In Brief - 2003-06-19

  • 2003-06-19
Lietuvos Telekomas getting out the ax
Lietuvos Telekomas plans to fire about one-fifth of its employees by the end of the year, the company said in a press release last week.
The telecommunication group plans to have just 3,400 employees by the end of 2003, compared with 4,500 employees at the beginning of the year. The fixed-line phone operator had 10,200 employees in 1997 when it was a state-owned company.
"We have evaluated our results and decided to improve the effectiveness of the operations at separate divisions by regulating the number of employees," Romualdas Degutis, company vice president, said.
Lietuvos Telekomas posted an income of 203.9 million litas (59 million euros) in the first quarter of 2003, a 17 percent decrease from 2002's results year-on-year. The company's net profit decreased 10.5 times year-on-year to 2.03 million litas. Sales declined as the income from fixed-line services reduced by 25.3 percent to 158.6 million litas. (Baltic News Service)

Ventspils port boosting rail deliveries
A railway bypass was officially opened in the northwestern Latvian port of Ventspils on June 12 that will improve the port's inadequate railway capacity that is now deemed essential as the de facto Russian oil embargo via pipeline continues.
Latvijas Dzelzcels (Latvian Railway) said the Juras Parks railway bypass in Ventspils, which cost $19.5 million, is part of a national investment program that aims to upgrade the East-West transit corridor and strengthen Latvia's competitive position in the Baltic transit business.
The railway bypass will allow for increased speed of rail car reloading, an important factor in determining freight costs, and will reroute dangerous chemical and combustible cargos around residential areas, thus improving the environmental situation in the city.
Construction of the Juras Parks railway facility began in 2002, with 90 percent of financing coming from the European Bank of Reconstruction and Development and 10 percent from the railway infrastructure fund. (BNS)

Rape oil producer's future in doubt
The production system of the cooking oil producer Werol Tehased (Werol Factories) is not sufficiently flexible in light of today's market requirements and is in need of reorganization, new CEO Erki Aavik said.
"The supervisory council of Werol has given me a couple of months to find answers to questions whether the business can in its present form be made profitable at all," Aavik said. "Many circumstances put this in doubt."
Aavik said Werol was too small a company for competing with other cooking oil producers since it was set up solely for hot pressing of rape oil. "Large factories are at the same time universal - they make the kind of oil the market is currently demanding," he explained.
In his words, Werol's situation differs from that of other producers in that the majority owner is the Estonian state, which wants to secure jobs for domestic rape growers. (BNS)

Estonia using less Latvian kilowatts
Eesti Energia, the national energy company, imported 36 gigawatt-hours of electricity generated in Latvian hydroelectric power plants this spring, which is about five times less than over the same period in 2002.
In both 2002 and 2001, Estonia imported about 200 gigawatt-hours of electric energy from Latvia during the period of spring floods. However, imports of Latvian hydroelectric energy this year were based upon the optimal load regime for the oil shale-fired plants in Narva, Eesti Energia said.
"The Daugava River flood began a month later than normal, and there was exceptionally little of it. Due to the relatively cold weather, consumption of electric energy in Latvia was higher than usual. Therefore, five times less hydroenergy than usual was exported to Estonia," Marko Allikson, director of the service unit at Eesti Energia, said. (BNS)

Lindeks cranks up profit
Lindeks, one of Latvia's largest forestry companies, posted a profit of 738,300 lats (1.1 milion euros) in 2002, well above its target of 350,000 lats, on sales of 20.4 million lats, said the company's president.
Indulis Kovisars said that Lindeks last year sold 178,100 cubic meters of sawn products. "The second half of the year helped greatly - both because demand on sales market increased and thanks to Britain's pound sterling, which allowed the company not suffer loss from currency exchange rate fluctuations," said Kovisars.
He said Great Britain was Lindeks largest market last year, with the country importing 13.8 million lats' worth of its products.
Kovisars described the overall market situation as unstable, as Latvia's production capacity exceeds available resources, which is pushing up prices of raw material. (BNS)

Swap ratio to be hammered out
The Lithuanian Economy Ministry and German's energy group E.ON Energie have begun negotiations to set a ratio for the planned swap of state-owned shares in Lithuania's two power distribution companies.
"We have got a shares' valuation report. We are going to table our positions this week. If our positions turn out to be quite close, we can expect to complete this week," Lithuania's Deputy Economy Minister Nerijus Eidukevicius said.
E.ON Energie wants to swap its holdings in two state majority-owned companies -- the power transmission company Lietuvos Energija (Lithuanian Energy) and the thermal power plant Lietuvos Elektrine -- for state-owned shares in the power distribution companies, Vakaru Skirstomieji Tinklai and Rytu Skirstomieji Tinklai.
E.ON Energie now holds 10.9 percent of shares in each of the four companies. (BNS)