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Wednesday 19.09.2018 | Name days: Verners, Muntis

Lursoft: catering sector in Latvia – how much industry leaders earn and pay in taxes

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUUsing a study and compiling data on companies’ business activities for the past three years, Lursoft wanted to find out if it is true catering companies in Latvia work with losses, and what their tax contribution is.

There are 5,297 companies registered in Latvia’s catering services sector. 65.37% of them work in restaurant and mobile catering service field, 17.41% provide food delivery services, and 17.22% are associated with bar business. Of all the interviewed businesses that have said their activities are associated with catering services, 12.54% have attracted foreign capital, according to information from Lursoft database.

«It should be said 55.38% of all companies are registered in Riga. Another 18.41% are registered in Pierīga. 3.81% of all catering companies in Latvia are registered in Kurmala, 3.00% – in Liepaja, 2.28% in Jelgava, and 2.23% – in Daugavpils,» according to Lursoft communications manager Indra Urtāne.

Company’s representatives say that 8.38% of companies working in the catering sector were registered last year. The most successful newcomer is SIA T73, which owns two eateries, a restaurant, a café and even a bar. In 2017, SIA T73 turnover was EUR 1.02 million. The year was concluded by the company with losses worth EUR 70.19 thousand. Company’s shares are owned through SIA International SV by one Viktors Ravdive.

Lido, McDonald’s and Daily had largest turnovers

As for turnover, the largest turnover of 2016 was demonstrated by AS Lido – EUR 36.46 million. When the survey was being prepared, the company’s financial account for 2017 was not yet ready. Because of that, it is unknown if Lido managed to maintain its leader position. Nevertheless, Lido continued successfully developing an increasing its turnover in the past six years, says Lursoft communications manager.

She says competitors did not remain idle this whole time. For example, turnover of SIA Premier Restaurants Latvia grew to reach EUR 36.12 million in 2017. This company’s turnover has increased by 13.43% in one year’s time. The TOP 3 largest catering companies list also includes SIA Baltic Restaurants Latvia, which is well known with its Daily lunch restaurants. The company’s turnover reached EUR 15.20 million in 2017 (+11.87% compared with 2016). Last year, SIA Baltic Restaurants Latvia commenced work in ten new catering locations. Three of its catering companies were closed. As a result, SIA Baltic Restaurants Latvia concluded 2017 with 89 catering locations. 35 of them are located in schools, and 28 of them are staff lunch restaurants, Urtāne says.

Data from Lursoft shows that Latvian catering industry’s total turnover had increased by 9.66% in 2016 – EUR 523.69 million. Four of Latvia’s largest catering companies have yet to submit annual accounts (AS Lido, SIA Lage Ko, SIA Airo Catering Services Latvija and SIA Čilija pizza). Nevertheless, according to available data, turnover of the country’s catering industry reached EUR 478.47 million in 2017.

Among industry’s largest winners – prison catering and fast snacks restaurant

SIA Premier Restaurant Latvia has been the most successful catering business in Latvia for the last several years. In 2017, the company’s profits after taxes were 42.93% larger than a year prior. The second largest catering company profit-wise in 2016 and 2017 was SIA Aleks UN V, which actively participates and wins in different procurement contests for catering services, says Lursoft representative.

For example, SIA Aleks UN V together with SIA Māras lācis won in a procumrent project for the provision of catering services in Riga Central Prison, Olaine Prison and Liepaja Prison last year. This year, on the other hand, they won in a procurement project for Pauls Stradins Clinical University Hospital (contract price – EUR 5.90 million).

According to current data, SIA Lido Domina had the third largest revenue in 2017. Data from Lursoft shows that it has two more companies under its wing – a restaurant in Origo shopping centre and one in Domina Shopping Centre. The company’s revenue has grown 2.6 times over the course of one year, reaching EUR 614.71 thousand.

Industry’s paid tax volume up 22.51% since 2015

«Looking at the changes in catering sector’s paid tax volume, we can see that the amount companies have paid to the state budget has increased 22.51% over the course of the past three years, reaching EUR 109.03 million, whereas the PIT amount has grown 28.92% and insurance fees – by 22.01%. The number of employees has increased by only 5.31% in 2017 when compared to 2016. AS Lido was the industry’s largest employer in 2017,» according to Lursoft communication manager.

Last year, the company paid to the state budget EUR 9.50 million in taxes, which is 53.55% more than the amount paid by SIA Premier Restaurant Latvia. Although the tax amount paid by AS Lido has increased by 2.17%, the largest tax payment for the company was made in 2015, when SRS was paid EUR 9.81 million. «It should be added that AS Lido had the largest PIT and insurance payments in the industry in the last several years. Since 2015, the company’s paid PIT volume has increased 9.69%, reaching EUR 2.16 million. Insurance payments have grown by 10.15%, reaching EUR 4.04 million since 2015,» says Urtāne.

Tax debtors

Lursoft communication manager says that after compiling information from SRS, it can be seen that 39.31% of the industry’s companies had tax debts at the beginning of July, with the total size of tax debts reaching EUR 25.81 million.

Tax debts larger than EUR 100,000 were registered for 39 catering companies at the beginning of July.

«The largest tax debtor among catering services was SIA GoldTop, which was founded three years ago. This company has not submitted a single financial account. In May 2017, SRS decided to halt this company’s economic activities. At the beginning of June, SRS decided to cease this company’s economic activities entirely. Its tax debt reached EUR 652.10 thousand at the beginning of July,» says Urtāne.

The second largest tax debtor among catering companies is SIA Čilija Pizza, whose tax debt was EUR 451.07 thousand at the beginning of July.

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