Australian funeral homes fare much differently than U.S. counterparts

The COVID-19 pandemic during the year 2020 and how countries geographic location and national responses to the situation could not be more different than you see in recent publicly owned funeral home companies’ annual reports.

We’ve reported on the results of the United States Service Corporation International (SCI) and Carriage Services both in the last week.  At the end of last week we received early data and results from the two largest public funeral home operators in Australia and New Zealand, InvoCare and Propel Funeral Partners.

Rough estimates, according to the latest data available on the Center for Disease Control web-site indicate that the United States suffered 344,786 deaths due to COVID-19 during the calendar year 2020.  Using the number of deaths in the United States during the non-COVID year of 2019 (2,854,838) as a baseline, that would indicate that deaths increased by more than 12% in the country because of the pandemic.

In Australia, using a death total of 2018 deaths (the latest year we could find statistics on) would set a non-COVID year baseline of deaths at 158,493.  According to the Australian Institute of Health and Welfare, the country suffered 919 COVID-19 deaths during the 2020 calendar year.  That is an increase of 0.5% (that’s right 1/2 of one percent) in 2020 over the non-COVID baseline we used.

In essence, Australia had no where near the percentage increase in deaths due to COVID than did the United States.  To be fair, the island continent has no where near the number of visitors than the United States, and as an island nation, it was probably easier to contain the virus.

What Australia did have, much like the United States to contain the virus, was lockdowns and rules on social behavior.  And, those rules included rules on the types of funerals that could be conducted and the number of people that were allowed to attend.

Much like the United States, Australian families then opted for death care services with no ceremony and, it appears, opted for direct cremation on a wider scale.  The end result to the funeral home operators was less revenue per case.

Unlike the United States, where SCI and Carriage Services recorded record revenue years in 2020 because of the increased number of deaths, Australian providers struggled through their financial year because there was no death surge, but there was an apparent decline in revenues per case.

This article from the Financial Times explains the struggle of Australia’s largest operator, InvoCare.  According to the article, revenue was down 4.5% to $AUS 478 million (US$ 368 million)  and a loss of $AUS 9.2 million (US$ 7.09 million) was recorded for calendar year 2020.

In what may be a canary in a coal mine for InvoCare, according to the article, their funeral call volume was also down 2.5%.

InvoCare did report, according to the article, that their pet death care business, Patch and Purr, recorded over $AUS 500,000 in positive EBITDA for the year.

In a half-year report from Propel Funeral Partners, known to be the second largest public death care operator in Australia and New Zealand. covering the last half of 2020, the company did report revenue up 3.5% and profits up 7.6%.

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