Falling profits drag economy down

VILNIUS - The first-half results of Lithuania's top 100 private companies do not show a recovery of the country's industrial giants. On the contrary, a downward trend prevailed as the companies' aggregate sales grew by 14.4 percent to 8.66 billion litas ($2.16 billion) but their aggregate net profit fell by 21.3 percent to 217.2 million litas, according to a list drawn up by the Lithuanian Central Securities Depository and announced in Vartai, the daily Lietuvos Rytas supplement.

The power utility Lietuvos Energija was ranked first among the country's most profitable companies. Lietuvos Energija replaced the fixed-line telephone monopoly Lietuvos Telekomas, which enjoyed the leader's position for three years. The oil company Mazeikiu Nafta continued to be the biggest loss maker, but it was ranked first in terms of turnover. The Lithuanian construction companies continued a downward trend as their aggregate turnover fell by 20.3 percent.

The companies' aggregate sales grew by 14.4 percent, largely due to an increased turnover of Mazeikiu Nafta. Excluding the oil concern, the sales of Lithuania's top 100 private companies rose by just 1.6 percent in the first half of this year.

The aggregate first-half sales of the energy sector amounted to 8.6 billion litas and accounted for 50 percent of the companies' total sales. Lietuvos Energija posted a net profit of 95.49 million litas in the first half of 2001, up by 87.6 percent over the same time last year.

Gitanas Nauseda, adviser to the chairman of Vilniaus Bankas' board, said the textile industry is losing its position in the economy. The industry has been declining for the second straight year and it suffered the greatest losses in the first half of 2001 - the textile companies sales dropped by 6 percent.

"It is possible that the Lithuanian textile companies may become unattractive to foreign investors and the investments may go further to the East, (for example) to Belarus," Nauseda told the daily.

The grain and dairy processing industries bucked the downward trend in the first half of this year. The managers of grain and dairy processors attributed the sector's growth to less interference by the state. The grain processors reported a 25.8 percent increase and dairy processors a 17 percent year-on-year rise in first-half sales.

The grain processors' first-half profits grew by nearly 30 percent and dairy processors' profits rose as much as nine-fold.

The furniture sector posted fairly good results for the first half of 2001, while the Lithuanian brewers' results were rather poor. The TV-tube manufacturer Ekranas and electronic component maker Vilniaus Vingis, the former gems of the Lithuanian economy, reported only satisfactory first-half results, Nauseda said.