19th of September, 2003
Investments into insurance companies have grown
The overall portfolio of investments of the Lithuanian insurance companies made LTL 1.015 billion as of the end of June, a rise of 2.38 percent if compared to March (LTL 991.288 million); it was by 8.08 percent higher than LTL 939 million at the end of 2002.
The State Insurance Supervisory Authority has reported that the investment portfolio of non-life insurance companies declined by 0.75 percent over the period and made LTL 730.66 million while that of life insurance companies grew by 11.41 percent up to LTL 284.194 million.
Majority of investments of life insurance companies invested into governmental and municipal securities 86.54 percent. As of the end of June of 2002, the figure accounted for 81.35 percent.
(Verslo Zinios, Lietuvos Rytas)
Leasing companies see new perspectives
The growing state economy and improving terms offered by leasing companies as well as the approaching Lithuania's membership in the EU will continue boosting the rapidly growing leasing market. Players of the market forecast that growth of the Lithuanian market will make 40 percent this year while the overall leasing portfolio will account for LTL 2.5 billion at the end of the year. In 2004 and 2005 the growth is expected to make 20 and 15 percent respectively.
According to the data provided by the Lithuanian Leasing Association, the leasing market grew by 16.6 percent over the six months from the beginning of this year, a rise of 63 percent if compared to the respective period last year.
Hanza Lizingas and VB Lizingas had the largest share in the market 38.6 and 36 percent respectively.
(Verslo Zinios, Respublika)
Flow of news. Freightage
Over the eight months of this year, freightage of all kinds increased - that of the railway grew by 18.5 percent, local waters 51.8 percent and Lithuanian airway companies 6.3 percent.
In August, if compared to August 2002, volume of transportation via railway rose by 23.7 percent while that of local waters and airway companies grew by 8.3 percent and 0.7 percent respectively.
Thursday 18th of September, 2003
A rolling conflict
Veidas weekly claims that the government that invested nothing into carriers' business has recently decided to curb it with financial measures.
The Minister of Finance says that carriers have been cynically deceiving the state; therefore money given for drivers for business trips will be taxed from now on. Everything began after the Tax Inspection noticed that carrier companies pay extremely low wages (LTL 400) to their employees, yet they give a lot of money for drivers' business trips (LTL 1,400 1,600) and asked to raise the wages. Linava, the Lithuanian Carriers' Association, replied that the business was 'built' on the model and they are not going to change it.
State officials say that taxation of money intended for business trips will supplement the state budget with several dozens of millions litas.
Linava says that the new decision will affect more than 1,400 transportation companies, 65 thousand employees including 16 thousand drivers of long-distance run. The taxation will strongly affect the drivers, as their income for living abroad will decline by 30-50 percent.
Unemployment rate dropped down to 12.9 percent
The unemployment level stood at 12.9 percent in the second quarter of 2003, a decline of 0.1 percent if compared to the respective period last year and was by 0.7 percent lower from the quarter before (13.6 percent), the occupation survey carried out by the Statistics Department has revealed.
Meanwhile, the national Labour Exchange reported that the official unemployment level made 10.1 percent in the second quarter of this year, 1 percent down year-on-year.
Number of unemployed people made 219 thousand in the second quarter of this year, a rise of 2 percent over a year.
Most residents were employed in industrial companies (20 percent), with another large group working in agriculture, hunting and forestry (18.7 percent). Further 15 percent worked for trade enterprises and 10 percent within the education system.
Unemployed women (111,000) for the first time outnumbered unemployed men (107,000), or 51 and 49 percent respectively against 48 and 52 percent in 2002.
(Kauno Diena, Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas)
According to the data provided by the market research company Autotyrimai, 6,610 new automobiles were sold in Lithuania over the eight months of this year, a decline of 6 percent if compared to the respective period in 2002 when 7,035 new automobiles were sold.
86.4 percent of the sold automobiles were registered and stayed in Lithuania. 57.3 percent of new automobiles were bought through leasing companies.
In Lithuania, Peugeot 307 was the most saleable (398 automobiles were sold in January-August) and was followed by Mazda6 and Peugeot 206 with 318 and 217 automobiles respectively.
Wednesday 17th of September, 2003
Ice cream producers are going to consolidate their position in Europe
Bad weather reduced ice cream sales volume by some 20 percent in January-August this year if compared to the respective period last year. Ice cream producers expect to raise their turnovers next year after Lithuania's accession to the European Union.
In January-August this year, Kauno Pieno Centras (KPC) sold ice cream for LTL 16.45 million, a decline of 17.6 percent from last year.
"Lithuanians are interested in new products, yet, the overall consumption is growing extremely slowly and falls behind other countries; in Lithuania, ice cream consumption averagely makes 5.5 litres per capita while in Estonia or Scandinavian countries the figure accounts for 7-8 litres and 15 litres respectively", Gytis Kauzonas, the head of KPC, says.
Kraitene, another Lithuanian ice cream producer, sold production for LTL 20 million over the eight months of this year; sales volume in the local market and export dropped by 7 percent.
Ice cream producers keep increasing their export volumes, yet it does not compensate declining sales in the local market.
This year, KPC boosted its export by 59 percent up to LTL 2.18 million.
Kaunas tasted 'money jam'
Snoras has been always famous for its original campaigns. This year, the bank has made 26 litres of 'money jam' and poured it into 22 containers that will be given as prizes for time deposits.
Snoras is the fourth largest Lithuanian commercial bank in terms of assets and it is getting closer to its competitor Nord/LB Lietuva; as of September 13, deposits at Snoras bank made LTL 1.057 billion.
As of the beginning of August, Snoras controlled 7.4 percent of deposit market in Lithuania; the sum has grown by 29.6 percent or LTL 242 million since the beginning of the year.
Nord/LB Lietuva had LTL 1.45 million of deposits as of September 1 while the leaders of the banking market Vilniaus Bankas and Hansabankas had LTL 4.714 billion and LTL 3.909 billion respectively.
(Kauno Diena, Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios)
Retailers are growing
Over the seven months of this year, turnover of retail trade companies (excluding VAT) grew by 11.9 percent if compared to the respective period in 2002 and reached LTL 9.778 billion.
According to preliminary data provided by the Department of Statistics, turnover of non-foodstuff goods (excluding cars) increased by 8.9 percent over the period. Turnover of companies selling furniture, home appliances, radio and TV devices and construction materials grew the most, that is, 42.7 percent.
Turnover of companies that sell foodstuff rose by 8.3 percent in January-July this year.
Turnover of large companies rose the most 15.6 percent while that of small and medium companies declined by 1.6 and 15.3 percent respectively.
Tuesday 16th of September, 2003
Hansabankas is interested in life insurance
Baltic financial group Hansabank on Monday filed an offer to Lietuvos Draudimas, the largest domestic insurance operator, to buy 100 percent interest in the latter's life insurance subsidiary Lietuvos Draudimas Gyvybes Draudimas.
Hansabankas offered LTL 36.5 million for the company.
Kestutis Serpytis, the chief executive for Lietuvos Draudimas, said the Hansabankas' proposal actually 'was fully in line with the Lietuvos Draudimas strategy to focus on general insurance business' and it would be discussed.
(Verslo Zinios, Lietuvos Rytas)
A hole of LTL 44 million in the budget
Lithuania's national budget revenues accounted for LTL 6.932 billion in the first eight months of this year, falling 0.6 percent short of the target.
According to final data provided by the Finance Ministry, the central government revenues reached LTL 5.916 billion for the January-August period, 0.8 percent less than planned. Aggregate municipal budget revenues totaled LTL 1.016 billion, 0.5 percent below the projected level.
The national budget revenues for the eight months accounted for 62.5 percent of the full-year estimate of LTL 11.1 billion. The central government revenues accounted for 61.9 percent of the annual target of LTL 9.553 billion, while municipal budget revenues represented 65.7 percent of the full-year estimate of LTL 1.547 billion.
(Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas)
Basketball fans were emptying barrels of Svyturys beer
Lithuanian basketball fans, happy about their national team's victories in the European championship in Stockholm, drank 42 percent more beer last weekend if compared to regular figures. Usually, some 400 thousand litres of Svyturys-Utenos Alus beer are consumed from Friday to Monday night, yet last weekend the figure reached 572 thousand litres.
Svyturys brewery has been the major sponsor of the national basketball team for three years already with the sum of total support nearing to LTL 1 million.
Svyturys-Utenos Alus is the largest beer producer in Lithuania that presently controls 48.66 percent of the market.
(Lietuvos Rytas, Respublika)
Monday 15th of September, 2003
Lithuania and the EU members should improve protection of their markets
Lithuania and members of the European Union should improve protection of their markets from the third-world countries, Jonas Karciauskas, the president of the Lithuanian Association of Textile and Clothing, says. According to Karciauskas, the EU already applies import customs that are by one-third lower (4 to 12 percent) than the third countries do. For example, China has set import customs at 20-36 percent, Russia at 20-30 percent and Pakistan at 40-60 percent.
In the first half of this year, if compared to the respective period last year, export of Lithuanian textile products declined by 3.5 percent down to LTL 1.614 billion while the import volume dropped by 5.8 percent down to LTL 1.256 billion.
Lithuanian textile companies export some 85 percent of their production and their export makes one-fifth of the overall Lithuania's export volume.
Presently, Lithuanian textile and clothing companies employ 51.2 thousand people.
Competence among trade chains reduces food prices
Retail trade chains face the fiercest competition in the sector of foodstuff, which has led to price cuts by over 5 percent for consumers last year, an analysis carried out by the Competition Council revealed.
VP Market has built a lead over other domestic retail operators with a 22.4 percent retail market share and 34.5 percent share in the foodstuffs sector in 2002. Its closest rival IKI shared 10.1 percent of the respective market (16.5 percent in food), RIMI Lietuva had 5.3 percent (8 percent), Norfos Mazmena - 4.2 percent (6.8 percent), and Aibes Mazmena - 5 percent (6.9 percent).
The combined goods turnover of the five retail chains accounted for 47 percent of total retail sales, and in the foodstuffs sector the share was as big as 72.7 percent.
According to figures of the national statistical office, total sales of the domestic retail companies (except for cars and fuel) stood at LTL 8.3 billion in 2002, and food sales posted LTL 4.4 billion.
The harvest of the changeable tourism summer
Foreign tourists spent twice much money than Lithuanians did during the short and extremely hot summer. In the first half of this year, 1.68 million tourists visited Lithuania, a decline of 6.7 percent if compared to January-June 2002. However, number of foreign guests kept growing every following month.
According to the data provided by the Bank of Lithuania, foreign tourists spent LTL 291 million in Lithuania in January-June this year, a decline of 20.6 percent if compared to the same period in 2002. Meanwhile, Lithuanians spent LTL 257 million over the period, the same they did last year.
In summer, number of people who rested in country houses was rapidly growing; in August alone, the number made 29.7 thousand, a rise of 40 percent from August last year. In January-August, 109.6 people chose country tourism while last year the figure accounted for 84 thousand. Foreigners made 2.2 percent of country tourists.
IT market will grow by up to 20 percent this year
Lithuanian hardware and software wholesaler GNT Lietuva forecasts that the IT market, which increased by 6-7 percent in the first half of this year, will grow by 15-20 percent in the second half year. Last year, market growth made 27 percent. Specialists claim that the IT market growth will be propelled by more active hardware sales in the private consumers' sector in the September-December period.
Vytautas Stunzenas, director of GNT Lietuva, and Giedrius Armanavicius, director of Elko Kaunas, forecast that IT market growth will amount to 20-25 percent in the second half year.
The marketing director of UAB Tech Data Lietuva Raminta Povilaikiene forecasts 15 percent growth of the IT market. She says the company's growth has amounted to 5 percent but the most active months are still to come.
Stunzenas claims that software grows more complicated therefore the market demands more services and this is the niche still to be occupied. Armanavicius also remarks that the service market is still free in Lithuania. In his opinion, companies that enter this market first will win.
(Verslo Zinios, Lietuvos Rytas)
Baltic Weekly MonitorA