In 2007 the Group concentrated its operations into six business sectors
Retail clothing trade
For the fourth year in a row, the growth rate of the AB Apranga group of companies has exceeded 40 %. The group rapidly expanded the number of retail outlets and the amount of floor space when extending its activities to the Latvian and Estonian markets. During 2007, the amount of floor space in operating retail outlets reached 54,000 m², an increase of 39 % over the year. As of 31 December 2007, the AB Apranga group controlled a network of 83 operating retail outlets in the Baltic countries, and it had invested 39 million LTL in this retail network’s expansion. In 2008, the AB Apranga group is planning to increase consolidated sales to 491 million LTL, earning about 39.5 million LTL profit before tax.
AB Apranga shares are traded in the Vilnius Stock Exchange. As of 31 December 2007, the AB Apranga group’s capitalisation level was 506.44 million LTL (against 465.85 million LTL in 2006). As of 31 December 2007, UAB MG Baltic Investment, a subsidiary of the MG Baltic Group, controlled 52.5 of AB Apranga’s authorised capital.
Trading and distribution of widely-used consumer goods
In 2007 the most important companies in this sector were still UAB Mineraliniai vandenys and UAB Tromina.
The core activity of UAB Mineraliniai vandenys is wholesale trading of widely-used consumer goods. This company engages in wholesale trading of widely-used consumer goods including alcoholic beverages and tobacco products in accordance with procedures laid down by law. In 2007, the company’s sales reached 541 million LTL. The company imports and distributes in the Lithuanian market more than 700 alcoholic beverage brand names from all over the world. The company’s partners are globally renowned manufacturers of such brands as Moet & Chandon, Metaxa, Grant’s, Camus, Hennessy, Antinori, Baron and Philippe de Rothschild S.A. The company also distributes British American Tobacco Nordic and Japan Tobacco International tobacco products, food products from globally renowned manufacturers and widely-used consumer goods.
In extending the geographical range of its activities, in 2007 the company established or acquired subsidiaries in Latvia (SIA Mineraliniai vandenys Latvija), Estonia (OU Mineraliniai vandenys) and Poland (SP. zo.o. MV Poland). In 2008, the company plans to achieve a sales target of 599 million LTL and to further expand its activities in the Polish, Latvian and Estonian markets.
The fundamental field of activity of UAB Tromina is fast moving consumer goods such as alcoholic beverages and tobacco, food, household chemical products, etc.: their warehousing, inventorising and distribution to retail and wholesale merchandising firms. In 2007, the company achieved sales of 29.2 million LTL, i.e. 16 % more than last year.
Media
In 2007 the UAB MG Baltic Media group of companies was formed. The basis of the holding company was UAB Laisvas ir nepriklausomas kanalas, UAB Alfa Media and UAB Neo–Press. In 2007 UAB MG Baltic Media acquired 50 % of the shares of UAB UPG Baltic plus 51 % of the shares of UAB Mediafon. The core activity of UAB UPG Baltic is publishing newspapers, and that of UAB Mediafon is telecommunications transit and content services.
LNK (UAB Laisvas ir nepriklausomas kanalas) is one of the leading national channels in Lithuania. In the middle of 2006 LNK became the operator of 4 digital channels which began to be used for atmospheric digital broadcasting of LNK and TV1 programs. Since 2007 these channels are also being used for the INFO TV (19 hours a day) informational programs and the LIUKS! music program (24 hours a day).
The news portal www.alfa.lt, which is controlled by UAB Alfa Media, is a unique, original website with two distinct basic sections: a section with original news reports and current affairs plus an extensive “Life” section, aimed at providing the reader with cultural news and information about forthcoming events. With an active advertising campaign in place, during the period March–December 2007, the portal’s attendance increased 2½ times, and in December 2007, it reached 515,000 unique users.
UAB Neo-Press is the publisher of the magazines Viltys ir likimai [‘Hopes and Destinies’], Nuo... iki... [‘From ... to ...’] and Istorijos [‘(Personal) Histories’].
UAB UPG Baltic is a publishing firm controlling 30 magazines, which constitute about 23 % of the market in Lithuania. From 1996 to 2007 the firm operated as a unit of UAB Indiza. In 2007, it was sold off from UAB Indiza and the controlling interest (50 % of shares plus one) was acquired by the MG Baltic Media holding company.
UAB Mediafon is a telecommunications company involved in call transit and content services technical support. In the transit field, UAB Mediafon is the only operator having interconnections with all Lithuania’s major operators (TEO LT, Bitė Lietuva, Omnitel, and TELE2) and able to provide virtual operators with comprehensive one-stop service provision solutions (website hosting, telephone number transfers, provision of numeration). In the field of content services technical support, UAB Mediafon provides all the necessary services: SMS, IVR, technical voice support, TV voting and other project services. UAB Mediafon serves almost all TV voting and other television IVR services projects taking place in Lithuania. The company uses the latest technology (Thomson, Cirpac), which reduces expenses and enables it to work effectively. UAB Mediafon was the first company in the Baltic countries and the third in Eastern Europe to acquire such advanced technical equipment.
Real estate management and project development
This is the sector for the businesses of the UAB MG Valda holding company.
The principal activity of UAB MG Valda is investment in real estate development projects, rental of real estate, management and administration, sale of real estate and consultancy on real estate projects, construction, development and sale. In 2007 the UAB MG Valda group of companies achieved consolidated sales of 37.6 million LTL.
In 2007, the real estate portfolio of the MG Valda group companies grew and by the end of the year the group controlled more than 100,000 m² of offices, commercial buildings, warehouses, apartments and other assets. The largest is the Verslo trikampis (‘Business Triangle’) complex of offices and commercial premises, in which many of the head offices of well known Lithuanian or foreign firms are located, likewise the modern storage depot and logistics centre in V. A. Graičiūno Street, Vilnius.
In 2007, the planning phase was completed and construction began on the multi-function Šiaurinė žvaigždė (Northern Star) complex. It is envisaged that a total of more than 110 million LTL will be invested in this 19,000 m² business centre and residential complex in Šiaurės miestelis that will open its doors in 2009. The project will be noted for its modern technology and various innovative solutions in home and office design and construction.
Apartments in the new residential complex Smėlio namai in Antakalnis, Vilnius are now being reserved for purchase. When the project is finished at the beginning of 2009, keys to the apartments will be handed to 52 owners of fine, high-quality flats. It is envisaged that a total of around 23 million LTL will be invested in this 3,450 m² residential project.
In 2007, construction commenced of the Vitas Gerulaitis Tennis Academy complex. In this multi-function sports, active leisure, entertainment and health services complex occupying 20,000 m², there will be 19 closed and 4 open/transformable sports areas, a 500-place fixed grandstand and a 500-place demountable grandstand, areas for aerobics, training, conferences and physiotherapy, massage cabinets, a beauty salon and a specialised sports goods shop. In 2006 this project was given recognition as a project of national importance. Completion of the project is envisaged for the end of 2008. The project is being implemented by the Vitas Gerulaitis Tennis Academy, one of the sponsors of which is UAB Teniso pasaulis (‘Tennis World’).
UAB Megarenta, of which one of the shareholders is MG Valda, has commenced the construction of the most modern bakery in the Baltic countries. As of mid-2008, the project sponsor – UAB Vilniaus duona, which is a subsidiary of the Finnish company Vaasan&Vaasan – will transfer production and logistics to new modern premises in V. A. Graičiūno Street, Vilnius.
Construction
The most important company in this sector is the Kaunas construction firm UAB Mitnija, which was acquired in 2006.
UAB Mitnija is one of the leading construction firms in Lithuania, having earned clients’ trust through high quality work. The firm has a comprehensive array of construction technology, and metal workshop. In 2007, the UAB Mitnija group of companies achieved consolidated sales of 236.4 million LTL.
Last year UAB Mitnija won tenders to construct two EU-funded objects: the reconstruction of the Lithuanian Ethnocosmology Museum and Astronomical Observatory in Molėtai and the Vitas Gerulaitis Tennis Academy complex in Vilnius.
UAB Mitnija received a gold medal for Lithuanian Product of the Year 2007 for its construction of the Akropolis entertainment and commercial centre in Kaunas in 2007. Also in 2007, two of the company’s own initiated projects were successfully completed: a residential complex in Krėvės Prospect, Kaunas, was built and sold; likewise an apartment complex in prestigious Kiškių Street, Kaunas.
In 2008, the firm has plans for further construction activities for industrial and residential buildings, completing projects already under way and actively implementing new projects.
Manufacturing
This sector is represented by Lithuania’s oldest manufacturer of strong alcoholic beverages, AB Stumbras, together with AB Biofuture, which was separated from AB Stumbras in a restructuring at the end of 2005.
The principle activity of AB Stumbras is the production and sale of alcohol products. In 2007 the firm achieved sales of 168.5 million LTL and it earned 32.7 million LTL clear profit. It introduced into the market a number of new high-quality products such as quince-flavoured Originali lietuviška degtinė (‘Original Lithuanian Vodka’) and Stumbro duonos degtinė (‘Stumbras Bread Vodka). At tastings at one of the world’s largest hard liquor shows, Russia’s Prodexpo 2007, Stumbras Šimtmečio (‘Century’) vodka won a gold medal for its high quality. At the San Francisco World Spirits Competition 2007, a gold prize was won by Originali lietuviška auksinė (‘Original Lithuanian Gold’) voda. In 2007 the firm further increased the geographical range of its exports, and export sales grew 112 % compared to 2006, reaching a value of 15.3 million LTL.
Because of unfavourable developments in the financial markets in 2007, UAB MG Baltic decided not to go ahead with the planned reduction of its holding in AB Stumbras.
AB Stumbras shares are traded on the Vilnius Stock Exchange. As of 31 December 2007, the capitalisation of AB Stumbras was 467.2 million LTL (compared with 321.45 million LTL in 2006). As of 31 December 2007, UAB Mineraliniai vandenys, a subsidiary of UAB MG Baltic, controlled 93.7 % of AB Stumbras’ authorised capital.
AB Biofuture, now independent from AB Stumbras, has as its main activity the production of distilled, dehydrated ethyl alcohol (bio-ethanol). In 2007, the firm achieved sales of 47.5 million LTL.
In 2006, AB Biofuture approved a project to increase production capacity, and in 2007 it continued its investment program, seeking to increase present production capacity to 36,000 tonnes of bio-ethanol per year and to reach sales of about 90 million LTL.
In 2008, it is forecast that the value of companies controlled by the
UAB MG Baltic group will continue to grow. It is likewise forecast that the turnover and sales of the
AB Apranga will continue to grow. The goals set for
AB Stumbras and
UAB Mineraliniai vandenys are to expand export markets and to get firmly established in the markets of neighbouring countries. The goal set for
UAB MG Baltic Media is to strengthen the position already held in the market. The goals set for the
UAB MG Valda companies are to continue cooperation with business partner
AB Invalda in successfully expanding the already initiated common real estate development projects in Latvija, and to continue successfully expanding the residential and commercial building project already initiated on land controlled by the City of Vilnius. The goals set for
UAB Mitnija are to complete the projects initiated in 2007 and through participation in tendering, to ensure a sufficient work program for 2009. The goal set for
AB Biofuture is to double its bio-fuel production capacity to 36,000 tonnes per annum and to successfully implement its confirmed investment project.
