In Brief - 2003-05-01

Lembergs takes case to Washington

Venstpils Mayor Aivars Lembergs is planning a working visit to Washington this week in order to meet U.S. State Department and Energy Department officials.

The official purpose of the visit, which is taking place at the invitation of a high-ranking U.S. administration official, is to attract investors to Ventspils. Unofficially, however, it is claimed that Lembergs will have several meetings with high ranking U.S. officials and, possibly, also investors, to discuss oil transit problems caused by Russia's decision to halt oil exports via pipeline to the Ventspils port.

U.S. participation in solving the oil crisis was also hinted at by President Vaira Vike-Freiberga on return from her visit with President George Bush, who, according to the Latvian president, said during the meeting that he was interested in the free flow of energy resources in Europe and pledged to help Latvia in talks with Russia on restoration of oil deliveries to the Ventspils port. (Baltic News Service)

Norma hit by drop in orders

Declining orders from Russia had a bigger effect on Norma's first quarter results than had been expected, yet the seat belt maker managed to earn decent profits with increased sales to the West, Estonian analysts said.

"I wouldn't have expected a fall this big from Norma, because the volume of output at its main customer AutoVAZ didn't decline so steeply at the end of last year," Uhispank analyst Sander Danil said.

At the same time, there is no reason to be concerned, because at the Russian AutoVAZ plant things seem to be moving in a positive direction, and the second quarter probably will be better for Norma, said Danil.

Triin Palge, an analyst with the investment bank Suprema, said that due to the shortage of information Norma's results were difficult to forecast.

"What's positive is that although Norma has been losing a lot in terms of Russian sales, this hasn't had a very negative effect on the company - after all, they earned a profit of 22 million kroons (1.4 million euros)," Palge said.

"Earlier Norma depended very much on the Russian market, but now the risks have been reduced, and the increase in sales to the West offers the possibility to survive the hard times." (BNS)

Spilva cranks out the sauces

Spilva, the largest fruit and vegetable processing company in Latvia, generated sales of 5.7 million lats (8.9 million euros) in 2002, an increase of 8 percent over 2001.

Finance director Martins Biezais said the growing sales were due to an expanding domestic market share and growing exports, as well as to a successful long-term development policy.

The company's sales from export last year were 809,900 lats, up 25 percent over 2001. Spilva mainly exported its products to Lithuania, Estonia, Germany and Russia. Of total exports, 58 percent went to Lithuania and 18 percent to Estonia.

Exports to Germany meanwhile increased threefold last year while the biggest growth in sales was seen in Russia - up five times over 2001 to comprise 17 percent of the total. (BNS)

Tartu heating still with Finns

After receiving the Competition Board's approval, the Finnish energy company Fortum finalized the purchase of a 60 percent stake in Tartu Energia, the utility in the southern Estonian city.

Out of its 80 percent holding in the Tartu heat supplier, Finland's Kotkan Energia sold a 60 percent stake to Fortum and 20 percent to Giga AS, which previously owned 20 percent of Tartu Energia. As a result, the holding of Tartu-based businessman Tiit Veeber in the utility company rose to 40 percent.

Under a letter of intent signed on last Dec. 31, Fortum was to buy 45 percent of Tartu Energia shares from Kotkan Energia, leaving the latter a holding of 15 percent. But since then the parties have reached agreement on the sale of Kotkan Energia's entire holding.

Tartu Energia's sales last year amounted to approximately 125 million kroons (8 million euros). The company employs 110 people, and much of the energy produced by the company comes from peat and biofuels. (BNS)

Shipper sees profits sink

The Lithuanian shipping company Lietuvos Juru Laivininkyste, which is currently being privatized, saw its pretax earnings drop off to nearly zero in the first quarter of the year, which compares with 1.8 million litas (529,000 euros) for the same period last year.

The company's first-quarter sales of goods and services reached 18 million litas, down by 30.6 percent versus January-March of 2002.

LJL started operating as a separate entity in mid-2001 and earned an audited net profit of 1 million litas in 2002.

The government is selling a 66.66 percent stake in LJL. The companies participating in the privatization tender include a consortium of Denmark's Rederiet Fabricius and Norway's Continental Ship Management, the Danish shipping company Trident and a company formed by LJL management.

LJL owns 19 dry cargo vessels that transport metal, wood, bulk and other products worldwide.

The state is the largest shareholder in LJL with 73.2 percent of shares.

The Danish shipping company DFDS Tor Line owns another 6.34 percent of shares. (BNS)