The business of funeral companies could cross, this year, the border of half a billion lei, an unprecedented level in Romania. The COVID pandemic caused investments in this sector to increase significantly, and the number of companies to explode, shows a Frames analysis, based on a study conducted for a company.
The turnover of funeral companies (CAEN code 9603) has increased dramatically in the last decade, from 62.8 million lei in 2010 to 330.3 million lei in 2020.
This year, the profile business will exceed 500 million lei, amid the increase in the number of deceased persons and as a result of the significant increase in the price of funeral services. According to financial data, provided by companies to the Ministry of Finance, the profit of the funeral business increased by more than a third in the pandemic, from 54.7 million lei in 2019 to 86.8 million lei in 2020. In 2021, the Frames analysis estimates a profit of 100 million lei, over 30 times higher than 10 years ago.
Pandemic, a heavenly manna
For funeral homes, the pandemic has brought a significant increase in activity. The large number of deaths reported in 2020 and especially in 2021, nationwide, led companies to invest significantly in expanding services, and the number of employees increased to over 2360 in 2020, compared to 2326 in 2019 and only 1032 in 2010. “We are talking about a business that has expanded significantly in recent years and has come to cover the full spectrum of funeral services. The embalming, the coffin, the mortuary, the place of eternity are the main landmarks. There are real economic chains that efficiently exploit the entire operational process. When someone dies at the hospital or at home, the representative of a company that offers its services certainly appears. There are also credit systems, with payment in interest-free installments, etc. “, shows the Frames analysis.
“Funeral services are one of the” promising “businesses in the economy, given that there will never be a shortage of customers,” says Adrian Negrescu, Frames manager. Romania registered, in 2020, a record number of deaths, of 297,345, registering the highest annual increase, of 13.4% (no. Deaths / 1000 inhabitants), of the number of deceased persons since 1990. In previous years (from 1990 to 2019) this demographic indicator varied between 1 and 3% from year to year.
Out of the total number of those dedicated in 2020, 158,506 were men and 138,839 women.
Most deaths, according to INS data, were caused by diseases of the circulatory system (162,780), followed by tumors (49769), diseases of the respiratory system (including COVID) – 38578 and diseases of the digestive system (15318).
Most of the deceased were over 85 years old (73357) and 80-84 years old (52250). From a regional point of view, most deaths were reported last year in Bucharest (25,777), Prahova (12,490), Dolj (10141), Iasi (9987), Bacau (9838), Constanta (9589) and Suceava ( 9473).
COVID wreaks havoc
Last month, Romania ranked first in the world in the number of daily deaths from Covid, if we refer to the country’s population.
According to data presented by Oxford University on the Our World in Data website, Romania reached 16.6 deaths per million inhabitants (on average in the last 7 days calculated on October 14). On November 15, Romania was ranked 9th in the world, in terms of deaths of COVID in 1 million people. In front of us are Peru, Bulgaria, Bosnia and Herzegovina, Montenegro, Hungary, the Czech Republic and Brazil.
Since the beginning of the pandemic, over 53,000 people have died of COVID in Romania, in 1.7 million confirmed cases of coronavirus infection.
A potential correctly identified by investors, proof that the number of companies in the field of funerals has increased significantly, reaching 1,125 in 2020, compared to only 378 in 2010 and 1,052 in 2019.
According to the data of the analysis, carried out at the request of a profile company, most funeral companies operate in Bucharest-Ilfov, Iasi, Cluj-Napoca, Timisoara, Constanta and Brasov. ,, The presence of funeral companies in the area of large urban agglomerations must be linked to the demand for such services. If in the rural area, funerals, alms and all other services of this nature are organized more on their own, in the urban area the companies are the ones that provide, mainly, these services ”, they explain.
The significant evolution of the turnover is explained, on the other hand, by the taxation of some services that, until recently, were practiced without legal forms. ,, The level of tax evasion in the funeral services market has decreased significantly in recent years, and the financial results confirm this perspective. This does not mean that there are not many services that are provided illegally, without invoices and receipts, but the phenomenon has been significantly reduced “, shows the Frames analysis.
The latest statistics show that, out of a total of 1025 companies, 1107 are from the area of micro-enterprises. In Romania there are only 2 large companies and 16 small ones, a sign that the development potential is very high. ,, Investments in the field, especially in the franchise area, can bring a significant earning potential to those who dare to enter this business area. With a well-developed national development plan and coordinated services, a significant business can be developed in this sector, ” Frames analysts say. “Unfortunately, the outlook for mortality in Romania is negative. The number of deaths increases from year to year against the background of the accentuated aging of the population, of the increase of the number of patients and, last but not least, of the harmful habits of the Romanians ”, say the experts.
Unhealthy diet, lack of exercise, excessive alcohol consumption, large-scale self-medication and lack of interest of a large part of the population for preventive medical check-ups contribute to this phenomenon.
The data processed in the Frames analysis refer exclusively to companies that have the main activity code 9603 and are obtained from the Trade Register and the Ministry of Finance based on public information declared by companies and Frames estimates.
Source: Cotidianul RO by www.cotidianul.ro.
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