Rezekne municipality's business trends in 2017-2018

The year spent has been the second year in a row, when the number of liquidated enterprises in the country exceeded the newly registered. The information collected by Lursoft shows that 10 210 new companies have been registered in Latvia in 2017, which is the lowest indicator since 2009, at the same time 16 479 companies have been liquidated, or 34.71 TP1T more than in 2016.
In order to examine how the dynamics of registration and liquidation of enterprises in Rezekne municipality has changed over recent years, Lursoft has conducted research by compiling data for the last ten years. It also analyses the financial indicators of the companies registered in the municipality, the volume of foreign direct investment attracted and aggregated data on the sectors most often operated by the municipality.
It should be noted that the agricultural holding registered in the ancient Rēzekne municipality is ZS “SALAD”, from all of the municipality with limited liability company “NOOK, LTD” of SIA manufacturing company registered in the register of companies, while the “Ludza forestry sector” IS registered in the register in the most ancient register.
Since 2015, there is a tendency in Rezekne municipality to exceed the number of newly registered companies, with the number of companies liquidated last year reaching even 94 companies, while new 54 are registered. The current data for 2018 show that there is also a tendency to increase the number of companies that have been eliminated this year, but there is no longer a significant overweight. In particular, by the time of preparation of the study, 52 companies were liquidated in the municipality of Rezekne in 2018, but new 45 were registered. In analysing the reasons why the number of companies that have been liquidated in Latvia, including Rezekne municipality, has increased significantly in recent years, attention should be drawn to the fact that the registries responsible in recent years actively eliminate companies who are long-standing without a board of directors or have not submitted financial statements for several years. Therefore, the existing process should be seen as an orderly business environment, without any reason to worry about the rapid deterioration of the business situation in Latvia, resulting in sudden liquidation of companies.

Over the past decade, 602 new companies have been registered in Rezekne, but 464 are eliminated, which means that the number of enterprises in the municipality has increased by 138.
Significant overweight between the municipality is farms, representing 55,341 TP1T of all companies registered in Rezekne, but 32,191 TP1T - limited liability companies. In total, 1668 companies are currently registered in Rezekne municipality.
The large proportion of farm holdings is well known, also in the context of the activities of the most popular sectors in the head of the sector.
By analysing the sectors in which companies registered in Rezekne are operating, it is apparent that a significant overweight between companies is dominated by mixed farming followed by retail trade in non-specialised shops. Among THE TOP 5 most popular sectors, not only mixed agriculture but also cereal cultivation.
The most popular business sectors between the companies registered in Rezekne District:
1. Mixed farming;
2. Retail sale in non-specialized stores;
3. Freight transport by road;
4. Harvesting;
5. Growing of cereals (except rice), leguminous crops and oil seeds
The information gathered by Lursoft shows that fifty Rēzekne counters have managed to attract foreign direct investment. The largest of these is the Rēzekne Special Economic Zone SIA “LEAX Rezekne”, registered in 2010, with a share capital of 131.49 thousand. EUR invested by Swedish LEAX Group AB.
It should be noted that the amount of the accumulated investments in the core capital of these 50 companies milj.EU 1,33 million R, which in the municipality of Rezekne after the volume of accumulated investments between all Latvian municipalities ranks in 60 th place. A half or 47,371 TP1T of the total amount of accrued foreign direct investments has been invested by investors from Germany (628,53 thousand EUR), 433,42 thousand EUR – from Russia, but 196.42 thousand EUR – from Sweden. Overall, investments in the capital of the Rēzekne municipality have been invested by investors from 16 countries.
Increased total turnover
Lursoft estimates that the total turnover of companies registered in Rezekne municipality has increased significantly last year. If in 2016 the companies distorted 127.77 milj.EU R, they were already 142, 81 milj.EU R, which is an increase of 11.771 TP1T per year. Meanwhile, the average turnover rate decreased slightly over the last year, dropping by 4.451 TP1T, dropping from 30.34 thousand EUR per company in 2016 to 28.99 thousand EUR per company last year
It is evident that while others have successfully developed their activities, some have not been doing so well as they have successfully developed their activities. For example, SIA “ZAAO SYSTEMS”, which still ranked in 2016 at the high third place between the largest turnover and the largest turnover, was suspended in September of that year on the basis of THE SRS decision. Both arrears and topical securities have been registered for the company, while the tax debt has reached 1.20 milj.EU R.

Since 2001, the largest company in the Rēzekne municipality has remained stable. Rezekne SEZ SIA “VEREMS”. Last year, the company milj.EU 32,80 MILLION R or 1,891 TP1T more than in 2016. THE company owned by LATVIJAS FINIERIS continued to increase the amount of plywood produced in 2017. The annual report mentions that the company sold 45,56 thousand m3 of plywood in the last year.
Turnover of 33.961 TP1T increased in 2010 Rezekne SEZ SIA “LEAX Rezekne”, which, in the last year, distorted 18,92 milj.EU R. aizvadītais was the seventh year of operation of the company, and last year it invested in the purchase of turnaround and gear cuttings with the aim of increasing the production capacity of the company and improving the production processes. The annual report says that 92.101 TP1T from the sales volume of Rezekne SEZ SIA “LEAX Rezekne” is exports. The company's management plans to increase the turnover in 2018, based on the base of the existing order portfolio, as well as the start of production of a new product. In order to ensure the increase in turnover in subsequent years, the acquisition of new production and storage facilities is planned in 2018.
Freight carrier SIA “NB & BV Transport” last year he kept his turnover at the level of the previous year. In 2017, the company amended 4.28 milj.EU R, continuing to operate not only in international freight transport, but also in the unit established during the previous period - retail trade in used clothing and alcoholic beverages.
Logging company registered in 1991 JSC “Ludza Forestry” last year, compared to the year, increased turnover by 12.381 TP1T. In 2017, the company amended 4.22 milj.EU R. last year the company prepared and sold 77.4 thousand m3 of logs, logging and forestry services. Court, the year of reference was completed by 86.16 thousand EUR losses due to weather conditions.
List OF TOP 5 largest companies is concluded by a timber processing company SIA “BAIBA” with an increase of 29,981 TP1T during the year. In 2017, the company amended 3.70 milj.EU R.
Lursoft estimated that, from all the companies registered in Rezekne, who had received revenue from economic activity last year, 60.701 TP1T had managed to increase turnover during the year.
Rezeknes is led by the largest companies after turnover in 2017:
1. Rezekne SEZ SIA “VEREMS”: 32,80 milj.EU R;
2. Rezekne SEZ SIA “LEAX Rezekne”: 18.92 milj.EU R;
3. SIA “NB & BV Transport”: 4,28 milj.EU R;
4. AS “Ludza forestry farm”: 4,22 milj.EU R;
5. SIA “BAIBA”: 3,70 milj.EU R.
Overall profits increased significantly
The year spent marked positive growth, both in terms of the total profit of the companies registered in Rezekne and the average. Novada companies have earned 15,22 milj.EU R or 52.811 TP1T more than 2018. The average has also experienced growth. If, in 2016, each company registered in Rezekne's municipality worked with an average of 45 euros, then the previous year was already concluded without losses, however, no profit was obtained.
Lursoft estimated that, from all of the companies who had earned revenue from economic activity last year, 58,961 TP1T had concluded a positive result for the year. In turn, 54.971 TP1T companies managed to increase their profits during the year or reduce their previous year losses.

There are several companies in the first places that have been able to even double or even triple over the year. For example, THE profit of SIA “PARTICLE PV”, compared to 2016, grew by 125.481 TP1T, the farm “SALAD” – by 293.411 TP1T, while SIA “LESIS” - even by 421.281 TP1T.
The Rēzekne municipality has also been the largest company in the past year. Rezekne SEZ SIA “VEREMS”which, due to improvements in production processes and increase in volume, continued to be profitable in 2017. In the year spent, the company's profits increased by 26.561 TP1T and reached 8.09 million last year. EUR. In second place Rezekne SEZ SIA “LEAX Rezekne” the profit, compared to 2016, increased by 66.851 TP1T, reaching 2.29 milj.EU R, but the already mentioned logging company SIA “PARTICLE PV” profits increased to 0.91 milj.EU R, which is an increase of 125.481 TP1T per year. Last year, the company continued to purchase and develop forest felling, thus in 2018, the company plans to increase the volume of felled felling and prepared logs. IN February of that year SIA “SACHET PV” concluded a contract with Latvijas valsts meži for harvesting services until 31 December 2021.
Among the largest earners of Rezekne is also one farm - Sakstagala civil parish ZS “HEATHER AG”, which earned 0.25 milj.EU IN 2017 compared to 2016, is 61.531 TP1T more. The holding is partly planned to be paid in dividends last year.
The largest earner list in position 5 is located at SIA “SPRUŽEVA M” with a 0,23 of 0,23 milj.EU R. The company's board of directors has suggested that the profits earned last year should be retained. The company working in the dairy farming sector was registered in 1992 and owns parts of livestock farming in SIA “ZIGOTA” (2.201 TP1T) and SIA “Latvian beef breeders' association” (1.511 TP1T).
Rezeknes is led by the largest companies after profit in 2017:
1. Rezekne SEZ SIA “VEREMS”: 8.09 milj.EU R
2. Rezekne SEZ SIA “LEAX Rezekne”: 2.29 milj.EU R;
3. SIA “PARTICLE PV”: 0,91 milj.EU R;
4. Sakstagala parish ZS “HEATHER AG”: 0,25 milj.EU R;
5. SIA “SPRUŽEVA M”: 0.23 milj.EU R.
Number of employees increased again
Last year, the total number of employees in the companies registered in Rezekne's municipality decreased significantly, but there was a slight increase in the number of employees in 2017. Lursoft estimated that, from all companies registered in Rezekne, who received revenue from economic activity in 2017, 26,871 TP1T companies increased the number of employees during the year, while 51,741 TP1T, compared to 2016, remained unchanged.
It is noted that the average number of employees in Rezekne municipality has remained unchanged in recent years. In particular, an average of 2 employees are employed in the Rēzekne municipality.
In 2017, 3 112 people were employed in the municipality of Rezekne, 1.301 TP1T more than in 2016.

The largest employer between the municipalities is: Rezekne SEZ SIA “VEREMS”. The company has very low frames and the number of employees has remained virtually unchanged in recent years. The annual report presented shows that 332 employees worked in the company in 2017.
For 23,681 TP1T employees in more than one year, Rezekne SEZ SIA “LEAX Rezekne”. If 152 workers worked in the company in 2016, they were already 188 last year.
For 10 employees more than a year ago, he was a wood-processing company SIA “BAIBA”. In particular, in 2017, 88 people worked in the company, while SIA “SPRUŽEVA M”, both JSC “Ludza Forestry” in the last year, 69 people were provided with jobs. For the first number of employees in the year, the number of employees has increased by 8 people, the second declined by 1 worker.
Rezekne is led by the largest employers after the average number of employees in 2017:
1. Rezekne SEZ SIA “VEREMS”: 332 employees;
2. Rezekne SEZ SIA “LEAX Rezekne”: 188 employees;
3. SIA “BAIBA”: 88 employees;
4. SIA “SPRUŽEVA M”: 69 employees;
5. JSC “Ludza Forestry”: 69 employees.
The amount of taxes paid over the year has increased by 9.961 TP1T
Data published by the State Revenue Service indicate that in 2017 Latvian companies paid 6.57 billion euros in taxes or 7.181 TP1T more than a year before. 30.591 TP1T of the total tax amount consists of mandatory social insurance contributions, while another 18,111 TP1T – personal income tax.
Last year, THE amount of tax administered BY THE SRS has also increased, which has been paid by companies registered in Rezekne municipality. If they were 8,03 milj.EU R in 2016, they were already 9,961 TP1T more, i.e. 8,83 milj.EU R.
The most convincing tax payer between the companies registered in Rezekne municipality has also been in 2017. Rezekne SEZ SIA “VEREMS”. In last year, the company paid 2.47 milj.EU R or 12.541 TP1T more than in 2016.
In second place with 647,01 thousand FOR large tax payments in 2017, seven municipalities belong to SIA “ALAAS”. In the last year, THE waste management company SIA “ALAAS” amended 1.48 milj.EU R and concluded a year with 2.02 thousand. EUR profit. At the landfill site of SIA “ALAAS”, 17,60 thousand tonnes of waste were accepted in the landfill site “Križevņiki” last year.
SIA “SPRUŽEVA M” IN 2017, THE SRS paid 494.76 thousand in 2017. Eur 37,531 TP1T more than in 2016, Rezekne SEZ SIA “LEAX Rezekne” – 441.44 thousand EUR (+39,141 TP1T), but JSC “Ludza Forestry” – 374.84 thousand EUR (-13,821 TP1T).
The largest taxpayers of Rezekne are the total amount of tax administered BY THE SRS paid in 2017:
1. Rezekne SEZ SIA “VEREMS”: 2473.15 thousand EUR;
2. SIA “ALAAS”: 647,01 thousand EUR;
3. SIA “SPRUŽEVA M”: 494.76 thousand EUR;
4. Rezekne SEZ SIA “LEAX Rezekne”: 441.44 thousand EUR;
5. AS “Ludza forestry farm”: 374.84 thousand EUR.
* data on Rēzekne District Enterprises calculated on 01.11.2018.
* * averages calculated using median median.
* * * source of information for tax on tax paid by companies - State Revenue Service.
Source: Lursoft