OFF THE WIRE

HANSABANK RETURNS: Hansabanka Group posted a net 2001 profit of 108.2 euros ($99.21 million), the company announced on Feb. 14. The Estonian newspaper Aripaev reported Hansabanka's results represent a 41 percent increase over 2000 profits and were in line with analysts' expectations. Hansabanka Group, the largest Pan-Baltic bank, is owned by Swedish banking congolmerate SEB. Officials said increased profits were due in part to the acquisition last year of Lietuvas Taupomasis Bankas, which increased deposit growth by 75 percent. Loan volume increased 46 percent. Hansabanka Group's assets were 4.60 billion euros at the end of 2001, the company reported. The bank also reported a large increase in the number of Internet customers. It currently has 318,000 online customers in Estonia and 74,000 in Latvia.

CHEAPER CALLS: Lietuvos Telekomas, Lithuania's monopoly fixed-line carrier, has cut calling rates to Poland and Latvia by more than 15 percent effective Feb. 16, BNS reported. The company will charge 1.40 litas ($0.35) per minute for calls to fixed-line networks in Latvia during peak hours and 2.35 litas per minute to Poland. Lietuvos Telekomas has also cut rates specifically to Riga and Warsaw. Calls to fixed lines in Riga will cost 1.18 litas per minute, while calls to Warsaw will be 1.69 litas per minute.

SHOP AROUND: Riga's retail business is becoming increasingly dominated by hypermarkets and shopping centers, according to the research firm Baltic Data House. In a poll last fall 48 percent of respondents said they preferred to shop in hypermarkets or supermarkets, Dienas Business reported. Large retailers presently account for about 28 percent of total grocery sales.

SAKU RESULTS: Saku Brewery, Estonia's largest brewery, reported a 2 percent increase in sales last year to 47.7 million euros, Aripaev reported Feb. 14. But the company's profits fell 25 percent thanks to the increased costs of raw materials. The company posted a profit of 3.6 million euros ($3.13 million) on the sale of 54.8 million liters of beverages last year, including beer, cider and mineral water. Saku also reported that its market share climbed 0.5 percent to 49 percent of the beverage market. Saku's fastest-growing beer was Rock, which posted a 24 percent increase in sales last year. It's now Estonia's second most popular beer, according to the company. In related news, the sale of Finland's Hartwall Group, a shareholder in Saku and 50 percent owner of Russia's Baltic Beverage Holdings, to British brewer Scottish and Newcastle was announced last week. The deal was reportedly worth 2 billion euros. Scottish and Newcastle is the world's eighth largest brewery.

AD SALES: Latvia's advertising sales grew 14 percent last year compared to 2000, according to the polling firm BMF Gallup Media. The firm reported that 34.1 million lats ($53.2 million) was spent on advertising last year. Print media represented the largest market share with 47 percent. Television was second at 33.6 percent and radio was third with 12.6 percent of the market. A combination of billboard and Internet advertising accounted for the remainder. Print advertising increased last year over 2000, while radio advertising declined, the firm said. Television's market share was unchanged. The biggest spenders last year included Colgate-Palmolive, Proctor and Gamble, Elcor, Latvijas Mobilais Telefons and Coca-Cola.

POWERSHARING: Latvia's Latvernergo and Estonia's Eesti Energia may resume talks on forming an alliance, a former privatization official told Dienas Bizness. "An alliance would definitely make it easier to survive competition that both Eesti Energia and Latvenergo would face from companies now operating in Finland, Sweden and Germany," said Vaino Sarnet, the former head of Estonia's privatization agency. He said Estonia failed to complete the sell-off of its electric power plants and needs to modernize. "I think we will soon talk about the consolidation process again," he said. The companies of course cannot merge, therefore other ways should be sought to solve problems through special cooperation contracts." Latvenergo President Karlis Mikelsons has not ruled out possible talks on consolidation, the newspaper reported.

PHONE ENVY: Lithuania's mobile phone imports more than doubled last year compared to 2000, BNS reported. The country imported a total of 356,860 phones last year compared with 163,720 in 2000. The largest number of phones came from Finland (103,170 phones) followed by Germany (118,950). Lithuania re-exported 33,110 phones last year, mostly to Estonia and Russia.

FARMERS UNITE: Farmers in all three Baltic countries will unite to protect their interests during their countries' accession negotiations with the European Union. Kaul Nurm, general director of the Estonian Central Farmers' Union, said representatives of farmers' unions from the three countries adopted a joint appeal on Feb. 10 asking the Baltic governments to press for equal terms on agricultural subsidies. A proposal by some EU foreign ministers presented in Spain earlier this month would cut subsidies to new EU countries. The plan would keep subsidies to new members well below those given to existing member states until 2013. Baltic farmers are also protesting specific points in the common agricultural policy put forward by the European Commission. They also argue that production quotas offered to new members are too low.

LITHUANIAN COOLDOWN: The Nordic financial group Nordea forecasts a 3.9 percent slowdown in Lithuania's economy this year compared to 2001. Industrial sales and export growth helped push Lithuania's GDP 5.7 percent higher in 2001 compared to the previous year. But the global economic slowdown will cause a retraction in growth this year, the firm predicts. The group also said a slowdown in demand among European Union countries would pull down exports. Falling oil prices are also expected to negatively impact Lithuania's economy. A substantial share of the country's export revenue is related to oil.