The covid raises the 'zombie' companies on the islands by 35%

Zombie companies increase due to falling revenues. / arcadio suarez

The pandemic takes its toll and raises companies unable to cover their financial expenses with their results

Silvia Fernandez

The covid crisis and the drop in income in the last two years have taken their toll on the productive fabric of the Canary Islands. According to the data handled by the company Informa D&B (a subsidiary company of Cesce), specialized in commercial and financial information,
on the islands there are currently 1,801 'zombie' companies', which are those that are not able to cover their financial expenses with their results. They are still active but are deficient.

These societies increase more in the islands than at the national level

A year ago and according to Informa data, there were 1,334 companies in this situation on the islands. In one year there has been an increase of 35%.

To carry out the study, Informa has considered commercial companies but excluding holding companies and those belonging to the financial sector, in addition to those less than 10 years old. As there is no single criterion to define what 'zombie' companies are, Informa has used the criteria of the OECD and the Bank of Spain.

Nationwide, there are an estimated 47,210 'zombie' companies'. The increase with respect to last year in the State as a whole is 19%, half the increase of 35% experienced in the islands. A year ago at the national level there were 47,210 companies.

According to Informa, it is the companies in the
construction and real estate activities, trade and business services those that accumulate a greater number of zombie companies, with 30%, 19% and 14% of the total, respectively.

Education and health companies, the least affected

In contrast, the companies with the least number of companies in this situation are the administration (0.02%); extractive industries (0.33%); education (1.5%) and health (1.68%). In hospitality we find 7% of zombie companies, a percentage that drops to 5% in the food and beverage services branch.

Regarding the size of zombie companies,
it is the micro ones that monopolize 90% of societies in this situation. Both large and medium-sized companies do not represent 2% of the total and those of small size are barely 7%.

By communities,
The Canary Islands accounts for almost 4% of the total (a year ago they were 3.3%). However, it is Madrid that is in first place, with almost 20% of the zombie companies in Spain, with a total of 9,181. Next comes Catalonia, with 8,511, 18%, and Andalusia, with 5,082.

There are 40,000 companies registered in the Registry but without activity

Zombie companies must be added to those companies that lack activity despite being registered in the Mercantile Registry. According to data from Informa D&B, there are around 40,000 companies on the islands that do not publish their annual accounts and are therefore inactive. This type of company has been reduced in the last year, probably because they have had the past of being removed from the Registry. A year ago there were 45,710 companies in this situation on the islands. At the national level, 1.3 million inactive companies were registered this year compared to 1.4 a year ago. Almost half of these companies, 48%, were established before 1995, and around 60,000 were created after 2015.

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