[News Space=Reporter seungwon lee] Funeral home business specialist Boram funeral company Development (CEO Oh Jun-oh, Lee Chang-woo) reported that its sales increased last year, but its operating profit decreased by approximately 36% compared to the previous year. 

As of the end of 2024, the debt ratio has also improved significantly compared to the previous year (2063%), reaching 666%, but it is still at a dangerous level. In addition, there are structural challenges such as a decrease in operating profit and net profit, a decrease in cash assets, and accumulated deficits.

In particular, as many as 11 lawsuits are ongoing last year, with a total lawsuit amount of 9 billion won. In addition, some of the ordinary deposits held in relation to the lawsuits have been seized.

Boram funeral company Development's sales in 2024 were recorded at KRW 120.9 billion, a 19.5% increase from the previous year (KRW 101.1 billion).

Operating profit was 8.15 billion won, down 36.2% from the previous year (12.8 billion won). Net income also decreased 11.4% from the previous year (18.1 billion won) to 16.06 billion won. Operating profit margin was 6.7%, down 5.9%p from the previous year (12.6%).

In 2024, selling and administrative expenses increased by 27.6% to KRW 112,777,900,000 from the previous year (KRW 88,389,120,000). Of this, advertising and publicity expenses decreased by 42.1% to KRW 1,398,000,000 from KRW 2,410,550,000 the previous year. 

Salaries increased by 23.7% to KRW 25.63687 billion from KRW 20.7208 billion the previous year. Commissions paid increased by 17.1% to KRW 16.86256 billion (KRW 14.474 billion the previous year). In addition, major cost items such as rent, welfare expenses, and depreciation expenses increased across the board.

Compared to the previous year, both the debt ratio and current ratio have improved the financial structure, but it still carries risks.

As of the end of 2024, the debt ratio was 666%, a significant improvement from the previous year (2,063%). The current ratio was 291.7%, with current assets reaching 109.2 billion won and current liabilities increasing by more than three times from 11.3 billion won to 37.4 billion won in the previous year. Short-term borrowings, which were 0 won in the previous year, also increased by 9 billion won.

Cash assets decreased by 35.5% from 39.25538 billion won the previous year to 25.33729 billion won. Intangible assets amounted to 41.41195 billion won.

As a special note, the land and buildings owned by Boram funeral company were revalued as of December 31, 2024, and the tangible asset revaluation gain of KRW 32,891,950,000 was reflected in the accumulated other comprehensive income.

In addition, 228.69373 billion won, equivalent to 50% of the 457.38745 billion won in premium deposits (mutual aid member advance payments), is being secured through a mutual aid contract with the Korea Mutual Aid Association.

As of the 2024 financial statements, no dividends were paid. The retained earnings (deficit) were -29.418 billion won (-45.468 billion won in the previous year), as the accumulated deficit continued despite the generation of net income for the period.

Financial transactions with special related parties included a loan of 3.3 billion won to Boram funeral company Life Insurance Co., Ltd. and a loan of 4.631 billion won from Boram Yeoksam Development Co., Ltd.The salaries and retirement benefits paid to key executives (directors, etc.) were not disclosed as separate items, but were included in the total salary (25.6 billion won) and retirement benefits (1.7 billion won).

There are as many as 11 legal disputes and lawsuits pending.

As of the end of 2024, Boram funeral company has 5 lawsuits pending as a plaintiff (with a lawsuit amount of 3.09 billion won) and 6 lawsuits pending as a defendant (with a lawsuit amount of 5.889 billion won). 

A lawsuit reserve of 1.315 billion won was established in relation to the defendant's lawsuit.

In particular, some of the ordinary deposits held in connection with the pending lawsuit have been seized. 50 million won of ordinary deposits deposited in Kookmin Bank have been seized according to the court's decision. This seizure is directly related to the lawsuit in which the company is a defendant, and the creditor (plaintiff) applied for the seizure to the court for the purpose of preserving the claim in preparation for the outcome of the lawsuit.

A corporate finance analysis expert pointed out that, “Due to the nature of the mutual aid business, the size of premium deposits (advance payments) is large, and there is always an obligation to pay surrender refunds,” and “in particular, a decrease in cash assets, an increase in short-term borrowings, and an expansion of current liabilities could become internal risks that will act as a burden on short-term liquidity management.”

He continued, “Although total capital increased to 75.8 billion won due to the revaluation of tangible assets, resolving accumulated deficits and improving profitability remain as tasks,” and emphasized, “Intensifying market competition across the mutual aid industry, strengthening consumer protection regulations, and risks related to real estate development projects are also variables that must be watched.”

Meanwhile, Boram funeral company Development was established in 1992 and its main business is wedding and funeral arrangements and funeral services. Its capital is 1.5 billion won. The largest shareholder is Choi Cheol-hong and other special related parties own 100% of the shares.

Its subsidiaries include Boram funeral company Siloam Co., Ltd., Boram Mutual Aid Leaders Co., Ltd., Boram funeral company Guarantee Co., Ltd., Boram Carnegie Co., Ltd., Bysolo Co., Ltd.,Boram Convention Co., Ltd., Boram Bio Co., Ltd., and Yudam Co., Ltd.

Other special related parties include Boram funeral company Life Co., Ltd., Boram funeral company Anycall Co., Ltd., BRL City Co., Ltd., Boram Information Industry Co., Ltd., Boguk Industry Co., Ltd., Bia Life Science Co., Ltd., Daon 21 Co., Ltd., Union Network Korea Co., Ltd., Gukbin Flower Co., Ltd., Boram funeral company Plus Co., Ltd., Boram Construction Co., Ltd., and Boram Yeoksam Development Co., Ltd.