Rezekne's business trends in 2020-2021

When the lowest number of newly registered companies in the past 17 years was registered in 2020, the number of new enterprises in Latvia has been cautiously increased. 

Data from the Lursoft study reveal that 9227 new companies were registered in Latvia in 2021, but 14159 companies were liquidated. In analysing the dynamics of the registration of new companies in 2021, it is apparent that last year, although the Covid-19 pandemic and its restrictive measures have continued, there is no such rapid decline in the number of new enterprises as it was in 2020. 

Unlike the total number of new business registers in the country, the drop in the number of newly registered companies in the Rēzekne municipality has not been so significant in 2020. Data from the Lursoft study shows that 61 new companies have been registered in the Rezekne municipality in 2020. Although it is about 12 companies less than in 2019, the number of new companies in the past decade has been both 2018 and 2017. 

In the last year, 66 new companies were registered in Rezekne, but 72 were liquidated. In the last two years, the number of companies liquidated in the municipality has remained unchanged. 

In the first five months of this year, 19 new companies were registered in Rezekne, but 23 were eliminated.

In total, 744 new companies were registered in the municipality of Rezekne over the past decade while 660 were liquidated. This means that in the period since 2012, the actual number of enterprises in Rezekne has increased by 84 entrepreneurs.

Currently, 1918 companies are registered in Rezekne municipality, of which 49,95 % are farms, 36,97 % - limited liability companies.

The most frequently represented business sectors in Rezekne District are agricultural sub-sectors, as well as retail and freight transport, logging.

Most popular business sectors in Rezekne municipality:

• Mixed farming;
• Growing of cereals (other than rice), pulses and oilseeds;
• Retail trade;
• Freight transport by road;
• Harvesting.

At the same time, in terms of turnover, the largest sector in 2020 in Rezekne municipality was the production of veneer sheets and wooden panels, which combined 31,05 million overall. EUR. It must be noted that it is only one company, RSEZ SIA “VEREMS”. In terms of second turnover, the largest sector in Rezekne municipality has been the production of metal structures. As in the case of the production of veneer sheets, there is also a single company, RSEZ SIA “LEAX Rezekne”, which is also the sole resident company in the sector.

The largest business sectors in Rezekne are transported by total turnover in 2020:

1. Manufacture of veneer sheets and wood panels: 31,05 million EUR;
2. Manufacture of metal structures and components thereof: 25,48 million EUR;
3. Freight transport by road: 19.68 million EUR;
4. Sawing, planting and impregnation: 14.35 million EUR;
5. Mixed agriculture: 13,96 million EUR.

Lursoft has investigated that foreign direct investments have been invested in the equity capital of 36 companies registered in Rezekne. The total investment of foreign investors in the capital of the capital of registered companies accounts for 1.6 million lats. IN EUROS, which after accumulated foreign investment in equity capital between all Latvian municipalities in 38 th place, next to the prize and the Alūksne municipality. Major investments in Rēzekne municipality companies come from Denmark (1.07 million EUR). Overall, foreign investments in the capital of Rezekne are currently registered from 12 countries.

Total turnover increased

Last year, the total turnover of companies registered in Latvia decreased by 7.441 TP1T, decreasing to €61.8 billion. Meanwhile, the total turnover of registered companies in Rezekne municipality has shown an opposite trend in 2020 – it has increased by 2.91 TP1T during the year, reaching 212.06 mln lats. EUR. At the same time, despite the fact that the overall result has continued to show positive growth, the average per company has continued to decrease.

If the companies registered in the Rēzekne municipality in 2018 each exchanged an average of 33.89 thousand EUR, then in 2019 they were 29.12 thousand IN 2020, the indicator continued to decrease, decreasing to 25.48 thousand. EUR.

The increase in total turnover, as opposed to the average of average, is explained by a more rapid increase in turnover of individual companies registered in Rezekne.

From all companies registered in Rezekne, which have received revenue from economic activities in 2020, the increase in turnover in 2020 was reported by 55.31 TP1T.

With turnover exceeding 1 million IN 2020, 32 companies registered in Rēzekne municipality have been employed in 2020. The year previously, there were 36 companies.

Since 2001, RSEZ SIA “VEREMS” has been the largest company in Rēzekne municipality. The plywood manufacturer amended 31,05 million in 2020. EUR. Compared to the year, the manufacturer's turnover decreased by 5.611 TP1T in 2020. It is positive that last year, in 2021, RSEZ SIA “VEREMS” once again managed to increase its turnover, reaching 34.97 million lats. EUR. This is an increase of 3.9 mln lats during the year. EUR. Despite the rapid increase in resource prices, the company continued to perform well, achieved good results and continued to work with profit, “Latvijas Finieris” in the management report of RSEZ SIA “VEREMS”. 

IN terms of turnover, RSEZ SIA “LEAX Rezekne”, who managed to increase turnover by more than a third, was placed in place of the largest number of companies in Rezekne. The annual report available by Lursoft shows that, as the turnover grew by 34,201 TP1T, in 2020, RSEZ SIA “LEAX Rezekne” was amended by 25.48 mln lats. EUR. In its management report, the mechanical component manufacturer RSEZ SIA “LEAX Rezekne” pointed out that in 2020 it has carried out the purchase of modern equipment for the expansion of the production group, which produces parts for the transmission of passenger cars. This production group started production in the second half of 2020 at full planned level. It should be noted that 97.341 TP1T of RSEZ SIA “LEAX Rezekne” was formed by exports in 2020. 

Among THE TOP 5 listed companies, the fastest increase in turnover in 2020 was shown by the quarry company SIA “VLAKON”. Turnover of the company grew from 5.07 million lats Eur in 2019 to 9,65 million EUR 2020. The management report says that SIA “VLAKON” started production of asphalt concrete in 2020. 

Not so successful 2020 was THE SIA “LOBES” working in the woodworking sector, with a turnover of 29,201 TP1T less than in 2019. 

The turnover in 2020 also shrunk TO Sakstagala parish farm “HEATHER AG”, the information available in Lursoft. The farm was swapped by 6.2 mln lats. EUR, by 6,771 TP1T less than a year before. At the same time, there has been a sharp rise in turnover last year. According to data, in 2021, THE turnover of “HEATHER AG” increased by 52.411 TP1T, reaching 9.45 million lats. EUR. Also in 2022, the farm plans to increase turnover, attract new customers and continue to stabilise the financial situation. 

Rezeknes is led by major companies after turnover in 2020:

1. RSEZ SIA “VEREMS”: 31,05 million EUR;
2. RSEZ SIA “LEAX Rezekne”: 25.48 million EUR;
3. SIA “VLAKON”: 9.65 million EUR;
4. SIA “ALGAE”: 7.34 million EUR;
5. Sakstagala parish ZS “HEATHER AG”: 6.20 million EUR. 

Total profit slightly increased

The total profit of the companies registered in Rezekne municipality has shown a slight increase in 2020, but has not yet returned at the level of 2018 when the companies registered in the municipality earned 21,99 million lats. EUR. Data from the Lursoft study reveal that in 2020, the companies of Rezekne municipality earned 18,15 mln lats. EUR. 

At the same time, statistics show that the average profit margin, despite the fact that the overall result has shown positive growth, has shrunk. In 2020, the average profit rate of the companies registered in Rezekne municipality decreased to EUR 0. 

From all companies registered in Rezekne, who received revenue from economic activity in 2020, they worked in 61,661 TP1T. At the same time, it should be noted that the profit/loss result has improved in the last year at 52,41 TP1T. 

The biggest losses between companies registered in Rezekne municipality in 2020 were SIA “Inteco Wood”, which ended the last year with 532.35 thousand. EUR losses. Lursoft inquiry information shows that several arrears have been registered for the company at the moment, the security has been applied, as well as at the end of May it had been accumulated at 191,78 thousand A large tax debt OF EUR. In order to provide support to Covid-19 crisis, THE SRS has repeatedly supported the distribution of tax payments due TO SIA “Inteco Wood”, as well as grants paid to the company to ensure the flow of working assets, the remuneration of the employees in the idle.

The only one of Rēzekne is the TOP 5 companies in the list of top 5 companies, whose profits in 2020, compared to 2019, have decreased, is RSEZ SIA “VEREMS”. As opposed to 5.75 million IN 2019, THE profits of THE EURO decreased by 28,851 TP1T, decreasing to 4,09 million lats. EUR. The fall in the company's profits also continued last year, with the indicator falling to 2.52 mln lats in 2021. EUR. Despite the sharp rise in resource prices, the company continued to be successful, achieving good results and continuing to work with profit. The advantage of the company's competitiveness is speed, flexibility and work efficiency, “said RSEZ SIA“ VEREMS ”in the management report. This year, the company plans to maintain the results achieved. 

As a result of rapid increase in turnover, the profits of SIA “VLAKON” also increased significantly in 2020, with a tax rate of 2.37 mln lats. EUR. It should be noted that the 2020 result is the highest profit rate achieved by SIA “VLAKON”. 

“Stružānu peat factory” has also managed to increase profits in 2020, according to data available in Lursoft. Last year, the company earned 0.95 million IN EUR, whereas it reached 1.14 million last year. EUR. Last year, THE “Stružānu peat factory” in marshes took over 31% more mills than a year before. At the same time, the company has indicated that the production volume was by 12.31 TP1T lower than in 2020. “Investments in the field of peat fields, improvements in driveways, purchase and improvement of tractor machinery” are “indicated IN the management report OF THE“ Stružānu peat factory ”. This year, the most topical risk of the company, which may affect its activities, is sanctions imposed against Russia and Belarus, including vis-à-vis banks. Because of these, it is not expected when and whether it will be possible to get back the loan to related sister companies. 

After the RETURN of RSEZ SIA “LEAX Rezekne” in 2019, the profits dropped to 312,93 thousand IN 2020, a profit increase was achieved, increasing to 771.82 thousand. EUR. 

The Rēzekne municipality's LIST OF TOP 5 floating companies is concluded BY THE “animal testing station Latgale”, which increased the profit by 30.81 TP1T in 2020, rising to 575.04 thousand. EUR. Last year, the profit reduction of the company was registered to 400,94 thousand EUR. In the last year, the company managed 1802 ha of agricultural land, of which 1493 ha was land. In total, in 2021, THE “livestock test station Latgale” produced and marketed 5909 tonnes of milk, 222 tonnes of beef and sold 33 breed cattle.  

Rezeknes is led by major companies after profit in 2020:

1. RSEZ SIA “VEREMS”: 4.09 million EUR;
2. SIA “VLAKON”: 2.37 million EUR;
3. AS “Stružānu peat factory”: 0,95 million EUR;
4. RSEZ SIA “LEAX Rēzekne”: 0.77 mln EUR;
5. AS “animal testing station Latgale”: 0.58 million EUR. 

Number of employees smaller

On the basis of the INFORMATION published BY THE SRS on the number of employees, it is shown that the number of employees in the municipality of Rezekne has decreased during the last year. 

If 4012 employees were employed in 2020, then last year – 3973. 

Last year there were 82 companies employing at least 10 employees. There were 79 companies in the past year. 

It should be noted that the average number of employees in the companies registered in Rezekne municipality last year remained at the level of the previous years, and in 2021, in each of the Rezekne municipality, an average of 2 employees was employed.

Last year, three companies were registered in Rēzekne municipality, with a number of employees exceeding 100 employees. The leader among them is RSEZ SIA “VEREMS”, who was the employer of 338 employees in 2021. The information published BY THE SRS shows that the number of employees in the company has increased by 7 employees last year. For 3 employees more than a year previously, RSEZ SIA “LEAX Rezekne” was also employed, who employed 243 workers in the last year. The third company in Rezekne municipality, whose number of employees exceeds 100 employees, is SIA “VLAKON”. According TO THE information published BY THE SRS, the number of employees in the company has increased by 60, reaching 155 employees. 

In contrast to the companies in the first three places of the list, THE number of employees OF SIA “ASKO AS” has continued to shrink in 2021. According TO THE information published BY THE SRS, the construction company was an employer for 72 employees last year, for 12 workers less than in 2020. It is noted that last year SIA “ASKO AS” 200 thousand THE AMOUNT of THE money received IN THE amount OF EUR SHALL be paid to ensure the flow of working assets, as well AS THE SRS paid compensation to the employees of the company. 

The list of largest employers is concluded by the timber processing company SIA “RITAL TIMBER” registered in 2018, which employs 70 workers last year. The information published BY THE SRS shows that THE number of employees of RITAL TIMBER is increasing over the year, with more than 16 people growing over the last year.  

Rezekne is led by the largest employers after the average number of employees in 2021:

1. RSEZ SIA “VEREMS”: 338 employees;
2. RSEZ SIA “LEAX Rezekne”: 243 employees;
3. SIA “VLAKON”: 155 employees;
4. SIA “ASKO AS”: 72 employees;
5. “RITAL TIMBER”: 70 employees. 

Amount of taxes paid increased

The amount of taxes paid by companies registered in Latvia in the general budget of Latvia increased in the last year. The SRS information collected by Lursoft shows that in 2021 companies paid €8.27 billion in tax payments, including €1.43 billion in income tax and €2.80 billion in national social insurance contributions. 

Last year, the amount of taxes paid by companies registered in Rezekne municipality has also increased. If they were 14.61 million in 2020 EUR, then last year – 15,1 million EUR. This is an increase of 3.351 TP1T during the year. 

More than 1 million THE AMOUNT OF EUR in tax payments in the municipality of Rezekne has been paid by two companies in the last year.

The largest taxpayer is the largest company RSEZ SIA “VEREMS”. Last year, it paid 2.75 mln lats in tax revenue administered BY SRS. Eur 8,241 TP1T more than a year before. 

The second largest taxpayer in the municipality has been the municipal capital company SIA “ALAAS” last year, whose tax amount has increased to 1.26 mln lats in 2021. EUR. Of which 196,25 thousand THE EURO was composed of compulsory social insurance contributions, but 82.15 thousand EUR – personal income tax. In the company, 52 workers were employed last year. 

In 2021, THE amount of tax paid BY RSEZ SIA “LEAX Rezekne” was also increased to 0.82 mln lats. EUR (+10,591 TP1T over a year), as well AS THE amount of tax contributions of THE “Stružānu peat factory” in the general budget of the State (0.56 million EUR large tax payments in 2021, by 2.071 TP1T more than in 2020. 

Among THE TOP 5 taxpayers, the only one whose tax contribution to the general budget of the country has declined last year is THE “livestock test station Latgale”. The Court's fall was low, by 1.281 TP1T. In 2021, the company paid 0.44 million in tax revenue administered BY SRS. EUR. Of which 0.2 million THE EURO was composed of compulsory national social insurance contributions, but 0.07 million EUR – personal income tax. 

The total tax payers paid after 2021 shall be transferred by the largest taxpayers to the general budget of the State:

1. RSEZ SIA “VEREMS”: 2.75 million EUR;
2. SIA “ALAAS”: 1,26 million EUR;
3. RSEZ SIA “LEAX Rēzekne”: 0.82 million EUR;
4. AS “Stružānu peat factory”: 0.56 million EUR;
5. AS “animal testing station Latgale”: 0.44 million EUR.

* data on the Rezekne District companies calculated on 30.05.2022.

* * averages calculated using median median.

* * * source of information for tax on taxes paid by companies and number of employees – State Revenue Service.