|
Having Started with Debts, Now Shipping
Company Gets Solid Profit
Anna Vaiciene
JSC Lietuvos Juru Laivininkyste
(LJL) started its activity in 2001, when after privatization and reorganization of
LISCO it was separated into independent shipping company.
The hard start
Conditions, in which newly born company left for
its ‘maiden trip’, cannot be named favourable. Moreover, many were predicting a fast
bankruptcy. As a result of reorganization LJL had to overtake from LISCO about 55
million lt of liabilities in arrears, more than 5 million lt of debts for various
services, and about 2,8 million lt of indebted employees’ salaries. The shipping company
was left without administrative building and had to rent premises at very unfavourable
terms.
But what was of the greatest concern – the state of the fleet: 20 old vessels, including
one sold by LISCO with the last stage of selling procedure left to LJL. Economic
instability factors, as well as an ambiguity on the threshold of a possible new
privatization have not contributed to the confidence for the successful start of the
company and its profitable activity. Only but a few believed in the company’s survival.
The fleet’s renewal
 Yet, the management of LJL was
not as pessimistic. In 2002 a brave decision to develop company’s activity was made,
starting with the fleet’s renovation. That year three out-dated timber carriers were
sold and Staris and Svilas vessels of 9650 tonnes’ deadweight each
were bought. One of the ships was purchased for the company’s funds, the other – under
the 3 million US dollars’ loan. In 2002, the company launched the up-dated ShipNet
system, the building of the former hotel was reconstructed, and the own administrative
premises were equipped. The company got rid of unprofitable coastal objects – rest
houses in Plateliai, Silininkai, Jura Hotel.
”From the very start of our activity we try to work, as all private shipping companies
do, keeping to the principles of efficiency and reasonable economy. Correctness and
justice – is my personal credo and I follow it managing the company, as well,” states
Director General of LJL Vytautas Vismantas.
Since the very beginning, for almost four years the company performed greatly and showed
high economic achievements due to highly qualified management. A fleet was considerably
renewed; the average age of vessels was reduced down to 18 years. All of them are working
in traditional, for dry cargo vessels, market zones.
Ships – all over the world
 Bulkers of Captain Panfilov
type are shipping bulk cargo, fertilizers, and metal to European ports, as well as to
Canada and the USA.
Ships of the Asta type mostly carry timber, metal, bulk, and general cargo to European
ports.
Ships of Uglegorsk, Mindaugas, and Algirdas type, are
traditionally shipping timber, fertilizers, and metal on the Baltic and Mediterranean Sea.
Exploitation of vessels Asta and Uglegorsk type in transatlantic
shipping is more difficult because of insufficient fuel stock and due to weather
conditions. Still they are quite successfully exploited in the Caribbean Sea region and
along West Africa coast, meeting the market requirements in tonnage and shipping
equipment.
Universal dry cargo carriers Staris, Svilas and Skalva are
mainly working in the Caribbean Sea region, and call at Scandinavian and West-European
ports, too. Possessing efficient exploitation characteristics, they are shipping general
and bulk cargo – cocks, fertilizers, grain, etc.
In the beginning of this year ships of the river-sea type Musha and Voke
were successfully sold from the auction. Their exploitation, while shipping timber and
metal around European ports, revealed the lack of effectiveness at rather high expenses
for their technical maintenance. The company was quick to react and use the market
fluctuation prices – by the sale time their prices have increased.
Share prices of LJL are rising
Yet, the company’s motto is to increase profit not by
selling but by expanding and renewing its fleet. In 2004 Skalva vessel was
purchased, in May 2005 a universal dry cargo carrier of a 7000 tonnes’ deadweight will
be bought; it was built 11 years ago in Spain. One more similar ship is planned to be
purchased in the near future. In this way, a stable job place number is guaranteed for 475
seafarers.
LJL in 2004 – 2005 has allocated about 0, 5 million lt for modernization of
info-computerized system for the fleet and coastal services: new programming technologies
have been purchased, computer servers, a new protection system was launched. Up-dated
technologies of the data transmission are installed on the ships.
Resolute and stable company’s activity has been reflected in the rising share prices at
the stock exchange. Three years ago the price was 0,23 lt, now it is 0,61 lt. Last year,
the company’s revenue was around 83 million lt, and nearly 3 million in net profit. Over
1,1 million lt was allotted for shareholders’ dividends.
The shipping company accurately pays all the state bills and strictly keeps to bank credit
payment schedule, which is overtaken from LISCO. During the first quarter of this year 4,3
million lt were transferred for seafarers’ and coastal employees’ salaries, social
security got over 1 million lt, the state got 200 thousand lt in profit taxes.
In 2005, the company is going to repair 11 vessels, this will require great expenses.
Despite this, the expected profit is going to be around 95 million litas.
To privatize – profitably for Lithuania
The privatization, announced right after the company’s
set-up and lasting till the 2004 autumn, was not successful and had to be adjourned for
the indefinite time. Obviously, the failure was caused by too liberal qualification
selection, bringing as a result, unreliable companies or firms with doubtful reputation
and unclear aims into the ranks of potential buyers. Whereas well known in Europe or in
the world companies were not attracted by this privatization.
“It is quite easy to loose the national fleet whereas to create it will require several
decades. The company’s privatization should not become the lucrative profit for a bunch
of ‘white-collors’; it should bring the long-term benefit to the whole Lithuania in
the form of sustainable taxes into the national budget, moreover, it will keep the job
places for seafarers, so it is important to save the national Lithuanian flag on the ships
of the national tramp fleet,” affirms Director General of the Lietuvos Juru
Laivininkyste Vytautas Vismantas.
|
